Industrial Relations
Catherine Voynnet Fourboul
Objectives
• Introduce Industrial Relations
• Describe the original model of Industrial
Relations in Europe
• Give information about the international TU
structure and show its complexity
• case study : Mc Donald US MNC policy in
Germany (Europe)
Industrial Relations : definition
Variety of the definitions of the
Industrial Relations
traditional field
traditionnal
Orientation
collective
bargaining
Work
Rules
Behavior Rules
Power and
conflict
large
Definition
narrow
Definition
employment
relations
large field
economic
and social
Influence
new
Orientation
One 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, Industrial Relations in Europe,
Sage 1996
Social Relations and
Industrial Relations
Industrial Relations :
External Pole
State
Directors
Management
Representatives
Labour
Social Relations:
internal Pole
Basic Theory :
Dunlop 1958
• First systemic theorization of the industrial
relations
• Emphasis on the network of standards and
of rules which are developed by the
interaction of the 3 actor types in an
environment of technology, market, labour
and regulation.
Dunlop 1958
• ideology or the shared values
• the I.R. system is a separate and distinct
system from the society
• invented and declined standards at the
national, sectoral and company level.
• environnemental contexts: technology,
market, relative power and the actors
statutes.
The employer
• MNC, Company with simple or multiple
establishments,
SME,
public
companies,holding,
• employers' association at the regional,
branch or national level
• Employer and Human Resources
Management Role
Labour
•
•
•
•
Workers
Employees
Trade Unions
Works Councils
Government
• Different possible location
Government structure :
– executive,
– legislative,
– judiciaries
in
the
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
collective bargaining criteria
• Bargaining coverage (proportion of all
employees covered / collective agreement)
• Bargaining scope ( number and nature of
the issues covered).
• Bargaining level:
– central, national
– sectorial (branches: printing, metal, banking)
– region, company
Industrial Relations in Europe
The European Union's deepening
economic integration
• the EU is tending more and more to compare itself
in many areas with the world's two other largest
economies – Japan and the USA.
• the EU's commitment: to become `the most
competitive and dynamic knowledge-based
economy in the world with more and better jobs
and greater social cohesion´ .
• Industrial relations systems and developments
play an important part in determining economic,
employment and social outcomes.
• Aim: highlight some of the main areas of
difference and similarity.
European social model
• the manner of regulating employment and
social issues
– the `social partners´
– bipartite and tripartite consultation and
dialogue
– collective bargaining
– employee participation
The `social partners´
– the term often used at EU level and in
many Member States to denote trade
unions and employers' organisations
Bipartite and tripartite
consultation and dialogue
– At EU level, `social dialogue´
• between European-level trade union and employers'
organisations,
• at the overall level (known as `intersectoral´ or
`interprofessional´ ) or at the level of individual economic
sectors.
– it involves discussions, cooperation, consultation
(negotiations and agreement are possible)
• bipartite, involving only unions and employers' organisations,
• or tripartite, often instigated and structured by the European
Commission or in response to Commission proposals.
– In many EU Member States, there are consultative
and cooperative relationships between trade union
and employers' organisations
Collective bargaining
• Process of establishing pay, terms and
conditions of employment
• Through bipartite negotiation and agreements
• Among trade unions and either employers'
organisations or individual employers.
– In the EU Member States, collective bargaining
may occur at many levels – intersectoral, sectoral,
regional, company, workplace etc
– The importance of level and relationships among
them differ between countries
Employee participation
• `indirect´ or representational employee
involvement, through elected or appointed
representatives, at company level.
• Through `works councils´ or similar bodies, with
information and consultation rights
– (stronger `co-determination´ rights on some topics
in some countries, such as Germany).
– employee representation on the board of directors
or supervisory boards
• `direct´ employee involvement (ways of
informing individual employees) or employee
financial participation in company results.
Information and consultation
definition
Information
what and when
 Trade union
Documents
Basic information,
Transmission
periodic, occasional  representative
Reports
(prior to decisions)
council
 workforce
information meeting
Consultation
Interlocutors
Compulsory advice
 prior to decision
 Trade union
or not
 for activities to
 representative
be planed
Proposal
 for the definition
of guidance
council
Negotiation and codetermination
definition
Negotiation
agreements contract
Collective
what and when
Interlocutors
regulation settlement ,
 trade unions
joint decision making
 TU representatives
 representative
bargaining
council
Codetermination
agreement process
decision making
representative council
veto right
regulation settlement,
representatives take
joint decision making
activity program,
place in the decision
mix councils
nomination of people.
making council
Trade unionism in Europe
Trade unionism Contrast at the
EU and national level
• at the EU level: high degree of unity & coherence
• at national level: enormous diversity and
sometimes division.
• The European Trade Union Confederation
(ETUC) brings together major confederations in
EU countries (74 in total).
• managerial and professional staff belong to the
European Confederation of Executives and
Managerial Staff (CEC);
Trade unionism Contrast at the
EU and national level (2)
• organisations (generally outside the trade union
`mainstream´ ) affiliated to the European
Confederation of Independent Trade Unions
(CESI).
• affiliated to ETUC are 11 `European industry
federations´, grouping most major EU trade
unions in their respective sectors. ETUC claims a
total affiliated membership of 60 million.
Key differences between
European I.R. systems
•
•
•
•
•
•
Trade Unions density and structure
Trade Unions strategies
Managerial styles in I.R.
collective bargaining levels
industrial conflict and strikes
industrial democracy and employee
participation
Degree of unionization : density
Country :
high
unionization
% of workforce
belonging to a
union
Country :
low
unionization
% of workforce
belonging to a
union
Denmark
87
Germany
30
Belgium
69
Portugal
30
Luxembourg
50
UK
29
Ireland
44
Netherlands
27
Italy
35
Spain
15
Greece
32
France
9
source : EIRO 2000
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 Europe
Pays
Germany
Belgium
Denmark
Spain
France
Italy
Netherlands
UK
Type
Type représentation et Niveaux
Industrial a single trade union : DGB ; 16 unified sectorial trade unions (IG Metall)
separate TU for civil servants and white collar workers
Industrial sectorial, no company-based union
3 trade unions (Christian, socialist, libéral)
Craft
close relations with the Social Democratic Party ; LO central
organization :2/3 of the workforce ; 70 trade unions
General political and ideological organizations ; CCOO (marxist ideology) UGT
(socialist) , tentative of merger of this 2 trade unions
General independent but strong links with political parties
5 multi-professional unions
Industrial 3 trade unions : CGIL, CISL, UIL cover industrial sectors rather than craft or
occupations
General unions of all occupations are joined in 3 federations. TU not militant, do not
use strikes as the major way to achieve theri goals ; financed solely through
membership contributions
Craft
national confederation of trade unions : TUC ; 73 individual unions ; several
unions represent one or more occupational groupings within the same
companie.
source : Sparrow P., Hiltrop J.M., European Human Ressource Management in
Transition, Prentice Hall, 1994
Comparison with USA and JAPAN
• USA: structure of trade unionism is relatively
similar to that in Ireland and the UK. (single main
national centre, the American Federation of Labor
and Congress of Industrial Organisations (AFLCIO), made up of a relatively large number of
industrial and occupational unions.
• Japan: 2 confederations of significant size. Rengo
organises over 60% of unionised workers. Rengo's
membership is based on enterprise-level unions,
organised in sectoral federations (similarities with
France). The second confederation, the National
Confederation of Trade Unions (Zenroren),
represents 7% of all unionised workers.
Basic trade union organisation,
EU, Japan and USA
.
Mainly
industry/sector
organisational
structure
Mixed
(industry/general/
occupational)
organisation structure
Single main
confederation
Austria, Germany, EU
level
Ireland, UK, USA
Multiple
confederations
(divided on
religious/political/
organisational lines)
Belgium, France, Italy,
Japan, Luxembourg,
Netherlands, Portugal,
Spain
Denmark, Finland,
Greece, Norway,
Sweden
Trend towards merger of trade
union organisations.
• The number of European industry federations
affiliated to ETUC has been reduced by mergers
recently (eg in the food and agricultural sectors,
and in services), while the number of member
unions of most national union confederations has
declined
• A particularly notable recent merger was the
creation in Germany in 2001 of the Unified
Service Sector Union (Vereinigte
Dienstleistungsgewerkschaft, ver.di), which is
thought to be the largest union in the democratic
world, with nearly 3 million members.
Divergence of Trade Unions
strategies source Bamber & Lansbury 1987
- maximalist respons : CGT
- interventionnist approach : Italians Trade
Unions,
- defensive-particularistic strategy : UK
- corporatist strategy : Swedish Trade Unions
Decentralization of collective
bargaining
• Pursuit of flexibility in
order to respond to
fast changing markets
• centrally co-ordinated
decentralization
prevails (parallel with
managerial
responsibilities
• MNC’s strong
influence
• Sweden : central
agreement - important
• Germany : works
councils
• UK : no sectorial
bargaining, plant
bargaining formalized
Strike patterns
USA Canada Ireland
long duration of stoppages
Italy, Spain, Finland,
number of people who participate is very
Israel
high
Australia, New-Zealand,
number of stoppages : very high
France, Portugal
Belgium, Denmark, Pays- low incidence of strike activity, but
Bas, Norway, Sweden
duration not insignificant
UK, Japan
no one strike characteristic is dominant
A century of union organization, 1890-1990
In Van Ruysseveldt J., Visser J., Industrial relations in Europe, SAGE, 1996
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
- 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 noncompetitive
Kennedy, T 1978, European Labour Relations , London Associated Business Programmes
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Centralization : HQ / subsidiary
source : Hamill J., 1984, IRJ
30
25
20
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HQ decision
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sub. decision
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International TU's structure
Reasons for the lack of success of
international trade unions
• Good wages and working conditions
provided by MNCs
• strong resistance from multinational
managements to transnational bargaining
and consultation
• ideological, structural and political
differences between national Unions
• differing national laws et regulations
International trade unions
structure
• ICFTU International Confederation of Free
Trade Union
• WFTU :World Federation of Trade Unions
• ITS: International Trade Secretariat
• ETUC : European Trade Union
Confederation
• UNICE : Union of Industries of the
European Community
ICFTU International Confederation
of Free Trade Union
• anti communism
• developed with companies becoming
multinational
• international cooperation between national
Trade Unions : a network
– at different levels : world, regional, national,
professional
– through International Trade Secretariat
ITS: International Trade
Secretariat
• They bring together individual national
unions in particular sectors of industry.
• The ITSs are autonomous and self
governing organizations but follow the
ICFTU on broad policy issues.
• the larger : International Metalworkers’
Federation IMF
• A general conference of ITSs once a year
Some ITS
ICEM
International Federation of Chemical, Energy, Mine and
General Workers' Unions
IUF
International Union of Food, Agricultural, Hotel,
FIET
International Federation of Commercial, Clerical,
Professional and Technical Employees
IFBWW International Federation of Building and Wood Workers
IMF
International Metal Workers' Federation
ITGLWF International Textile, Garment and Leather Workers'
Federation
ITF
International Transport Workers' Federation
ICFTU : A complex
membership system
• member federations opposed at the national
level (FO/CFDT)
• no membership rules between federations,
confederation, ITS and ICFTU
• the most integrating and representative
organization:
• 124 millions of members represented by
213 members in >143 pays et territories
ICFTU relations with
other organiszations
• ICFTU and ETUC : same address in Brussels
but competition.
• continuous dialogue between ITS and ICFTU
• ITS
: operational approach, ICFTU :
political approach
• ICFTU and UNO : recommendation IMF,
UNESCO, Commission United-Nations,
International Labor Organization
ETUC : European Trade Union
Confederation
•
•
•
•
•
creation : 1973 linked to Europe
play a part at the European institutions
claim difficulty at the European level
no authority on its trade unions members
meeting and exchange location between
national trade unions
• 60 million affiliated members
ETUC : European Trade Union
Confederation
• Disparity in the representation
– favorable to the British TUC et DGB
– unfavorable to the French trade unions
• tries to find a consensus
• membership condition :
– not belonging to WFTU
– take into account the opinion of the oldest
– independent from the ICFTU
An example : French CFDT
• In 74 : CFDT become member of the ETUC
– french FO was opposed
– compromise with German DGB.
– French CGT is refused still march 99
• work with other European trade unions
• Jacques Delors et Jacques Moreau CFDT.
• En 89 become member of the ICFTU the at
the steering committee
Employers' organisations
Union of Industrial and Employers'
Confederations of Europe & CEEP
• The UNICE: the main national intersectoral
confederations of private sector employers in the
EU Member States (and elsewhere in Europe).
– engages dialogue, negotiations with ETUC
– promotes its members' interests, seeks to influence EU
decision-making).
• Since 1998, UNICE has cooperated closely in EUlevel social dialogue and negotiations with ETUC
• The European Centre of Enterprises with Public
Participation and of Enterprises of General
Economic Interest (CEEP) (organisations with
public participation)
Sectoral social dialogue
• 20 sectoral dialogue committees bring together
European-level representatives of trade unions and
employers for discussions on employment and
social issues.
• Sectors: agriculture, banking, civil aviation,
cleaning, commerce, construction, electricity,
footwear, hotels and catering; inland navigation,
insurance, leather, maritime transport, personal
services (hairdressing), postal services, private
security, public services, railways, road transport,
sea fishing, sugar, telecommunications, textiles
and clothing, tobacco and woodworking.
Sectoral social dialogue: action
• Joint texts (opinions, declarations, codes of
conduct etc) on a range of issues (eg
training, employment, fundamental rights or
health and safety)
• Not real bargaining role over pay and
conditions, except– eg the conclusion of an
agreement on the organisation of working
time in March 2000 in civil aviation
Organisation of employers at
national level
• At intersectoral level, (B, Dk, F, Ir, I), NL, Sp, S
UK) : a single umbrella organisation representing
companies' employers' and business/trade interests
• In D –a division between the representation of
employers' and of business/trade interests, with
separate central organisations for each.
• separate bodies for industry, services and in some
cases agriculture as in Finland, Greece and
Portugal.
Industrial relations role of employers'
organisations in the EU, Japan and USA
Bargaining or
significant dialogue
with unions
Intersectoral
organisations
Little/no bargaining
or dialogue with
unions
EU level,
UK, USA
Au, B Dk, Fin, F, D, G,
Ire, I, Japan, Lux, NL,
P, Sp, S
Sectoral organisations EU level,
Ireland, Japan,
Au, B Dk, Fin, F, D, G, Luxembourg, UK,
USA
I, NL, P, Sp, S
Wage bargaining levels in the
European Union
Source: EIRO * = existing level of wage bargaining; *** = dominant level of wage bargaining.
Intersectoral
level
Sectoral level
Company level
***
*
*
Aus D
.
***
*
I NL P SP S
.
***
*
F UK
.
*
***
.
B Fin Ire
Wage formation in the European Union
Source: Emmanuel Mermet, ETUI, October 1999
Country
Productivity
Enterprises'
profits
Inflation as a general indicator
Aus
**
Ire
Country
Productivity
Enterprises'
profits
Inflation as determinant S UK B
Fin P
**
G
NL
**
**
SP
Dk
**
***
F
D
***
**
***
**
***
***
***
Collective bargaining coverage
Country
Japan : 21 %
USA : 15 %
Coverage
Austria Belgium
100%
Sweden (private sector)
90%
Denmark
80%
Netherlands
75%
Germany - France
68%
UK (non-managerial staff)
36%
system of
sectoral
agreements
at company
level
Employee participation
Employee participation :
`works councils´
•
•
System of indirect or representational employee
participation at company level or similar bodies.
Aus, B, Dk, Fin, F, D, G, I, L, ND, P and Sp.
1. - elected by employees (sometimes trade union lists)
2. - have a range of information and consultation rights
3. - even `co-determination´ rights on some topics in
some countries (eg Germany)
4. - In Sweden, legislation provides similar rights to
trade unions in companies.
–
Only in Ireland and the UK: no general,
permanent system of works council-type bodies.
Patterns of representation
single channel
based on negotiation
Representatives institutions are
developed on a contractual
basis through sectorial
agreement: the trade unionist is
the privileged interlocutor
dual channel
based on information
the workforce representation inside
the company is done by an
institution different from the trade
union
the council is
mix and
directed by
the President
UK
Ireland
Italy
France
Belgium
Luxembourg
the council
consists of
solely employee
representatives
Germany
Spain
Employee representation on the
board of directors
• (or supervisory boards)
• widespread participation in Aus, Dk, Fin, F,
D, Lux, NL and S, and restricted to some
public sector organisations in G and Ir.
• European Works Councils (EWCs),
information and/or consultation on specific
issues, business transfers, collective
redundancies and health and safety.
Employee participation in the USA
• no legislation providing for works council-type
structures or board-level employee representation.
• 96% of large employers had some form of
employee involvement team, (1994)
• 52% of employees reported some form of
employee participation at their workplace.
• participation arrangements are limited in their
scope
• The reason is that the National Labor Relations
Act prohibits the formation of an employerdominated `labour organisation´ or `employee
representation committee´ which deals with
management over pay, working time or conditions
Employee participation in Japan
• not governed by legislation, but
• high level of employee-management cooperation
• (1999) 42 % of establishments >30 employees had
a `labour-management consultation organisation´
– a permanent structure,
– Japanese labour-management consultation organisations
deal with working time, working conditions, health and
safety, welfare, childcare, management policies,
overtime premia, pensions, lay-offs, restructuring,
production/sales and training.
– Participation take many forms: written explanation by
management, exchange of opinions, discussion and
agreement.
Case study: McDonald
Mc donald case
Royle T., Avoidance strategies and the German system of co-determination,
International Journal of HRM, december 1998
• In 82 : 2 betriebsrat for 160 shops
• neither group comity nor central comity
• law conditions : 1 betriebsrat by company
with at least 5 employees
• the companies have between 50 and 100
employees but no betriebsrat , why?
Mc donald
explanations
-
Part time working
high turn over
Students, second income
Foreigners (Turkey and Eastern) : 50 to 80
% of employees
• employees do not know their rights
Mc donald
explanations
• no cooperation willingness with Trade
Unions : only an image strategy.
• American HQ links betriebsrat with Trade
Unions (communists).
• good management means no BR
Mc donald
explanations
• In 1995 election of only 6 additional BR
• students more aware of their rights bring
about the new BR.
• Management tries to delay the process
• they give special bonus from DM 5.000 to
DM 90.000 in order to get rid of too zealous
students
Avoidance strategies
•
•
•
•
•
•
•
Legal form and job classification
illegal measures
regulatory lacunae
Co-option or capture
Bypass
recruited acquiescence
coercive comparisons