Industrial Relations in Europe and European works council Catherine Voynnet Fourboul Sources : UK: Howard Gospel King’s College D: Walther Müller Jentsch prof. Émerite Jackie Morin european commission http://ec.europa.eu/socialdialogue

Reference 

Bamber G.J., Lansbury R.D., International and Comparative Industrial Relations, Relations Sage 1998



Devin G., syndicalisme : dimensions internationales, internationales éditions européennes ERASME, 1990



Dufour C., Syndicalismes, dynamique des relations professionnelles, IRES, Dunod, 1992



Dunlop J.T., Industrial Relations Systems,, NY : Holt, 1958



Ferner A., Hyman R., Changing Industrial Relations in Europe, Europe Basil Blackwell, 1998



Harzing AW, Van Ruysseveldt J., International Human Ressource Management, Sage, 1995



Heenan D.A., Perlmutter H.W., Multinational Organization Development, Development Addison Weysley Publishing, 1979



Sparrow P., Hiltrop J.M., European Human Ressource Management in Transition, Prentice Hall, 1994



Young S., Hamill J., Europe and the multinationals, multinationals Edward Elgar, 1992



http://www.fr.eurofound.eu.int/emire/emire.html 2

Industrial relations in Europe (Part-1): 1): A comparison 1. Definition 2. Collective Bargaining 3. Divergence convergence crosssvergence ? 4. Some national IR systems 5. Compared IR systems

3

1. IR definition

A definition of Industrial relations

« The study of strategic choice and collective action of labour, business and governments, their mutual relationships of conflict, cooperation and power, affecting the content and regulation of employment relations and the use and distribution of physical and human resources »

Joris Van Ruysseveldt et Jelle Visser, Visser Industrial Relations in Europe, Sage 1996

Social Relations and Industrial Relations State

Directors

Management

Representatives

Labour

Origins of Industrial Relations Adam Smith  division of labour, fixing of wages, role which institutions might legitimately play in the labour market.

Marx  stages of production,  the distinction between labour and labour power,  the alienation of labour and inevitability of conflict.

neoclassical economists,  notion of marginalism in wage fixing  negative view of interventions in the workings of the labour market.

Webbs in the UK  The History of Trade Unions (1894)

Commons in the US  Industrial Democracy (1897),  Legal Foundations of Capitalism (1924)  Institutional "Economics (1934).

HR IR evolution HRM brings management more to centre stage

HR HR IR IR Institutional Labour Economics became predominant

1945 - 1960 The "golden age" of American Industrial Relations

I R

The rise of Human Resource Management (HRM) and Organisational Behaviour (OB)

1960 -2005 The decline of IR in US the rise of IR in the UK

H R

Bruce E. Kaufman 2001

IR HR Commonalities Common focus on the world of work

Attention to employer, workers and community

Basic psychological processes A tension exists in satisfying the human goals and the economic/organizational goals of effectiveness Multidisciplinary fields of practice Normative "blind spots" in research agendas and problem-solving recommendations

Bruce E. Kaufman 2001

IR HR Differences IR

HR

The employee side

Focus of research

The employers' solution

External The interests of employees should be protected seeks to optimize a weighted average of effective organizational performance and employee wellbeing To be controlled through collective bargaining and government legislation workplace conflict is inevitable – government and unions have an important role to play in dispute resolution

Perspective

Internal Achievement of maximum organizational effectiveness/efficiency

collective bargaining and government regulation

End goal

Power of management conflict

Key players

Meeting employee interests and human values is accomplished indirectly through good management HR needs to mediate conflict "business partner" to strategically align employee behaviors with the organization's business goals 1st: management. unions and government: secondary players

A new definition of IR Processes of control over work relations and regulations of interests Web of institutionalised relationships between actors, organisations and institutions Collective relations Different actors (employees and rep. / employers and rep.), arenas and levels of industrial relations Legal and institutional framework and public policies Cooperative and conflictual relationships Diversity between existing national models New supranational industrial relations

2. Collective bargaining and social dialogue

Collective Bargaining  after 1945: became the regulation tool of employment relations  is a joint decision-making process based on conflictual cooperation  may concern minimum hourly wages, min. or max working hours  procedural rules concern additional bargaining, rules for interpreting the agreement

 Diminution of the traditional role played by employers( associaitons in favour of a more restricted advisory role  Tendency to decentralize collective bargaining (preference for company or plant level bargaining) ; because : Growing number and infuence of MNC Increased international competition and requirement for flexibility 13

Collective Bargaining in different countries Collective agreements, within the legal systems of the European countries, differ considerably.

In Nordic countries, UK and Italy Individual contracts Dk UK : collective bargaining has no statutory definition

Germany

Is a mix of both extrema

France, Spain Belgium, Law and collective bargaining are connected

Collective bargaining coverage Source: EIRO http://www.eurofound.europa.eu/eiro/2002/12/study/tn0212102s.html

2001

2001

Hungary

34

Denmark

83

Great Britain

36

Portugal

87

Slovakia

48

Netherlands

88

Luxembourg

58

Sweden

90

Germany

67

Belgium

91

Norway

74

France

93

Spain

81

Austria

98

Bargaining Coverage More 80%

Around 60% Less 40% Less 25%

European Commission

Tripartite Social Summit

Macroeconomic dialogue Dialogue on education Dialogue on employment

Autonomous

BIPARTITE

TRIPARTITE

What forms does the European Social Dialogue take?

“Val Duchesse” Social Dialogue

Cross industry

High level groups

Sectoral social dialogue committees

Sectoral

EWC ? Transnational agreements

Company European Commission

1 Cross industry social dialogue committee

34 (+ 3) Sectoral social dialogue committees

Extractive Ind. Sea fishing Agriculture

Automobile (*) Non ferrous metal (*) Gas Steel Chemical Woodworking Textile/clothing Tanning/leather Sugar Shipbuilding Furniture Footwear Electricity Construction

Catering (*) Hospitals Life performance Insurance Inland Navigation Industrial cleaning Horeca Commerce Civil aviation Banking Audiovisual Temporary agency work Telecom Sea transport Road transport Railways Private security Postal services Personal services Local / Reg. governement

ILO Convention

Sea Fishing Inland navigation

Maritime transport

TRANSPORT

Rail transport

Air crew

Ground handling

Civil aviation

Just culture

Road transport Public Urban Tr

Air traffic management

Logistic

Restructur. Image

Metal

Qualifications

Shipyards

METAL…

Automobile

Non-Ferrous metal

Steel

Training

Health & safety

Social dialogue texts Agreements establishing standards Article 139.2 of the Treaty

Framework agreements

Implementation Autonomous agreements

Frameworks of action Recommendations concerning standards and principles

Guidelines and Codes of conduct

Follow-up at National level

Policy orientations

Joint opinions Exchange of information

Declarations

Information Diffusion

Tools

European Commission

6 Agreements establishing minimum standards implemented by Council decision

• • • • •

•

Framework agreement on parental leave, 1995 Framework agreement on parttime work, 1997 European agreement on the organisation of working time of seafarers, 1998 Framework agreement on fixedterm work, 1999 European agreement on the organisation of working time of mobile workers in civil aviation, 2000 Agreement on certain aspects of the working conditions of mobile workers assigned to interoperable cross-border services, 2005 European Commission

Sectoral social dialogue: action  Joint texts (opinions, declarations, codes of conduct etc) on a range of issues training, employment, fundamental rights health and safety

 Not real bargaining role over pay and conditions, Except the conclusion of an agreement on the organisation of working time in March 2000 in civil aviation

Social Policy

Legislation

Mobility Gender equality Working conditions Health and Safety

European Social Dialogue

Social Agenda

European Social Funds

Open Method of Coordination

Employment Social protection

European Commission

3. Divergence convergence crossvergence ?

Convergence

More similar in terms of macro-level variables - structure and technology-

Divergence More dissimilar in terms of micro-variables - attitude, behaviour

Crossvergence Processes of acculturation, a blending of 2 cultures may result in cross bred forms of value that are in-between between the two parent cultures.

From national specific systems to crossnational influence

UK

D Country of origin effect and fragmentation

F

SP

Crossvergence:: a dynamic combination Micro

Meso

Macro

EWC

Convergence

The process of crossvergence

Corporate culture

European regulation, social Europe

Impact on I.R. ?

Divergence

Interaction

National Industrial Relations Context

Degree of internationalization 

Depth Foreign sales/ total sales,

James J Kennelly, Eric E Lewis. Degree of internationalization and corporate environmental performance: Is there a link? International Journal of Management. Poole: Sep 2002. Vol. 19, Iss. 3; pg. 478, 12 pgs

Concentration of employees at headquarters country

dispersion of employees around headquarters country

BRITISH AIRWAYS

LVMH

ERICSSON

HENKEL

86%

56%

49%

36%

ABB UNILEVER

6%

2%

Foreign assets/total assets,



Scope number of functional activities pursued abroad: sales, production, R&D Overseas subsidiaries/total subsidiaries



Dispersion number of foreign countries with research labs, manufacturing facilities, sales offices & sales subsidiaries, respectively). psychic dispersion of international operations (dispersion of subsidiaries around the 10 psychic cultural zones as identified in Ronen & Shenkar (1985), who clustered countries into 10 cultural zones based on Hofstede and others



Top management's international experience (as a percentage of total top management experience). 29

MNCs environment and fit theory

[GHOSHAL & NOHRIA 1993] [BARTLETT & GHOSHAL 1998]

High Cameras

Telecommunications Computers

Global strategy/ environment Global integration

Electronics

Metals

Aircraft

Transnational strategy/environment Aerospace DrugsDrugs pharmaceuticals

Beverages Machinery

International strategy/environment Paper Textiles

Clothing

Multinational strategy/environment

Food

Tobacco

Low Local responsiveness

30

The IHR manager role 







Explicitly recognize how homecountry ways of managing human resources are a function of cultural values and assumptions Recognize that these ways are neither better nor worse than others around the world More creative and effective ways of managing human resources can be learned from other cultures Comparative awareness, comparison of the various systems

Push from headquarters to conform to a global culture

LOYALTY

What needs to be done differently in the context of requirements for integration ?

SENSITIVITY

Push at the local or subsidiary level to preserve uniqueness. 31

HQ Subsidiary attitudes  Perlmutter (1979): proposed certain orientations which help to develop a company and the establishment of its international subsidiaries

 Four different dispositions: Ethnocentric: values & interests of parent company guide strategic decisions Polycentric: strategic decisions are tailored to suit cultures of subsidiaries Regiocentric: company blends its own interests with those of regional subsidiaries Geocentric: integration of global approach to include a little bit of everything

Graphical Overview of Approaches

Source: C. Voynnet Fourboul & F. Bournois, Strategic Communication with Employees in Large European Companies: A Typology in European Management Journal, 03-04/ 1999, pp. 204-217

Different actions depending on orientation of company Ethnocentric

Polycentric

Regiocentric

Geocentric

Dominating Culture

Home country

Host country

Regional

Global culture

Strategy

Global integration

National Responsiveness

Regional integration and national responsiveness

Global integration and national responsiveness

Governance

Top down

Bottom up (each subsidiary decides on local objectives)

Mutually negotiated between region and its subsidiaries

Mutually negotiated at all levels of the corperation

Personnel Development

People of home country are developed to occupy key positions anywhere in the world

People of local nationality are developed for key positions in their own country

Regional people are developed for key positions anywhere in the region

Best people around the world are developed for any position around the world

Distribution of profits

Repatriation of profits to home country

Retention of profits in host country

Redistribution within region

Redistribution globally

Attitudes HQ / Subsidiaries

Ethnocentric BRITISH AIRWAYS

Polycentric ERICSON ABB

Heenan Perlmutter 1979

Regiocentric LVMH

Geocentric UNILEVER HENKEL

35

Communication models Technology and face to face

Media oriented Being and doing

BRITISH AIRWAYS

ERICSSON PLURALISTIC

INSTRUMENTAL

HUMANISTIC

ENTREPRENEURIAL LVMH

Cultural tolerance

HENKEL UNILEVER

Managerial line

BRITISH AIRWAYS: in “countries with Union representation” the communication process is quicker.

Employee oriented

36

Communication advices

[BOURNOIS VOYNNET 2000]

Company LVMH Entrepreneurial communication Regiocentric attitude

DO Internal communication is effective if there is a philosophy behind it. It is more efficient if the communication manager reports to the human resources manager Letting people know about the strategies increases their motivation

UNILEVER Humanistic communication Geocentric attitude

1. For the company: Keep checking and informing while realising that the process is dynamic 2. For the business group: Make sure you bring added value to the business Be open and honest with all employees, not only with managers Be flexible Inform employees before the press does Be honest and open

1. For the company: Do not think too centrally or paternalistically 2. For the business group HR Do not withdraw on some vague “island of professional ethics”

BRITISH AIRWAYS Instrumental communication Ethnocentric attitude

Try to use local languages Assess human resources methodologies according to their relevance to local culture

Do not make assumptions Do not use jargon Be careful of humour.

ERICSSON Pluralistic communication Polycentric attitude

Be quick, clear, comprehensible, true, consistent, explain complex problems

ABB Pluralistic communication Regiocentric and polycentric attitude

HENKEL Humanistic communication Geocentric attitude

DON’T

There is hardly anything so negative or secret that it cannot be explained Do not hide bad news, do not communicate successes only Do not use too many channels Practice openness in teamwork No headquarters domination Use every chance to do things in unison No control but trust Promote and encourage initiatives from all parts of the business and Headquarters must not direct the subsidiaries but subsidiaries promote self-direction Headquarters must not interfere in local issues nor use its own example to solve these issues

37

Forms of transnational negotiation at company level become a reality  At company level, growing number of transnational texts concluded, about 110 recorded (70 European)  More than 90 companies (50 European) involved such as: Axa, Ford, GM on restructuring Dexia, Deutsche Bank on employment, training, mobility Club Mediterrannée on subcontracting Vivendi on H&S, GE plastics on data protection Areva on equal opportunities Generali, SKF, SCA on CSR-fundamental rights

European Social Dialogue

4. Some national IR systems

Industrial relations regimes or arrangements North

Centre-west

South

West

Centre-east

Organised corporatism

Social partnership

Polarised/state-centred

Liberal pluralism

Fragmented/state-centrd

Power balance Labour-oriented Principal level of Sector bargaining Bargaining style Integrating Role of TU in public policy

Balanced

Alternating

Employer-oriented

Variable/unstable

Company

Role of the state in IR

‘Shadow of hierarchy” dual system/high coverage Belgium

Industrial relations regime

Conflict oriented

Institutionalised

Limited (mediator) Employee representation

Countries

Union based/high coverage

Denmark Finland Norway Sweden

Germany (Ireland) Luxembourg Netherlands Austria Slovenia (Finland)

Acquiescent

Irregular/politicised

Rare/event-driven

Irregular/politicised

Frequent intervention

Non-intervention

Organiser of transition

dual system/low coverage

Union based/small coverage

Union based/small coverage

Greece Spain France Italy (Hungary) Portugal

Bulgaria Ireland Malta

Czech Republic Estonia Latvia

Cyprus

Lithuania

UK

Hungary Poland Romania Slovakia

Source: J. Visser, extended on the basis of Ebbinghaus and Visser (1997); Crouch 1993; 1996; Esping-Andersen (1990); Schmidt (2002; 2006); and Platzer and Kohl (2007).

HR in perspective across http://www.fedee.com/accession1.shtml Europe 





Austria joined the EU in 1995. It has benefited greatly from being both physically and linguistically close to Germany and it holds a key position on transalpine transport routes. This small, but highly efficient, central European state has a well-developed system of labour relations, a high level of employee involvement and a welfare system that, although generous, nevertheless incorporates a sufficient incentive to remain in work. The Benelux countries (Belgium, Luxembourg and the Netherlands) provide a well-ordered and generally stable environment for enterprises. Belgium's employment laws are still based on a needless division between blue and white-collar workers, and there are complex thresholds determining the operation of certain legal rights. The Dutch welfare system has tended to encourage absenteeism, but it is currently being modified to improve the incentive to work. The best example provided by the Netherlands for accession states is in its highly diverse cultural mix and tolerant attitudes towards minority ethnic groups, which are reinforced in the workplace by highly effective equal opportunity laws. Denmark has driven up its wage levels to be the highest in the world by heavily taxing employees and relying heavily on collective bargaining to regulate pay and employment conditions. However, it has one of the most skilled workforces in Europe and has been a pioneer in flexible working methods. This has helped Denmark to achieve high, sustained productivity levels



Finland joined the EU in 1995. It has few natural resources and a complex language that could easily have become a barrier to international trade. However, it has been able to take full advantage of EU and eurozone membership to achieve a low level of price inflation and invest in its human capital to produce a highly skilled workforce. The Finnish economy has also benefitted by employers being able to tap into a ready supply of labour from the Baltic states.



France has low level of unionisation, but highly militant trade unions. The official stance towards foreign-owned multinational enterprises has often been hostile and there has been a tendency to overreact to corporate restructuring by the application of penal sanctions. The 35-hour week has not been a success and the French government is now trying to unpick itself from many of its past policies.



Germany is the biggest and by far the most successful of the older EU states. During the last two decades it has achieved a difficult transition in its eastern states from a system of state-run monopolies to a modern market economy. Complete integration has not, however, been fully achieved and a 20% wage gap still exists between eastern and western states. Neither has Germany been able to significantly narrow the equal pay gap between male and female employees.

HR in perspective across http://www.fedee.com/accession1.shtml Europe 



Greece joined the EU in 1981. It continues to be a country with many small employers, generally poor labour relations and governments that have frittered away much of the economic gain from EU accession through unproductive public spending and early retirement schemes. Statutory work obligations are commonly flouted, particularly in leading sectors such as construction. Government employment data is generally weak, out of date and unreliable. Greece relies very heavily upon its tourism and agricultural industries and has not been successful at attracting a sustained volume of major inward investment projects. Moreover, it has never fully exploited its physical location close to major external markets in the Middle East. Ireland provides the best example within the EU of a small country overcoming its lack of natural resources and peripheral geographical position to become a true 'tiger economy'. This has largely been achieved through a low rate of corporation tax, a sustained inward investment strategy and an open-door policy towards immigrants from central and eastern Europe. Ireland has not focused on being a low-wage location, but has concentrated on minimising bureaucratic burdens and keeping overheads such as social security costs to a minimum.



Italy has overcome many of its past economic and political instability problems, and its most recent reforms have helped to encourage flexibility and open up the labour market. However, it has still not overcome its major north-south economic divide, reduced the bureaucratic burdens that it continues to place on employers, or resolved the inconsistent application of its complex employment laws.



Portugal joined the EU in 1986. Although it has revised its labour laws and introduced a unified labour code, such reforms were far too little and too late to halt an exodus of foreign-owned companies. Negative work attitudes, absenteeism, a highly unequal distribution of incomes, bureaucratic state machinery and an undue emphasis by the government on low-cost labour have all contributed to a poorly functioning industrial base.



Spain joined the European Union in 1986 and was at first a country burdened by poor labour productivity, tight employment protection laws and wage indexation. Although these problems have not entirely disappeared Spain is now western Europe's second tiger economy, with rapid economic expansion driven by a property boom and a plentiful supply of low cost labour from north Africa.



Sweden joined the EU in 1995. During the 70s and early 80s, Sweden had to undertake a major economic restructuring exercise to deal with a decline in its forestry and iron ore mining sectors. Its highly sophisticated and extensive welfare system helped to make this exercise a success. Since accession, however, the Swedish economy has underperformed. This is primarily due to the high tax burden imposed on ordinary workers to sustain the generous welfare provisions, the creation of a dependency culture, and the narrowness of pay differentials.



The United Kingdom operates a very different corporate and work culture from the European continent. It has virtually abandoned sectoral collective bargaining and has been reluctant to embrace formalised systems of employee participation. It has tended to take a minimalist approach to all EU social and employment Directives and has refused to join the eurozone. Although this has helped to encourage the growth of new enterprises, much of the UK's advantage in attracting inward investment has been gained through its cultural and linguistic links with the USA. Labour costs, however, remain high by EU standards and productivity is well below the level that this degree of economic freedom should have achieved.

The British ‘voluntarist voluntarist’ tradition  Limited state intervention in employee relations – only ‘gap filling’  State concerns at present: training, public sector trade unions  State indifference: private sector trade union  Preference for collective bargaining over state regulation  non-legalistic legalistic collective bargaining  Non-legalistic legalistic collective agreements: limited role for courts  Limited right to strike  Subscribed to by Conservative and Labour governments 19451945

Industrial Relations in Germany TU’s density : 30% Structure : industry TU Ideology: participation, cooperation of powerful and well organized TU Representation system : both at the company level and at the board DGB : 6 M (VERDI : 2.2 M ; IG METALL : 2.3M) BDA : 75 % employers

GERMANY: Socio-economic Socio key dates * GB (first industrial nation): 1780-1830 1780

18351870

First Industrial Revolution*

Free labour markets + Factory system Mechanisation of work Light industry, Railways

18801920

Second Industrial Revolution

Heavy industry (metallurgy and mining) New industries: chemicals, electricity Formation of gigantic corporations (e.g. Krupp) Mass production

1920s1970s

Age of ‘Fordism’

Leading sector: Automobile industry Fordism combined with Taylorism Conveyor belt + flow production

since 1970

Third Industrial Revolution

Microelectronics Leading sectors: IT-industries, IT logistics Global production chains ‘Flexible specialisation’

1945 – today (Federal Republic of Germany – West Germany) 19451949 1949 1949

Allied Forces

Germany divided into 4 zones

Federal Republic (West Germany)

Constitution Act (Grundgesetz) with the right to associate

1951

Co-determination Act for Coal, Iron and Steel Industries (Montanmitbestimmungsgesetz) Works Constitution Act

1952 19691978 1972

Tripartism: ‘Konzertierte Aktion’ Amendment of the Works Constitution Act with considerable improvements Co-determination Act (Mitbestimmungsgesetz)

1976 1990

Collective Agreement Act (Tarifvertragsgesetz)

United Germany

Transfer of IR institutions to East Germany

Trade Unions: Historical Periods of Organizing 1st period since 1848/1860s

Craft Unions organize skilled blue-collar collar worker

2nd period since 1890

Industrial Unions organize all grades of blue-collar blue workers

politically divided unionism

3rd period since 1900

White-collar Unions organize employees and civil servants

politically divided unionism

Nazi Reich 1933-1945

Trade Unions banned

4th period Rebuilding 1949

16 Industrial Unions affiliated with the DGB

unitary unionism

5th period Mergers after unification 1990

Multi-Industry Industry Unions + New Craft Unions

unitary unionism weakened

Work contract / Contract of Employment •

• • • •

constitute an employment relationship between employer and employee which implies the formal consent of employee to accept his/her subordination to the employer’s command as to the place and manner in which the work is to be done bound to • General Law (national & international framework legislation, e.g. Holiday Act, Minimum Wage) • Collective Agreements • Works Agreements

• Recruitment (also transfer, replacement, regrading): – Employer must consult works council and obtain its consent

• Termination – Employer must consult works council and obtain its consent – Protection against dismissal (Kündigungsschutz)

• Consultation of works council in establishments with more than 20 employees • Works council can refuse its consent only in specified cases

Trade Unions • Confederations: – Deutscher Gewerkschaftsbund (DGB) • with 8 affiliated industrial unions • 85 % of all organized employees

– Deutscher Beamtenbund (civil servants)

• Single Craft Unions: – Marburger Bund (doctors) – Cockpit (pilots) – Gewerkschaft der Lokomotivführer (engine drivers)

•

Legal Framework of German IR – Freedom of Association • laid down in the Constitution Law (§ 9,3)

– Right to strike • in general: complementary right to FoA • in detail: judgements by the Federal Labour Court

– Collective Agreement Act • (Tarifvertragsgesetz)

– Works Constitution Act • (Betriebsverfassungsgesetz)

– Co-determination Laws • (Mitbestimmungsgesetze)

DGB: Affiliated trade unions and their members, 2006 and Union density Trade union

Members ‘000s

Share %

IG Metall

2.333

35,4

Vereinigte Dienstleistungsgewerkschaft (ver.di)

2.275

34,5

IG Bergbau, Chemie, Energie

729

11,1

IG Bauen-Agrar-Umwelt

369

5,6

Gew. Erziehung und Wis-senschaft

249

TRANSNET

German Confederation of Trade Unions (DGB)

Other Confederations (White-Collar Union / Civil Servants Union)

All Confederations

000s

%

000s.

%

%

1980

7.883

31,9

1316

5,3

37,2

1985

7.719

29,1

1297

4,9

34,0

1990

7.938

27,8

1308

4,6

32,4

3,8

1991

11.800

33,0

1638

4,5

38,4

249

3,8

1995

9.355

25,5

1583

4.3

29,8

Gew. Nahrung-Genuß-Gaststätten

212

3,2

2000

8,223

21,6

1656

4,4

26,0

Gew. der Polizei (GdP)

171

2,6

2005

6.778

17,7

1275

3,3

21,0

6.586

100,0

DGB-Gesamt

Dual system of interest representation Two actors: • Trade union voluntary organization

•

Works council legal institution in establishments with 5 and more employees

• 1.) trade union & employers’ association or single employer – bargain collective agreements – mostly at regional or national sectoral level; also at enterprise level

• 2.) works council & management (of a single establishment or a multiestablishment company) – negotiate works agreements

Collective Agreements (CA) & Works Agreements (WA) •

Priority of CA over WA – Wages and other conditions of employment (e.g. working hours) which are normally fixed by collective agreements shall not be regulated by works agreements.

•

Relative & absolute peace obligation – Trade unions can strike and employers can lock-out to reach a CA. But during the period of validity the parties to a collective agreement are bounded to peace obligation. – Works councillors are bound to absolute peace obligation. Acts that imperil the peace of the establishment are forbidden. Conflicts are solved by special

Works Council • legal representation of all employees in establishments with 5 and more employees • elected by all employees • information, consultation, codetermination rights in – – –

Coverage % of establishments

in establishments with 5-50 employees

• no right to strike

12 7

51-100

43

45

101-199

65

66

200-500

79

80

501 and more

89

92

11

46

social personal economic matters

Coverage % of employees

All

New Roles of Works Council • Positive features – New bargaining agent: • Concession bargaining at company level (Bündnis für Arbeit)

– Co-manager – Mediator • between different interest groups

Negative features • Blackmailing / threatening – with downsizing, outsourcing, production

• Undercutting collective agreement • Estrangement between WC and trade union

Mc donald Case • • •

• • • •

The German system of co-determination co-determination at board level and at the workplace more difficult in practice. where there are two or more works councils in the same business, employees can establish a 'central' works council at company level, called a Gesamtbetriebsrat (GBR). labour directors on the management board (Vorstand); and worker representatives on supervisory boards (Aufsichtsrat). What follows is a brief analysis of these institutions.' The 1976 Act, allows for equal numbers of employee and shareholder representatives on the supervisory board. Although the 1976 Act has provoked the most opposition from employers, it does not really give the employee side parity, because one of their members must be of managerial status and he/she can usually be relied upon to vote with the shareholder representatives.

• • • • •

•

The 1952/72 Acts allow for co-determination at the workplace through a works council. Theoretically, all businesses with five or more employees are affected by this legislation. All employees of 18 or over can take part in the election of a council, but separately for bluecollar and white-collar workers. The works council cannot call a strike but it can sue management for any alleged breach of contractual or legal rights. The council must meet with management every four weeks and the law grants the councils a broad range of rights to information consultation and determination ( these rights give employees considerable scope for influence over the management of the business, surpassing by far the rights of equivalent bodies in other countries.

McDonald's in Germany Case • •

•

•

•

McDonald's first came to Europe in 1970, In 1995 McDonald's had over 600 stores in Germany with a workforce of just under 40,000, currently it has over 800 stores. during the early 1980s the corporation faced mounting criticism in the German media. The company later distanced itself from this statement, stating that its source had been one over-zealous manager and in no way represented company policy. the corporation had become increasingly concerned about its public image as an employer

•

1986: the executive board was radically changed –

• •

•

• •

No real change in the overall employee relations policy

The typical McDonald's store has between 50 and 100 employees There is no supervisory board, no company-level works council (GBR) no concern-level works council (KBR). In 1982: 2 works councils from 160 stores In1995: 27 from nearly 600 stores How can we account for this? How does a company take advantage of weaknesses in the legislation?

McDonald's in Germany Case

Information which must be provided to the finance committee

1. 2. 3. 4. 5.

Economic and financial situation of the company Production and marketing situation Production and investment programmes Rationalization plans Production techniques and methods, especially the introduction of new work methods

6.

Closure or reduction or output in any establishment or part of establishment 7. Transfer of any establishments or parts of establishments 8. Amalgamation of establishments 9. Changes in organization or objectives 10. Any other circumstances and projects that may materially affect the interests of the employees of the company.

Industrial relations in France

My 12 key messages 1. 2. 3. 4. 5. 6. 7. 8. 9.

French TUs display a high level of diversity (pluralism) Their presence varies considerably in large or small companies A burning representativeness debate takes place TU are organised in a dual structure (local and branch) Ideology is questioned by European influence The Law system is a burden for management France has a record of 97 % Coverage bargaining & 8% membership rate There are many opportunity windows to innovate in the IR The Government stimulates social dialogue •

10.

To settle a true social dialogue takes time and steps

Difficulty for management to communicate strategic information (HR workforce planning system ) Common issue with other European TU: distance & negotiation Prospect for a new ideology of mature stakeholders:

11. 12. • • • • •

common interest for the company vs diverging interest, learning confidentiality, from local focus to wider scope Differenciation between interest and position of employees From legal focus to social dialogue

A. Industrial Relations in Context

TU are fragmented • 5 main organisations

– CGT,CFDT, FO,CFTC, CFE-CGC, CFE – UNSA, groupe des 10 - SUD – And numerous TU in different sectors

• Workers origin (CGT,FO) • social catholicism origin (CFTC,CFDT) • Representing a category (« les cadres »: managers) (CFE-CGC) (CFE

Genealogy of TU 1895

CGT

CFTC

1919 1921

CGT

1936

CGTU CGT Premiers regroupements de cadres au niveau confédéral

1937 1939

Exclusion des Communistes

1943

CGT

CGT CGC

1944 1947

CGT

FEN

1964

CGT-FO CFDT

1969 1980 1988

CFTC CGC

UNSA

SUD

UCT CGC

TU density in France

DARES – report HADAS LEBEL 11/5/2006

DARES 2004 TU density: 8% 5% in private sector

Negotiation

délégué syndical Trade Union delegate

Trade Unions

Election

Workforce

Election

Président du comité d’entreprise Head of the works council

(syndical)) représentant au comité d’entreprise TU member of work council

(non syndical) syndical représentant au comité d’entreprise Non TU member of works council Délégués du personnels Workforce delegates

IRP: Institutions Représentatives du Personnel - Comité d’entreprise

Coverage rate of “DS” trade union delegate 1999

Illustration of TU organisation : CFDT

Conflicts

Different managerial types The functionalist

The cooperative

The opponent

The legalist

Some French specificities • The part played at the company level in the industrial relations system is low

– The level of the company is not the relevant level of regulation

• Cultural and ideological attitudes

– class struggle – TU value independance from State – Company is considered from an external perspective

The State plays the strongest role, but for how long? • Regulation by the State (on workers political association influence) concerns: – macro-economics economics : wage setting, illness insurance « sécurité sociale » pension – expression rights, duty to negotiate, training: integrated in the law – Imposition of structural reforms (redundancy compensation, nationalisation, privatisation)

• Decentralisation, rights given to companies to derogation (work hours)

B. Key elements of Labour law (individual relations) Work Contract : from recruitment to termination

From recruitment • Work contract is connected directly to law application • 2 status: “salarial” and “non salarial” (independent workers) (but the border is in fact no so obvious) • Apprenticeship Contract between the ages of 16 and 25 (under work law) • Employment policy : lots of types of contracts • Trainees (excluded from work law)

Flexibility: Different contracts • Fixed term contract

– used in companies (6.2 % in March 2006) as a trial period (delayed recruitment)

• Part time contract

– 15% of workers, female most, less qualified – In progression: young people and seniors – Work « on call » is not permitted (necessary provision)

• External employment contract

– coactivity is still not taken into consideration by the law

Concluding a work contract

• Free choice for the employer,

• Information concerning the employee is limited to the skill for the job (are excluded: health, religion, TU or political belonging, pregnancy,) • Law against discrimination (ethnic background, sex, family situation) ; anonymous CV, • Recruitment process: transparency of methods (use of psychological testing)

• CNIL: right to access to information • Registration to social security office URSSAF (against clandestine employment)

Termination : INDEMNITÉ DE LICENCIEMENT COMPENSATION FOR DISMISSAL • Regulated by law and collective agreement and, sometimes, the individual contract of employment. • Legal compensation:

– payable after two years of continuous service – 1/10 month per each year of work – Doubled in case of « dismissal for economic reasons » (law 17/1/2002)

• Conventional compensation

3 modes to control layoffs Administrative control From 1974 to 1986

Employer power

Law and regulation control From 1986…?

Social dialogue control 2008 : bargaining empowerment?

C. Social Dialogue

Evolution of the stakeholders practices • Employer associations:

– Recognition of the TU principle in the company– company Auroux Law 1982 – But difficulty to accept the dialogue, the beneficial confrontation or the equality of relation – There is the idea that workplace should be neutral

Consultation • French law interpretation about consultation is limited: to express an opinion, opinion – Satisfy managers who don’t want to look for a compromise, – Dissenting TU don’t want to be involved in the employer choice

• European law about consultation is more demanding: a negotiated process

– Includes « the aim of reaching an agreement on decisions ». Discussion, debate, compromise about employment issues.

COMITÉ D'ENTREPRISE WORKS COUNCIL • Institution of employee representation, compulsory since 1945 • With a legal personality • Composed of :

– employee members elected – the head of the enterprise (who chairs) – representatives appointed by the trade unions

• Scope :

– welfare and cultural facilities ; – consultative powers – no formal bargaining power.

D. Restructuring

Forms of Corporate restructuring • openings and closures of locations; • increases or reductions of operations at locations; • transfers of production/service provision from one location to another within the same company (in the same country or another);

• transfers of production/service provision outside a company to an external party (‘outsourcing’); • mergers; • takeovers; • joint ventures; • divestments; • bankruptcies.

IR in the face of restructuring • Employment: ambiguity for TU representatives (employee and termination advantages) • Secret clauses. Due to prior information from Chairmen • Assumptions: TU in France feels not legitimate in management, only social is his deserved territory • Possible merger of these 2 philosophies is difficult for them

Managing multiple layers of information and consultation • A complexity for management and worker representatives – organising meaningful information and/or consultation – without creating undue delays and uncertainties.

• Respect of obligations • Confidentiality requirements • Management of social consequences remains local and governed by national rules.

A new 2005 law • In 300+ companies • An obligation of a 3yr negotiation – information & consultation of WC

– An HR workforce planning system esp. Regarding training and mobility

The employees’perspectives • One year afterwards in the event of liquidation (dépôt de bilan), – – – –

2% of the employees are reclassified in-house in and 5% in anticipated retirement, among the others 62% of the employees remain without solutions and 18% are in long term contract.

• In the case of the creditworthy companies, the results are still better but very unsatisfactory: – 14% are reclassified in-house, – 12% in anticipated retirements, – among the others 47% remain without solutions and 22% are in long term contract

The future of Industrial Relations • Towards expertise of TU: elites of IR in companies

– Difficulty to mobilize troops – Gap between TU in companies and official TU at the national level – Trend for the new TU (SUD UNSA) toward more autonomy left to TU at the company level

• Management influenced by internationalisation, crossvergence as well as TU • Opportunity to develop IR more at workplace

5. TU systems: a comparison

Divergence factors: the national systems diversity of the workers representation • • • • • • •

Degree of formalism Trade Union density Structure of the Trade Unions Ideology Flexibility at work in Europe TU strategy National representation systems

Trade Union Density 90

1995

80

2004 70

60

Percent

50

40

30

20

10

FR

E E

LT

E S

LV

P T

P L

H U

E L

D E

C Z

E U 25

N L

U K

S K

A T

IT

IE

S I

LU

B E

C Y

M T

FI

S E

D K

0

European Commission

Multivariate analysis

European Commission

Trade Unions structure  Trade Unions craft, industrial, general or conglomerate

 historic origin and variation explained by the state of technology  no matching system

Trade Unions Structure in source : Sparrow P., Hiltrop J.M., European Human Ressource Management in Transition,, Prentice Hall, 1994 Europe Country Germany

Type Industrial

Belgium

Industrial

Denmark

Craft

Spain

General

France

General

Italy

Industrial

Netherlands

General

UK

Craft

Representation and level a single trade union : DGB Deutscher Gewerkschaftsbund; Gewerkschaftsbund 16 unified sectorial trade unions (IG Metall) separate TU for civil servants and white collar workers Deutscher Beamtenbund und Tarifunion sectorial, no company-based union 3 trade unions (Christian Confédération des Syndicats Chrétiens CSC/ACV, socialist Fédération Générale du Travail de Belgique FGTB/ABVV, FGTB/ABVV liberal Centrale Générale des Syndicaux Libéraux de Belgique CGSLB/ACLVB) close relations with the Social Democratic Party ; LO central organization :2/3 of the workforce ; 70 trade unions political olitical and ideological organizations Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) (marxist ideology) General Workers’ Confederation (Unión General de Trabajadores, UGT) (socialist) independent but strong links with political parties 5 multi-professional unions MINEFI assessed the trade union centres’ actual memberships at 525,000 members for CGT, 450,000 for CFDT, 310,000 for CGT-FO, FO, 135,000 for UNSA, 120,000 for FSU, 105,000 for CFTC, 80,000 for CFE-CGC and 80,000 for Solidaires 3 trade unions : General Confederation of Italian Workers (Confederazione ( Generale Italiana del Lavoro, Cgil)) Italian Confederation of Workers’ Unions (Confederazione ( Italiana Sindacato Lavoratori, Cisl)) Union of Italian Workers (Unione ( Italiana del Lavoro, Uil) cover industrial sectors rather than craft or occupations unions of all occupations are joined in 3 federations. TU not militant, do not use strikes as the major way to achieve their goals ; financed solely through membership contributions national confederation of trade unions ns : TUC ; 73 individual unions ; several unions represent one or more occupational groupings within the same company.

Representative model Single channel

Based on negotiation Representatives institutions are developed on a contractual basis through sectorial agreement: the trade unionist is the privileged interlocutor

Sweden Finland

I: RSU 1/3 désignés 2/3 élus Italy

Norway Denmark

Based on information the workforce representation inside the company is done by an institution different from the trade union

TU constitue the whole representation TU largest part of the representation mixed with other organisations

N Dk : instance paritaire d’information consultation

UK Ireland

Dual channel

Emergence of information committee - the Fall of voluntarism system

the council is mix the council and directed by consists of solely employee the President representatives France Belgium Luxembourg

Germany Austria Spain NL

Some representative regulation Pays

Representation

F

Comité d’entreprise

Threshold 50 Workforce delegate :

Members

Means

election

Expert training budget paid time off

DÉLÉGUÉ DU PERSONNEL

D SP

Betriebsrat

11

5 by law 200 practically ctically

election

Expert training paid time off

Comite de empresa 50 DP6

election

I

RSU représentation 15 syndicale unitaire

2/3 election No training no budget

UK

Shop stewards

Designation No law – bargained arrangement

none

No budget no expert – no paid time off during training

Level of representativeness Pays

Établissement

Inter-établissements établissements

Groupe

F

Comité d’établissement

Comité central d’entreprise (de droit)

Comité de groupe (de droit)

D

Betriebsrat

Gesamtbetriebsrat (de droit)

Konzernbetriebsrat (de + en + étendu)

SP

Comite de empresa

Comité intercentres (selon convention collective)

I

RSU représentation syndicale unitaire

Coordinamento (habituel)

Coordinamento (dans la plupart des groupes)

UK

Shop stewards

Single employer combine committee (peu fréquent)

Comité de délégué (quelques cas)

Threats posed to unions by MNCs  Financial resources : capacity to absorb losses in a particular foreign subsidiary that is in dispute with a national union  Alternative sources of supply « dual sourcing » outsourcing  Abitility to move production facilities to other cheap labour countries

Kennedy T 1978 European Labour Relations , London Associated Business Programmes

 Superior knowledge and expertise in labour relations Remote locus of authority  Production facilities in many industries  Capacity to stage an investment strike in which the organization refuses to invest in a plant that will become obsolete and non-competitive