WORKPLACE DEMOCRACY
AND THE GLOBAL FINANCIAL CRISIS
Russell Lansbury
Professor of Work & Organisational Studies,
Faculty of Economics and Business, University of Sydney
The Kingsley Laffer Memorial Lecture, University of Sydney, 16th March 2009
Workplace Democracy
‘A democratic workplace is one in which
workers have the opportunity to genuinely
participate in and influence decisions
concerning their lives at work’.
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Key Questions

Is workplace democracy relevant to the current
economic crisis?

What can be learnt from previous experience to
foster workplace democracy?

How will globalisation influence future
prospects for workplace democracy?
2
The Case for Workplace Democracy

Efficiency: enhances decision-making by taking
a wider range of views into account.

Equity: provides for greater power-sharing at
the enterprise level.

Humanistic: fulfils human needs for greater
personal involvement and self-worth.
3
Approaches to Workplace Democracy

Collective bargaining through membership of
unions.

Indirect or representative participation through
joint consultative bodies and works councils.

Direct participation in semi-autonomous
workgroups, TQM and QC circles and work
redesign.
4
Workplace Democracy and the Global
Financial Crisis
‘Social democratic governments around the
world must … devise a new regulatory
framework [which] combines productivity
growth with social equity’.
Kevin Rudd, P.M. (2008)
The Global Financial Crisis.
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Previous Laffer Lecturers
‘We are now witnessing one of the most
dramatic changes [in history] but further
changes are required [in] the relationship
between management and workers’.
Bob Hawke, P.M. Laffer Lecture: 1993.
6
Previous Laffer Lecturers
‘I want equity back on the agenda of labour
market and industrial relations reform’.
Quentin Bryce, Governor General,
Laffer Lecture: 1999.
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Previous Laffer Lecturers
‘Australia must not only strengthen the rights
of individuals at work in Australia but it should
be a force in the world … to assist other
nations to achieve fundamental workers’
rights’.
Justice Michael Kirby, Laffer Lecture: 2002.
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Previous Laffer Lecturers
‘It has always seemed incongruous to me that
while Australian citizens are able to elect their
governments, when they enter their workplace
to become industrial citizens they have no
legal right to elect a consultative body to
participate in workplace governance’.
Prof. Ron McCallum, Laffer Lecture: 2005.
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Kingsley Laffer: 1911-1993
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Kingsley Laffer: 1911-1993

Established industrial relations as a field of study at
the University of Sydney.

Founding editor of the Journal of Industrial
Relations.

Founding member of the Industrial Relations
Society.

Interdisciplinary approach and focus on global
aspects.
11
Democracy at Work: Emery & Thorsrud
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Australian Pioneers of Workplace Democracy

Fred Emery (Tavistock Institute): semi-autonomous
work groups.

Kenneth Walker (ILO): the participatory enterprise.

Bill Ford (UNSW): policy advisor, action researcher
and enterprise development agreements.

Dexter Dunphy (UTS): the sustainable corporation.
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Workplace Democracy in Australia

Joint committee introduced during WW2 and in the
1950s to improve efficiency and reduce absenteeism.

Dunstan Labor government in South Australia in the
1970s.

Hawke Labor government’s Accord in 1980s and 90s.

Recent research reported around 50 per cent of
Australian workplaces had some form of joint
consultation.
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Workplace Democracy in an International Context

Sustained initiatives within the European Union on
representative participation eg. European Works
Councils.

Employers seek greater direct employee involvement
in order to gain greater productivity and flexibility.

Coordinated market economies (Continental Europe)
have sustained greater levels of workplace democracy
than liberal market economies (Anglo-Saxon
countries).
15
Globalisation and Workplace Democracy

Concerns that globalisation has resulted in the transfer
of power from the nation state to multinational
corporations (MNCs).

Global Unions and NGOs have achieved international
framework agreements with some MNCs.

The ILO has a mandate to establish and promote core
labour standards but lacks powers of enforcement.
16
After Lean Production: The Global Auto Industry
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International Research on the Global
Automotive Industry

After Lean Production studied auto companies in
the mid 1990s. Repeated in 2000s.

The Japanese and German auto companies
benefited from direct involvement of employees in
decision making and innovation.

Toyota and VW are more likely to survive than the
'big three' US auto companies.
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ABB and Globalisation
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ABB in Europe and Australia

Three plants in Australia, Finland and Switzerland
were similar in size and products but varied in levels
of performance.

A key difference between the plants was that both the
Finnish and Swiss plants excelled either in product or
process innovation and involved their employees in
decision-making.

By contrast, the Australian plant failed to innovate or
engage its employees and was forced to close
operations.
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Future Challenges for Workplace Democracy

Globalisation presents both a threat and an
opportunity for workplace democracy.

The ILO, Global Union Federations and NGOs
are having increased success in persuading
MNCs to adhere to core labour standards.

A more integrated and comprehensive
approach is needed at the global level.
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Implications for Australia

A new ‘social contract’ is needed between key parties to
provide stronger legal rights for workers and sustain
more democratic workplaces.

A more ambitious vision is required by government,
employers and unions to achieve decent work and
democratic workplaces.

‘Australia must not only strengthen the rights of
individuals at work but we should be a force in the world
for fundamental workers’ rights’ (Michael Kirby).
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Future Directions
‘The spread of this revolution has of necessity
been slow … Nevertheless, it is no passing fad …
There has been the realisation that the traditional
authoritarian patterns of working are grossly
inefficient … In their place we need new and
genuinely democratic forms of work organisation’.
Fred Emery.
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