Bargaining Power

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INSIGHTS GAINED FROM COMPARATIVE LABOR RELATIONS

One way to gain perspective on the labor relations system in your home country is to compare it with systems in other countries. The U.S. labor relations system is unique in many ways. The United States, for example, has one of the lowest rates of unionization of any advanced democratic economy, and its rate of unioniza- tion has fallen faster in the past 30 years than that of any other industrialized country in the world. Management in the United States opposes unions more strongly than managers in most other countries, and unions in the United States are less closely tied to political parties than their counterparts are in Europe, Australia, and many newly industrialized countries.

Other differences between labor relations in the United States and labor relations elsewhere are noted throughout this chapter. A comparative look at what happens in other countries makes is possible to assess whether any features of the labor relations systems in other countries should be imported to the United States. This question is now on the minds of many U.S. labor relations practitioners.

The three-tiered framework needs to be supplemented to take account of the important roles that governments, international agencies, and NGOs play in industrial relations in countries other than the United States (see Figure 15.1 ). A comparative assessment of labor relations also should take account of the substantial differences that exist across countries in their laws, political systems, and history. The diversity in labor relations practices around the globe is so great that it is not possible to present even a cursory examination of all of them. As a framework for an international perspective, then, this chapter examines in detail the key features of the labor relations systems in Germany and Japan as examples of advanced industrialized countries and in China, India, South Africa, and Brazil as examples of transitioning economies. 1

AN OVERVIEW OF HOW LABOR, MANAGEMENT, AND GOVERNMENTS INTERACT

Regardless of where a country is on a spectrum of industrialization, labor, manage- ment, and government engage in complex interactions that strongly infl uence

Labor Relations in Other Countries

C o p y r i g h t 2 0 1 7 . I L R P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 2/21/2022 2:33 AM via UNIVERSITY OF MARYLAND GLOBAL CAMPUS AN: 1589152 ; Harry C. Katz, Thomas A. Kochan, Alexander J. S. Colvin.; An Introduction to U.S. Collective Bargaining and Labor Relations Account: s4264928.main.eds

Labor Relations in Other Countries 385

the evolution of labor relations. For example, unions and other workers’ movements in some countries have aligned with a political party or are the core constituents of a labor party that is active in mainstream politics. In this chapter, we will discuss some cases where unions are aligned with the governing leaders or a governing party. Another way unions and workers have infl uenced governments is through their involvement in protests or other political actions that are part of democratization campaigns or movements. Some of these efforts to promote democracy have succeeded and have led to major political transformations.

On the other hand, governments in some countries have acted to sharply curtail trade union activities and power. Governments have done so either by outlawing union activities or by directly intervening to stop a strike or a union organizing effort. In some countries unions are allowed, but governments control them or sharply constrain what they can do. We describe some of those cases. It is important to differentiate between trade unions that are independent and those that are dominated by a government.

Governments also critically affect labor relations in companies and sectors that a government owns or runs. Historically, nationalization of telecommunications, airlines, or banking industries or resource extraction enterprises, for example, has infl uenced the labor relations and employment conditions in those companies and sectors. Governments also have signifi cant infl uence on labor relations through regulations, in particular through laws that regulate the right to strike and other union activities.

INTERNATIONAL AGENCIES

EXTERNAL ENVIRONMENT

NEGOTIATIONS OUTCOMES

GOVERNMENT ACTIONS AND

POLICIES NGOs

Strategic level

Functional level

Workplace level

Union strategies and

structures

Bargaining structure

NEGOTIATIONS PROCESS

Work Organization Employee motivation and

participation Conflict resolution

Management strategies and

structures

Figure 15.1. The three-tiered approach to the study of comparative labor relations

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386 Part V. Special Topics

Management and the interest groups that represent employers are also often active participants in political processes in many countries that are striving to promote their interests. For example, in some countries the business community is strongly aligned with a particular political party or is part of a governing coalition. Management can use its infl uence to promote the labor laws or the tax, trade, and other economic policies it favors.

An Example of How a National Government Has Shaped Labor Relations: China

The role of national governments in labor relations varies greatly. China is an example of a country where the national government and the Communist Party played a central role in the past in the functioning of the economic system and of employment relations. However, the roles of the national government and the Communist Party have evolved as a result of the introduction of economic reforms that led to a greater role for market forces, as Box 15.1 describes.

BOX 15.1 China: The Evolving Role of the Government and the Communist Party

Before market-oriented economic reforms, China had a planned economy in which the national government was the single employer. In the planned economy, the government set up detailed national and fi rm-level plans that included production and wage levels. Communist Party secretaries were the primary fi gures in enterprises; they helped maintain the infl uence and political power of the Communist Party and oversaw economic and social activities in enterprises. In this system, since the Communist Party (and the national government) claimed to represent the interests of the working class, there was no representative role for trade unions.

Economic reforms introduced from the 1980s on led the national govern- ment and the Communist Party to gradually withdraw from the micromanage- ment of workplaces. This is particularly true for the private sector, where employers were given autonomy in business operations and employment, albeit within the constraints provided by laws. In state enterprises, management no longer needs to fulfi ll political functions for the government. However, the government still has considerable infl uence in state enterprises, particularly through its appointment of top managers. These appointed managers still hold the status of Communist Party offi cials and can be transferred to other Communist Party or government posts at any time.

In addition, the national government in China continues to act as a regulator, arbitrator and mediator, and inspector in the employment system.

Source : MingWei Liu, “China,” in Comparative Employment Relations in the Global Economy , ed. C. Frege and J. Kelly (New York: Routledge, 2013), 324–347.

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Labor Relations in Other Countries 387

THE ROLE THAT LABOR HAS PLAYED IN DEMOCRATIZATION

Since World War II, the labor movement has played key roles in introducing or deepening democracy in a number of transitioning countries. Events in South Africa and Korea are described in Boxes 15.2 and 15.3 below. A common theme in these and other countries is that the labor movement and unions often have aligned with student groups and other active members of civil society to increase

BOX 15.2 The Role Unions and Labor Protests Played in Bringing an End to Apartheid in South Africa

Apartheid was a racial segregation system enforced by the South African government from 1948 to 1994. Under apartheid, the rights of black and mixed-race South Africans were severely restricted. The National Party controlled the economic and social systems of South Africa during the apartheid period.

The African National Congress (ANC), founded in 1912, was a major force of opposition to the apartheid system. Throughout the fi rst forty years of resistance, the ANC focused on using legal tactics and nonviolent direct action as its method of protest. However, the perseverance of apartheid even in the face of these tactics led the ANC to shift to advocating violent resistance activities, such as bombing government facilities, so long as the tactics avoided civilian deaths. Then labor protests emerged as a key challenge to apartheid; black trade unions and eventually trade unions that organized white workers led these protests.

During apartheid, the government sought cheap labor on mines and farms, which led to the formation of a migrant labor system among the black population and a set of laws that reserved specifi c, separate job sets for different racial populations. In response to such legislation, unions such as the South African Congress of Trade Unions (SACTU) emerged in the 1960s, only to be brutally oppressed by the state. However, in the late 1960s, leaders of the black consciousness movement, who realized the potential of union activity, joined with unions to take more aggressive actions to try to end apartheid.

A key turning point came in 1973 at a large industrial complex in Durban, South Africa. On January 9, all 2,000 workers at the Coronation Brick and Tile plant in the Durban complex went on strike, demanding wage increases and presenting an elected committee to negotiate with management. The resulting wage settlement spurred widespread union activity throughout the city of Durban and then in many other parts of South Africa. Transport, and then municipal, workers followed suit and within one month, 30,000

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388 Part V. Special Topics

workers in Durban were on strike. The apartheid system, which depended upon black labor to keep its economy running, was facing for a serious challenge to its continuation the fi rst time.

The Durban-inspired strike wave led to the establishment of several large trade union federations, including the Federation of South African Trade Unions (FOSATU) and the Congress of South African Trade Unions (COSATU). Subsequent strikes organized by these federations led the South African government to launch investigations of wage levels and to eventually pass amendments to the Labor Relations Act that established unfair labor practices and permitted black trade unions to form legally.

Critically, the base of worker militancy was in the manufacturing, com- merce, construction, transport, and communication sectors. In contrast to the mining industry, which corralled migrant workers into residential compounds, these sectors were the most feasible to organize because the rising cost of white labor meant that mining employers were increasingly dependent upon the employment of Africans. Industries in the manufacturing and service sectors were the highest paid in the economy, refl ecting the developing power and strategic location of black semi-skilled workers. Meanwhile, the newly emerging democratic trade unions premised their initial growth on the organization of African labor.

Although the new unions faced severe repression and were always chal- lenged by the that fact that a mass of surplus labor existed because of an endemically high level of unemployment among black workers, they managed to survive, grow, formalize, make wage gains, and erode the foundations of workplace despotism.

The apartheid regime faced a severe challenge to its authority in 1973, when the United Nations General Assembly denounced apartheid, which was followed by the UN Security Council ’ s vote to impose an embargo on the sale of arms to South Africa in 1976. Facing growing international pressure, the National Party instituted several reforms, and in 1994, a new constitution was adopted that enfranchised blacks and other nonwhite racial groups through democratic elections. A key step in the fi nal end of apartheid was the release of Nelson Mandela, a leader of the anti-apartheid movement, from prison. Mandela became the head of the fi rst post-apartheid democrati- cally elected government. Although he had been imprisoned for twenty-seven years, he was able to live a long and highly infl uential life (he died at age 94 in 2013).

Although many factors contributed to the ending of apartheid, it is clear that unions and labor protests contributed much to this transformation.

Source : Lester Kurtz, “The Anti-Apartheid Struggle in South Africa (1912–1992),” International Center on Nonviolent Confl ict, June 2010, http://www.nonviolent- confl ict.org/index.php/movements-and-campaigns/movements-and-campaigns-summarie s?sobi2Task = sobi2Details&sobi2Id = 29 .

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Labor Relations in Other Countries 389

BOX 15.3 The Role of Korean Unions in Democratization and Political Change

The post–World War II history of Korea was marked by authoritarian rule by governments in league with the military. Violent political protests erupted periodically to challenge that rule. Labor unions have played leading roles in those political protests. In 1960, trade unions played a leading part in the violent protests that culminated in the fall of the Syngman Rhee govern- ment. In 1980, violent protests again swept the country as workers demanded workers’ and union rights and improved wages and working conditions. In 1987, after Roh Tae-Woo, the ruling Democratic Justice Party ’ s presidential candidate (and eventual victor in a subsequent election), pledged his support for popular elections to determine a new president of the Republic of Korea, a democratization movement began. The subsequent democratization process unleashed popular protests and demands, particularly within the trade union movement.

A massive strike wave followed, along with a rapid rise in union member- ship and an explosion in wage levels. On May 2, 1990, for example, there were violent protests in the port city of Ulsan when 30,000 workers from affi liated Hyundai companies held rallies at work sites to protest a massive police raid on strikers at the Hyundai Heavy Industries Company.

Worker protests were in part directed at existing trade unions and union leaders. An array of unions was affi liated with the Korean Federation of Trade Unions, and protesting workers opposed the complicity that had existed between these unions and the government and employers. Workers not only demanded higher wages and better working conditions but also sought procedures that would allow unions that were independent from government and managerial dominance.

The protest wave cooled down in the early 1990s, but another wave of labor protest occurred in early 1997, spurred by government efforts to change Korea ’ s labor laws to introduce more fl exibility into the labor market and address problems that had begun to surface in Korea related to com- petitiveness in the global market.

Labor protests erupted in January 1997 after a secret session of the National Assembly proposed a harsh bill that among other things would make it easier for fi rms to lay off employees. A three-week wave of strikes followed that focused on the large fi rms, including the Hyundai Motor Car Company. The strike wave was followed by months of negotiations, often behind the scenes, that led to a new labor law bill that was adopted in March 1997 with the support of the opposition and government political parties. In recent years, changes in labor laws in Korea have included the legalization of collective negotiations for public school teachers and the creation of an

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390 Part V. Special Topics

unemployment fund. The number of irregular and nonstandard workers has increased in Korea in recent years. While the labor movement has not been happy about all of these developments, unions have tried to infl uence events through democratic political channels.

Sources : Wonduck Lee and Joohee Lee, “Will the Model of Uncoordinated Decentralization Persist?” in The New Structure of Labor Relations: Tripartism and Decentralization , ed. Harry C. Katz, Wonduck Lee, and Joohee Lee (Ithaca, N.Y.: ILR Press, 2003), 43–65; Byoung- Hoon Lee, “Employment Relations in South Korea,” in International & Comparative Employment Relations: Globalization and Change , 6th ed . , ed. Greg J. Bamber, Russell D. Lansbury, Nick Wailes, and Chris F. Wright (Australia: Allen & Unwin, 2016), 266–290.

democratization. In the case of South Africa, this led to the end of apartheid. This leads many to question what will happen if union membership continues to decline, possibly to the point that the political infl uence of unions is greatly weakened. What forces or social groups, if any, will replace the positive contribution unions make as defenders and proponents of democracy?

BRIEF DESCRIPTIONS OF THE LABOR RELATIONS SYSTEMS AND KEY CONTEMPORARY ISSUES IN GERMANY, JAPAN, BRAZIL, CHINA, INDIA, AND SOUTH AFRICA

The sections that follow provide brief descriptions of the key features of the labor relations systems in Germany, Japan, Brazil, China, India, and South Africa and highlight the key issues that have surfaced in each of those countries. Readers can fi nd more complete descriptions of the systems and contemporary issues in the sources provided at the end of this chapter. 2

We fi rst focus on Germany and Japan, as these are two highly advanced industrial economies with labor relations systems that differ greatly from each other and from the system in the United States.

LABOR RELATIONS IN GERMANY

The distinguishing feature of labor relations in Germany is the presence of codetermination , which enables elected employee representatives to participate in decisions of fi rms related to business and human resources. 3 Codetermination procedures are mandated by German federal law and apply to all companies in the country regardless of whether employees in those companies belong to unions.

Codetermination

There are two key parts to German codetermination: the presence of employee representatives on works councils and company boards. Codetermination gives

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Labor Relations in Other Countries 391

employees a form of representation that parallels union representation. Although codetermination and collective bargaining procedures are formally distinct forms of worker representation, there are many close connections between the operation of these two channels of representation and the individuals involved in each.

Employee Representatives on Supervisory Boards

German federal law mandates that employees elect representatives to the supervisory boards of all German companies. The number of representatives employees elect to a supervisory board varies by the size of the fi rm and by industry (special provisions cover the coal and steel industries). To understand the implications of these procedures, it is helpful to examine the structure of German company boards.

German fi rms have a two-tiered board structure. The supervisory board ( Aufsichtsrat ) is the higher-ranked board and is responsible for monitoring managerial promotions and performance and appointing top managers. The lower managing board ( Vorstund ) runs the fi rm on a day-to-day basis and implements most decisions of management.

Employee representatives to the supervisory board are elected from the ranks of blue- and white-collar employees with each category of employee guaranteed proportional representation. The law also reserves two or three of the supervisory board seats for union delegates, depending on the size of the board. In impasse situations, the chair of the supervisory board (who is nominated by shareholders) can vote to break the tie. Employee representatives on the supervisory board often run on slates associated with particular unions and are often active in unions. They are frequently union offi cials.

The consequences of employee representation on supervisory boards varies across companies and is sometimes hard to detect. Some analysts claim that employee board representation has provided a major contribution to the low strike frequency that has been characteristic of the German labor relations system since World War II.

Works Councils

The works councils mandated by federal law for all private enterprises with more than fi ve employees are the second major component of the German codetermina- tion structure. Works councils have many rights to information, consultation, and codetermination. The 1972 Works Constitution Act, for example, stated that works councils can be involved in resolving confl icts related to the following issues:

Discipline Daily working hours and breaks Temporary short-time or overtime work Piece rates for jobs Pay systems Suggestion schemes Holiday schedules How employee performance is monitored

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392 Part V. Special Topics

Safety regulations Company welfare services Administration of employee housing

Works councils also codetermine any changes in the pace of work or the work environment. The law requires that works councils and employers negotiate how change happens whenever any major changes take place in how a company operates. When management wants to lay off employees, it must negotiate with the works council and reach an agreement (specifi ed in a “social plan”) on the factors that determine who gets laid off and the compensation arrangements for those who are laid off.

Members of works councils are elected by all employees in a fi rm regardless of union affi liation. However, works council members usually cooperate closely with union offi cers or hold union offi ce themselves. Works councils cannot call a strike, but they can sue management in a case of a breach of contractual rights.

Union Representation and Structure

Unions also play an important role in the German labor relations system. Unions represent 25 percent of the German work force, but nearly 80 percent of the German work force is covered by collective bargaining agreements due to the legal extension of major collective bargaining agreements. 4 After German reunifi ca- tion in 1990, unions based in the former West Germany extended their jurisdiction to the former East Germany. While economic transformations and the bankruptcy of many fi rms has weakened unions in the eastern parts of unifi ed Germany, unions have played a key role in the restructuring of this region.

German unions provide representation during the negotiation of collective bargaining agreements that set pay increases and other employment terms. Unions also typically are actively involved in the codetermination processes, in some cases through the union activists or offi cers that serve either as employee representatives on a supervisory board or as works councilors.

German unions also are generally active in political and social issues. The largest federation of German unions, the Deutscher Gewerkschaftsbund (DGB), is closely aligned to the Social Democratic Party. 5

Collective Bargaining in Germany

Collective bargaining in Germany is generally highly centralized. Most collective agreements are reached at the industry or regional level. The most important unions in the private sector represent workers in one or more industries. IG Metall, for example, represents workers in the metalworking industries. In 2001, a superunion, ver.di, which represents workers throughout the service sector, was formed through the amalgamation of a number of private and public sector unions (see Box 15.4 ).

German labor law does not give unions exclusive representation rights. More than one union can (and often does) represent employees at a work site, even among employees who perform similar jobs.

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Labor Relations in Other Countries 393

Employers are commonly represented by employer associations organized by industry or in regional collective bargaining. 6 Once an agreement is reached between a union and an industry association over wages and other basic employment terms, these terms are extended by law to other employees and fi rms in that industry. Distinctions between unionized and nonunionized workers are not allowed in collective bargaining agreements.

Often collective what are called ordinary bargaining agreements last only one year and include pay in their terms. These ordinary agreements are signed under framework agreements that last for a number of years. Plant-level negotiations between a works council and management typically supplement the industry agreements.

BOX 15.4 German Service Unions Merge to Create ver.di, a Union with Three Million Members

On March 17, 2001, more than 1,000 delegates from Germany ’ s fi ve service sector unions voted to dissolve the structures in their respective organizations and merge into one of the world ’ s largest labor organizations. The new organization, which has a total membership of three million, is called the United Services Producers, or ver.di (short for Vereinte Dienstleistungs- gewerkschaft). Ver.di consists of workers from the Public Services and Transportation Union (ÖTV), German Salaried Employees Union (DAG), German Postal Employees Union (DPG), Trade, Banking, and Insurance Union (HBV), and Media Union (IG Medien).

The founders of ver.di hoped that the merger would create a united front to combat new problems the labor movement faces in Germany. Their goal was for ver.di to create a stronger position for combating problems such as declining union membership levels and rising unemployment rates. The new superunion also sought to counteract the growing lobbying efforts of business interests that want to restructure employment markets and weaken the role of unions.

Ver.di has had limited success in achieving its ambitious goals. It has not been able to reverse the spread of privatization and concession bargaining in the public sector. Furthermore, young workers have exhibited reluctance to join ver.di (or other German unions) at the rates their parents did, and the political infl uence of ver.di has not increased to the degree its founders had hoped.

Sources : “Merger of German Labor Groups Would Create World ’ s Largest Union,” Daily Labor Report , December 29, 2000, A-3; “Merger of German Service Unions Creates 3-Million Member Union,” Daily Labor Report , March 20, 2001, A-4.

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394 Part V. Special Topics

Since 2000, there has been some movement toward more decentralized collective bargaining in Germany. This has happened, for example, when fi rms in the eastern region have refused to honor terms in an industry-level collective bargaining agreement. Even in the western region, there has also been a growing tendency toward fi rm-level deviations (“concessions”) in fi rms that face job losses and threatened closure. However, even in the face of these pressures, the German collective bargaining system remains relatively centralized.

Vocational and Apprenticeship Training

A very strong vocational and apprenticeship training system supports relations between labor and management in Germany. Young people must choose among three educational tracks around age 16: a college-bound program, an apprenticeship vocational school program, or a general education program.

Two-thirds of high school graduates who do not go on to college enter the labor force as graduates of a vocational educational program. The apprenticeship programs in vocational schools are overseen by a joint business-labor group that sets the qualifi cations for each occupational program. This system of training and certifi cation provides German employers with a highly skilled labor force and is often cited as one of the key sources of Germany ’ s economic success.

In summary, the German model of labor relations stresses formal, legally mandated structures for worker representation and training. These include codetermination, employee representatives on company boards, works councils, apprenticeship training, and collective bargaining terms that apply across all the fi rms in an industry. Through these formal structures, German unions and employers have achieved high levels of wages and social benefi ts, strong productivity performance, fl exibility in the use of human resources, and low rates of strike activity.

Although the modernization of eastern Germany has been very costly and led to high unemployment, it is noteworthy that this transition occurred without signifi cant opposition from either management or labor. This too attests to the high level of acceptance of unions and the codetermination system in German society.

LABOR RELATIONS IN JAPAN

Japan has a distinctive labor relations system that has several key features. Some of these key features are also found in other Asian countries.

Enterprise Unionism

The distinguishing feature of Japanese labor relations is the central role of enterprise unions. 7 Enterprise unions in Japan represent both the white- and blue-collar employees of a fi rm, regardless of occupation. They also include management staff. Of the fi rm ’ s full-time employees, only the higher-level managers do not belong to the enterprise unions. Thus, supervisors and line workers belong to the same enterprise union, and supervisors often play a very active role in union affairs. New hires (other than managers) automatically become union members and pay dues to the enterprise union.

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Labor Relations in Other Countries 395

Union Federations and Employer Federations

Enterprise unions commonly are associated with industry union federations, which are, in turn, affi liated with union confederations. 8 Employers commonly belong to employer federations . Both union and employer federations provide advice and engage in political lobbying but do not become directly involved in enterprise- level collective bargaining.

Although industrial, craft, or general unions are rare in Japan, some important exceptions do exist. In addition, while most collective bargaining occurs at the enterprise level (between an enterprise union and the management of a fi rm), industry-level collective bargaining does occur in private railways, bus services, textiles, and some other cases.

The Lifetime Employment Principle

Japanese fi rms, particularly large ones, tend to hire new employees upon their graduation from school (high school graduation for blue-collar workers and university graduation for managers), and employees stay employed with that fi rm until they reach retirement age. This is lifetime employment. To avoid laying off “permanent” employees during business downturns, Japanese fi rms transfer workers across work areas and sometimes into training. If a large fi rm faces extreme fi nancial diffi culties, it might also shift some of its work force to other fi rms in its trading group. Trading groups are fi rms linked together through common owners or through close business connections. These employees are in effect loaned across companies and return to their original fi rm if it recovers.

The internal movement of permanent employees within and across fi rms is facilitated by the fact that workers receive extensive training and often rotate across jobs in a work area (or across work areas) during their work careers. This, like many of the other industrial relations practices in Japan, leads employees to strongly identify their personal interests with those of the company they work for.

Japanese fi rms can fulfi ll their promise to avoid laying off permanent employees because they also employ large numbers of workers on a part-time or temporary basis. These workers are not included in the lifetime employment system.

In addition, workers retire relatively early in Japanese fi rms. In the past, the average retirement age was 55; today it has risen to a mean of 64 in the face of declines in the number of new workers entering the Japanese work force.

Many employees who are promoted to supervisory and/or management positions were previously union members and some were union leaders. The movement between union and management careers can go both ways. When conducting an interview with a vice-president of the Honda Motor Workers Union a few years ago, one of the authors was surprised to discover that this person had at one point been a manager at Honda. After serving in a management personnel job, he decided to run for union offi ce. This practice is not uncommon in Japan. 9

Lifetime employment is not guaranteed through a clause in a contract or any other binding agreement between Japanese fi rms and their workers or unions. Rather, fi rms promise to try to avoid layoffs. Firms do lay off workers when they

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396 Part V. Special Topics

experience extreme fi nancial pressures, however. This informal arrangement is typical of Japanese industrial relations. Few of the distinguishing features of the Japanese system are the products of legal requirements or of formal contracts. Instead, Japanese practices are shaped heavily by norms and customs that have built up over the years.

The enterprise union system is typical of large fi rms in Japan; by some estimates, it covers one-third of the Japanese work force. This system is found to a lesser extent in small and medium-sized fi rms that often serve as suppliers or subcontractors to large fi rms. 10 In these smaller fi rms, wages are typically 15 to 30 percent lower and there is less employment security. There is also evidence that although the lifetime employment system has been declining in importance as workers have begun to move to other fi rms more frequently, Japan continues to exhibit distinctive employment security practices. 11

Pay Determination in Japan

Most pay agreements are set in annual negotiations that occur between a fi rm and an enterprise union. Many pay negotiations occur in the spring as part of the annual national spring wage offensive ( Shunt ō ). In this offensive, enterprise unions and managements consider the guidelines their respective union and employer associations have issued and give special attention to wage settlements reached in negotiations at a handful of key fi rms.

Workers typically are paid on a salary basis. They also commonly receive annual bonuses that are on the order of fi ve months’ salary, although the exact size of the annual bonus varies somewhat in response to the fi rm ’ s fi nancial performance and management ’ s assessment of the performance of individual workers.

Workers’ pay grades are heavily infl uenced by seniority with the fi rm. The combination of seniority-based pay and the lifetime employment system produces a pay system in which age plays a heavy role. Thus, workers who perform identical jobs can receive pay rates that vary signifi cantly as a function of their age and how their performance is evaluated.

Performance Appraisal

Another important feature of Japanese labor relations is frequent performance appraisals for blue-collar workers receive (many workers are assessed twice a year). In a given year, a worker who receives a top performance evaluation can receive up to a 10 percent larger pay increase than a worker who receives a poor per- formance appraisal. Over a worker ’ s career, these appraisal-based pay differences can add up and produce sizable differences in pay levels across employees. A worker ’ s promotion and career path is also heavily infl uenced by the cumulative effects of performance appraisals.

In the United States, in contrast, while many nonunion fi rms regularly appraise the performance of their employees, it is rare for blue-collar workers to undergo performance appraisals in traditional unionized settings.

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Labor Relations in Other Countries 397

Broad Job Defi nitions

Jobs in Japan tend to be defi ned relatively broadly on the shop fl oor, even for blue-collar workers. Broad job defi nitions go along with the practice of rotating workers across tasks and substantial training for the work force. In addition, the strong links between pay rates and the age and performance of each worker decrease the role of job task in determination of pay. Some analysts argue that the breadth of job defi nitions contributes signifi cantly to the fl exibility of the Japanese production system. 12

The Role of Consultation in Japanese Labor Relations

The labor relations system in Japan relies heavily on informal consultation between labor and management to settle disputes. Grievance and arbitration procedures are often included in enterprise-level collective bargaining agreements, but these procedures are rarely used. Instead, grievances are typically settled through consultation at the work shop level. In addition, consultation over broader issues commonly occurs in labor-management committees that operate at the plant and company level. Workers also have input into shop fl oor production issues through the quality circles that often meet regularly. 13

Union strength in these labor-management discussions is directly related to their membership and independence from management infl uence. One of the troubling issues confronting Japanese unions is declining membership. Union density in Japan stood at around 35 percent of the labor force from the early 1950s on through 1973. Since then, union membership (as a percentage of the work force) has fallen to 18 percent as of 2014. 14 Some analysts wonder if this decline is an inevitable product of enterprise unionism.

Debates continue about the extent to which enterprise unions are truly inde- pendent from management infl uence. This arises as an issue not only because of the enterprise nature of union structure but also because of the heavy role played by labor-management consultation in the Japanese system. Critics see in this consultation the co-optation of independent unionism, whereas others see an industrial relations system that successfully mediates confl ict as it provides gains in the form of high levels of employee commitment, economic growth, pay, and employment security.

LABOR RELATIONS IN TRANSITIONING COUNTRIES

The next sections briefl y review labor relations in four transitioning countries. Each of these countries has a large gross national product and developments in them well illustrate the issues that have been surfacing in other transitioning economies. Even though China, India, Brazil, and South Africa have achieved advanced levels of economic development and industrialization, their labor relations practices and procedures are more recent in origin and are in many ways in a state of fl ux.

We account for particular factors that play critical roles in these countries. For example, we take account of the fact that labor relations are much more political

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398 Part V. Special Topics

in transitional economies than they are in advanced industrialized countries. We also look at the past role of state-dominated unions in transitional economies and the recent increased importance of independent unions that have emerged as alternatives to state-dominated unions in many of these countries. These independent unions tend to promote collective bargaining at the company or workplace level.

A key issue that underpins labor, management, and government interactions in transitional economies is the fact that questions of how to create and sustain more democratic and stable labor relations are a major political and economic issues. While in some countries unions have been dominated by governments or sharply limited in their infl uence, history suggests that outlawing truly independent unions (i.e., unions free from the dominance of governments or employers) does not eliminate labor confl ict; rather, in some ways such a move only postpones and intensifi es it. In the end, all countries are forced to wrestle with how to structure labor relations in a way that provides workers with enough representation to satisfy them while also maintaining social stability and economic growth.

The informal sector is also much more prevalent in transitional economies. In the informal sector, where formal collective negotiations may be absent. Col- lective forms of representation and collective methods of confl ict resolution also are more varied in transitional economies, not only because they sometimes include works councils but also because concerns about labor rights have led to the involvement of various NGOs and other interest groups in workplace matters (see Chapter 14 ).

Brazil

The end of a military dictatorship and the enactment of a new constitution in 1988 ushered in the contemporary era in Brazilian employment relations. 15 The key change in Brazilian labor relations was that the state no longer signifi cantly intervened in the internal affairs of unions, as it had in the past.

Following the return to democracy after 1988, the new constitution of Brazil and the labor code gave private sector and public sector workers the right to form trade unions (except for members of the military, uniformed police, fi refi ghters, and some other state employees). Public sector workers could organize and strike (with certain limitations). Reform of the labor code gave job security to union leaders, reduced the maximum work week, increased overtime pay, and added profi t-sharing provisions to the human resource practices of companies. After the constitutional reforms, there was growth in the number of union members, most of whom were civil servants who had previously been prohibited from forming unions. This growth in membership was accompanied by dramatic growth in the number of unions, creating increasing fragmentation in the union movement.

However, core aspects of the traditional Brazilian labor relations system remained unchanged and continue to this day. These include a limit on union formation to one union per economic activity per territorial unit and a union tax that all workers in unionized economic or sectoral categories (e.g., metalworkers, chemical workers) must pay regardless of whether they are union members. A portion of this union tax is paid to union federations and confederations.

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Labor Relations in Other Countries 399

Trade unions in Brazil have maintained their membership strength over the last decades and have increased their political infl uence through the Workers’ Party. The rate of unionization has held steady at around 18–21 percent of the work force. Approximately twice this proportion of workers is covered by collective bargaining agreements. While the rate of unionization overall has remained steady, the rate of unionization in the manufacturing sector has been in decline. In contrast, public sector unionism has increased since the enactment of the 1988 constitution, which granted public sector employees unionization rights. However, the number of national trade union centers has increased, as has the number of small unions and unions that are outside the purview of the country ’ s main labor confederation. This has contributed to the fragmentation of the labor movement.

In addition to these general trends, the neoliberal reforms that began in the 1990s, notably privatization and the removal of obstacles to free trade, have transformed and weakened the Brazilian labor movement. Increased market liberalization and industrial restructuring have dramatically affected the geography of industrial production in Brazil. Many major new plants that were built in the 1990s and early 2000s were situated outside the core industrial district of greater São Paulo, in regions where unions were weaker and wages were lower.

China

China ’ s economic reforms, now in their fourth decade, have transformed the country from a planned economy to a mixed economy with elements of both market mechanisms and central planning. 16 While market mechanisms have become increasingly important in allocating resources, the state still plays a critical role in coordinating the economy, and its role has become even stronger since the 2008 global fi nancial crisis.

Market-oriented reforms have signifi cantly changed China ’ s employment structure. While agricultural employment has declined signifi cantly, employment in the industry and service sectors has sharply increased. Employment in state- owned enterprises has dropped from 60.4 percent of total formal employment in 1978 to 14.5 percent in 2010, whereas employment in the private sector, including private-owned companies, foreign-invested companies, and township and village companies, has rapidly increased. 17

Along with the change in the structure of employment, there has been a transformation of labor relations in China. Under the planned economy, the Chinese labor relations system was extremely rigid and centralized. In general, workers in state-owned enterprises and collective-owned enterprises enjoyed lifetime employment, egalitarian wages, and cradle-to-grave welfare that included free housing, medical benefi ts, and pensions. Over the last three decades, however, the so-called iron rice bowl has gradually been smashed. First, there has been a change from lifetime employment to contract-based employment. In addition, management has autonomy in making hiring and fi ring decisions, although legal procedures must be followed and there are still signifi cant limits on the ability of management to make large-scale dismissals in state-owned enterprises. Second, the state-administered reward system has been moving toward giving management

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400 Part V. Special Topics

full autonomy to make decisions about wages. Although the state still intends to infl uence wage levels and growth at the macroeconomic level and in state-owned enterprises, this infl uence has been declining. Third, contributory social insurance schemes such as pensions, medical insurance, unemployment insurance, work injury insurance, and maternity insurance and housing funds have been introduced to replace the former cradle-to-grave welfare system. However, these benefi t schemes have been introduced to varying degrees across sectors and regions and a huge number of workers—especially migrant workers—do not receive social benefi ts.

The All-China Federation of Trade Unions (ACFTU) is the only offi cial union in China. Its pyramidal top-down structure consists of three tiers: the national, regional, and primary levels. At the bottom level, primary unions are organized at the company level. Regional-level unions are set up along industrial lines and within geographical boundaries with a structure parallel to that of the government administration. Trade unions at all levels are under the leadership of the Communist Party. This structure has remained largely unchanged since the 1950s. The ACFTU represents the interests of both the state and labor. At the workplace, unions perform two functions: they promote production and deal with social welfare issues.

The Chinese system of resolving labor disputes is characterized by mediation, arbitration, and two trials. When a labor dispute arises, the parties may bring the case to the company ’ s labor dispute mediation committee. The second stage is arbitration, which is mandatory before the case can go before a court. If either party is dissatisfi ed with the arbitral award, they may enter the third stage and bring the case to a court. However, for certain types of cases (e.g., claims for small amounts of unpaid wages), the arbitral awards are fi nal and binding. If either party is dissatisfi ed with the court verdict, they may appeal to a higher court, whose verdict is fi nal.

India

India has long had an interventionist state. This is codifi ed in the key labor relations law in India, the Industrial Disputes Act of 1947. Under this law the state can prohibit even a legal strike and refer any industrial dispute to compulsory arbitration or adjudication without the consent of the employers or unions. However, following a balance-of-payment crisis in 1991, the government of India embarked upon economic reforms that shifted the focus in national economic policies from import substitution (replacing foreign imports with domestic produc- tion) to a focus on exports. 18 In the 1990s, the policies of liberalization, privatization, and globalization marked a new era for India, which since then has had an inward-looking socialist-style economy based on a strategy of import substitution. This shift in economic policies has been successful.

The trade union movement in India is highly fragmented. Until the 1980s, most trade unions in India were affi liated with a political party through a national federation.

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Labor Relations in Other Countries 401

There are about 400 million workers in the Indian labor market. Of these, only about 7 percent are employed in the formal sector. The remaining 93 percent are employed in agriculture or in small and medium-size enterprises in the informal sector of the economy. Historically, politically affi liated unions have shown little or no interest in organizing workers in the informal sector and have concentrated on organizing and representing workers in the formal sector in both the public and private sectors. In recent years, many workers in the informal sector or those employed as casual and contract workers in the formal sector have formed their own politically independent unions, sometimes with the help of NGOs. KKPKP is an example of such a union (see Chapter 14 ).

Of the total labor force of around 400 million, about 28 million Indian workers are employed in the public sector and are covered by various pay commissions that decide on their wage levels. The government-appointed commissions hear representations from employer associations and trade unions. Thus, negotiations over wages in the public sector in India takes place within the limits and terms set by the pay awards sanctioned by the pay commissions.

South Africa

The early history of labor relations in South Africa was heavily infl uenced by the apartheid system that kept blacks and those of mixed race politically disenfranchised and out of skilled and higher-paying jobs. 19 By 1994, however, the democratic union movement had established itself as a major force in the labor relations system in South Africa. COSATU, which had fi fteen affi liate unions in the mid-1990s, was by far the largest union confederation. Three other union con- federations represent a mix of white-collar unions, white unions, and craft unions and account for most of the remainder of trade union membership.

The Labor Relations Act of 1995 (LRA), sought to replace the adversarial culture that had characterized labor relations with codetermination between employers and employees. This law has fi ve key features. First, it brought all employees into a single system which created bargaining councils, where collective bargaining takes place. Critically, this enabled unions to have a say in work conditions across an entire industry, even covering employers with whom unions had no formal recognition agreement and/or in factories where a union had only a small presence. Importantly, the LRA extended the right to participate in bargain- ing councils to farm, domestic, and public employees, workers who had been excluded from the previous system of industrial councils.

Second, the LRA promoted collective bargaining by guaranteeing the right to organize to unions. It also gave unions access to employer premises, gave them the right to hold meetings, and allowed them to have closed shops (compulsory union membership agreements) under certain conditions. It also compelled employers to disclose information relevant to collective bargaining to unions that represent the majority of workers in a workplace. The law also protected the right of employees to strike, to picket, and to engage in sympathy strikes, although it also introduced compulsory procedures and timetables for dispute resolution.

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402 Part V. Special Topics

Management in South Africa increasingly favors decentralized bargaining. The growth of informal employment has also served to undermine various councils and contributed to decentralization in bargaining.

Events at the platinum mines in Marikana in 2012, when police opened fi re on striking miners, killing thirty-four and wounding seventy, well illustrate many of the tensions in the South African labor relations system. The unoffi cial strike at the Lonmin mine in Marikana involved some 3,000 workers. Workers had demanded a pay increase of up to 50 percent, well in excess of an existing agreement between COSATU ’ s National Union of Mineworkers (NUM) and Lonmin. This demand was refl ective of a far more general sense of worker discontent with wages and working conditions across the entire platinum mining belt.

Crucially, it appears that the NUM had lost the confi dence of its workers, who had repudiated the union representatives who had been sent to negotiate with them to return to work. The leadership of the Association of Mineworkers and Construction Union (AMCU), a breakaway union from the NUM that the employer did not recognize, stepped in and replaced the NUM offi cials as the workers’ representatives. The volatility of the situation, which was compounded by violence against those who wanted to work and against NUM offi cials, was ratcheted up by the initial refusal of the employer, the NUM, and the government to talk to AMCU, arguing that it lacked formal status.

Ultimately, however, in the aftermath of the shooting, the impasse gave way to concession. Eventually, six weeks after it had begun, the strike was brought to a close when Lonmin conceded a hefty 22 percent pay increase after negotiations that involved both the AMCU and the NUM. However, this failed to prevent labor unrest from spreading rapidly, and employers, unions, and the govern- ment scrambled to control strikes that were occurring across the entire mining sector.

These events in the platinum mining sector represent a major challenge to the South African labor relations system. First, they indicated the development of a yawning gap between miners and the leadership of the NUM. Workers accused NUM offi cials were accused of living comfortably while union members suffered. Second, they exposed an increasing gap between workers and the African National Congress. Workers accuse ANC leaders accused of siding with management and not attending to the needs of their core constituency. Third, they raised major questions about the role of the police, who were widely accused of reverting to apartheid-style reliance upon brute violence on behalf of the state. Finally, they posed serious problems for employers, who were ambivalent about the outcome of the strike.

THE IMPORTANCE OF THE PUBLIC SECTOR

The public sector in many advanced and transitional economies typically accounts for a signifi cant share of the formal sector. In addition, public sector employees in these economies often are represented by unions. Public sector employers also generally follow the bureaucratic employment pattern (described in Chapter 5 ),

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Labor Relations in Other Countries 403

which is characterized by formal rules, structured pay and complaint procedures, and a relatively high degree of employment security.

However, since 2007 there has been a signifi cant amount of privatization or “de-nationalization” that has shifted formerly public (i.e., “state”) enterprises into the private sector or at least made those enterprises semi-private. This has led to signifi cant changes in employment practices that include signifi cant downsizing and the introduction of more market- and individualistic-type practices such as pay for performance. Workers who have jobs that were previously in the public sector have faced the insecurities more typical of the private sector. And since 2007, especially in transitional economies, public employees have faced or been threatened with even more drastic erosions of their wages, pensions, and other benefi ts and a further lessening of job security as part of structural adjustment policies.

AUSTERITY CRISES AND THEIR IMPACT ON LABOR RIGHTS AND CONDITIONS

A number of transitional economies have faced an economic crisis since 2007. In some instances such a crisis occurs at the time of a more widespread fi nancial crisis across a region or even across the entire globe. These crises typically are precipitated when a country is unable to pay back loans from international agencies and external private banks and as a result, the country teeters on the brink of bankruptcy. In addition, in a number of countries, the unemployment rate and food prices rose sharply after 2007. International fi nancial agencies such as the International Monetary Fund and the World Bank then become involved in the crisis by tying new loans to austerity measures that typically include large cutbacks in government spending, increases in taxes, wage cuts, and privatization of state- owned enterprises. These and other reforms that international fi nancial agencies insist upon as a condition for making new loans to a country experiencing economic crisis are referred to as structural adjustment.

Structural adjustment reforms they critically affect economic conditions; have severe consequences for the population, especially public employees, and have wider economic and social consequences. There are deep debates about structural adjustment, including about what caused the particular economic and fi nancial crisis in the fi rst place, whether the austerity measures the international fi nancial agencies insist upon are effective or self-defeating, and whether it is fair or appropriate that public employees bear a heavy burden as part of a structural adjustment plan.

The Recent Austerity Crisis in Greece and Its Consequences for Labor Relations

After the 2008 global fi nancial crisis, Greece was nearing bankruptcy and economic collapse. The so-called troika—the International Monetary Fund, the European Central Bank, and the European Commission—imposed harsh conditions of austerity on Greece as a condition of a bailout from the European Union. Among

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404 Part V. Special Topics

other measures, these demands included a restructuring of Greece ’ s labor relations system.

Since the early 1990s, the Greek labor relations system had operated as a top-down hierarchy of collective bargaining. At the top level, national labor and employer groups, aided by the government, bargained for a national agreement that set a minimum wage fl oor and other basic standards for employment. At the next level were many multiemployer industrial agreements. The government reserved the right to extend coverage of these agreements to employers as it deemed appropriate. Thus, in addition to the national agreement, about 65 percent of workers were covered under multiemployer collective bargaining agreements. At the next level, individual employers could bargain with union organizations to build upon the national negotiations. The system was hierarchical because collective bargaining at any level could build upon a deal established at a higher level but could not legally set a wage below the fl oor set by an agreement at a higher tier.

The troika determined that a lack of competitiveness was the underlying issue causing Greek ’ s economic crisis. It pressured the Greek government to restructure the labor relations regime. From 2010 to 2012, Greece passed several laws that restricted collective bargaining rights. Instead of being determined by the national collective bargaining agreement, the national minimum wage is now set by law. The national agreement also no longer covers employers who are not members of the employer associations involved in the negotiations. Nonunion employee groups, or “associations of persons,” can now enter into agreements with employers.

Clearly, these changes have signifi cantly weakened the bargaining power of unions in the country. Allowing employers to opt out of the national- and industrial-level agreements and enabling them to negotiate with smaller “associations of persons” rapidly decentralized the once highly centralized labor relations system. In just three years, the number of industry-level negotiations fell from 65 to 14. The result of this decentralization, unsurprisingly, has been a reduction in wages. The national minimum wage, which is now set by the legislature rather than by a collective bargaining agreement, has been cut by 22 percent (32 percent for those under 25 years old). 20

Protests and Strikes over Austerity in Greece

Unions and citizens have engaged in protests and strikes (including a general strike) against the Greek austerity plans to no avail. Their protests were strengthened by accusations that bond holders and other creditors did not absorb much of a penalty as a result of the austerity plans and that instead, Greek citizens and public employees bore the bulk of the costs the austerity plans imposed.

The severity of the economic decline that followed the austerity plans imposed in Greece added evidence to support arguments that the austerity measures were not only too extreme, they were actually self-defeating. Opponents of the austerity plan proposed a renegotiation of bond holdings (essentially a managed default) that would make banks that had fueled the speculative boom that preceded (and

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Labor Relations in Other Countries 405

possibly caused) Greece ’ s fi nancial crisis responsible for more of the cost of the adjustment process.

THE CONTRIBUTION OF LABOR RELATIONS TO ECONOMIC PERFORMANCE IN COMPARATIVE PERSPECTIVE

There are long-standing debates about whether any economic system outperforms other systems and about what contribution labor relations makes to economic performance. These debates ebb and fl ow with the ups and downs of the economic fortunes of various countries. In the 1980s, refl ecting Japan ’ s strong economic and export growth, some analysts heralded the Japanese economic system. Others claimed that the Japanese labor relations system played a key role in Japan ’ s economic success by stimulating employee loyalty and problem solving. The German economic and labor relations system also received much praise in the 1980s, on the grounds that the codetermination system facilitated confl ict resolution and the development of skills.

In the 1990s, this debate shifted in response to strong economic performance, particularly price stability and employment growth, in the United States. The U.S. economic system then began to receive praise for its fl exibility and promotion of entrepreneurialism. As the unemployment rate dropped to historic lows in the late 1990s, some analysts claimed that traditional internal labor markets had been replaced by “boundaryless” careers (i.e., frequent job changes). 21 In addition, the tightening of labor markets led to accelerated wage growth, particularly among highly skilled employees such as software programmers and high-tech engineers.

This debate shifted once again in recent years, given the relatively weak economic recovery from the 2008–2009 fi nancial crisis that occurred in Europe, especially when compared to the U.S. recovery. Once again arguments are being made that a U.S.-style market system is superior to other systems. However, the increased income inequality that has emerged in the United States has led others to question the virtues of the U.S. economic and labor relations systems.

Summary

Around the world, there are substantial differences in the way labor relations are practiced. In the United States, collective bargaining is relatively decentralized and written collective bargaining agreements play a central role. The U.S. collective bargaining system is also noteworthy for its heavy reliance on grievance and arbitration procedures.

In Germany, by contrast, codetermination procedures are central. Both unions and works councils provide representation for employees. Collective bargaining in Germany usually occurs on a regional or industry basis and produces annual labor agreements.

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406 Part V. Special Topics

In Japan, enterprise unions are dominant. These unions represent both blue- and white-collar employees in a fi rm. Disputes tend to be settled and information exchanged through a variety of consultative procedures. Worker seniority and the economic performance of the fi rm infl uence worker earnings, and annual bonuses are an important share of worker compensation.

The labor relations systems in transitional countries have some common features such as a large role for the informal sector and labor movements that often have strong ties to political parties. However, there are distinctive features in the systems of each transitional country, such as the traditional heavy reliance on an “iron rice bowl mentality” in China and the legacy of apartheid in South Africa.

However, there are some common trends in transitional countries. In most of the countries mentioned in this chapter, there is movement toward more decentral- ized collective bargaining and ominous declines in the strength of the labor movement.

Interest in international comparisons of management and labor practices is currently at an all-time high, spurred in part by the expansion of multinational fi rms and regional trading blocs. The process of collective bargaining and the determinants of bargaining power do not change fundamentally as a fi rm becomes multinational. However, the bargaining leverage of unions is generally weakened as fi rms expand production across country borders. It remains to be seen how well high-wage countries will be able to protect their high employment standards in the face of heightened international trade.

All countries must wrestle with the issue of how to structure labor relations. While collective bargaining and unions fl ourished in the past, the pressures of globalization are raising questions about the future viability of these institutions. However, countries that lack stable labor relations due to government suppression of a country ’ s labor movement must face the fact that free and independent labor movements have been central to the development of democracy throughout history.

Discussion Questions

1. Briefl y describe how codetermination works in Germany. 2. Describe three signifi cant ways industrial relations in Japan differ from labor

relations in the United States. 3. What role did unions play in the end of apartheid in South Africa? What

are the public policy implications of the links between unions and democ- ratization in both transitioning and fully industrialized countries?

4. What conclusions do you draw regarding whether labor relations practices and system features infl uence a country ’ s overall economic performance?

Related Web Sites

ILO Legal Database on Industrial Relations (ILRlex): http://www.ilo.org/global/docs/WCMS_507552/lang–en/index.htm

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Labor Relations in Other Countries 407

ACFTU organizational structure: http://en.acftu.org/28590/201408/11/140811135244209.shtml

German Trade Union Confederation (DGB): http://en.dgb.de

Suggested Supplemental Readings

Anner , Mark . Solidarity Transformed: Labor ’ s Responses to Globalization and Crisis in Latin America . Ithaca, N.Y. : ILR Press , 2011 .

Bamber , Greg J. , Russell D. Lansbury , Nick Wailes , and Chris F. Wright , eds . International & Comparative Employment Relations: National Regulation, Global Changes . 6th ed . Los Angeles : Sage , 2016 .

Frege , Carola , and John Kelly eds ., Comparative Employment Relations in the Global Economy . New York : Routledge , 2013 .

Katz , Harry C. , Thomas A. Kochan , and Alexander J. S. Colvin . Labor Relations in a Globalizing World . Ithaca, N.Y. : ILR Press , 2015 .

Notes

1. Throughout this chapter, we refer to Germany, even though some of the history recounted refers to the history of West Germany. After the unifi cation of Germany, the national laws of West Germany were extended to what was previously East Germany, including laws about industrial relations. Unifi cation brought substantial changes to labor relations practices and institutions in what was formerly East Germany.

2. Discussion of the various labor laws that exist in transitioning countries is found in Harry C. Katz, Thomas A. Kochan, and Alexander J. S. Colvin, Labor Relations in a Globalizing World (Ithaca, N.Y.: ILR Press, 2015): Chapter 3 .

3. This section draws heavily from Berndt Keller and Anja Kirsch, “Industrial Relations in Germany,” in International & Comparative Employment Relations: National Regulation, Global Changes , 6th ed., ed. Greg Bamber, Russell D. Lansbury, Nick Wailes, and Chris F. Wright (Los Angeles: Sage, 2015), 179–207.

4. Greg J. Bamber, Russell D. Lansbury, Nick Wailes, and Chris Wright report on union membership as a proportion of the work force and collective bargaining coverage in a number of countries in Figure 1.1 , “Comparative Union Density and Collective Bargaining Coverage,” in “Introduction,” in International & Comparative Employment Relations: National Regulation, Global Changes , 6th ed., ed. Greg Bamber, Russell D. Lansbury, Nick Wailes, and Chris F. Wright (Los Angeles: Sage, 2015), 7.

5. The DGB had seventeen eight affi liated unions with 6 million members in 2011. See DGB: German Trade Union Confederation, http://en.dgb.de .

6. The Confederation of German Employers’ Associations (BDA) is the employer counterpart to the DGB. It includes forty-six branch employer federations that engage in collective bargaining. One important exception is the negotiation of a companywide collective bargaining agreement at Volkswagen. This is because of the special fi nancial and legal status of Volkswagen.

7. Enterprise unions are 94.9 percent of all trade unions in Japan and represent 85.6 percent of organized employees.

8. In 1982, labor federations in the private sector joined together to form Zenminrokyo (the Japanese Private Sector Trade Union Council). In 1989, most private and public sector unions became affi liated with the new Rengo (Japanese Trade Union Confederation). See Labor-Management Relations in Japan (Tokyo: Japan Institute of Labor, 1990), 19, Figure 2.

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408 Part V. Special Topics

9. It remains to be seen if this sort of career movement continues in the future. It may not, due to the professionalization of managerial training and career development.

10. The modern-day extension of the traditional zaibatsu system often links large and small fi rms in close business relations. For example, upon their retirement from the large “parent” fi rm, senior executives often move on to serve as executives of one of the smaller fi rms in the same group.

11. Sanford M. Jacoby, The Embedded Corporation: Governance and Employment Relations in Japan and the United States (Princeton, N.J.: Princeton University Press, 2007).

12. See Michael J. Piore and Charles F. Sabel, The Second Industrial Divide (New York: Basic Books, 1984).

13. An informative account of life on the shop fl oor in Japan is provided in Robert E. Cole, Japanese Blue Collar (Berkeley: University of California Press, 1971).

14. “Trade Union Density,” OECD.Stat, https://stats.oecd.org/Index.aspx?DataSetCode = UN_DEN . 15. This section draws heavily from Mark Anner and João Paulo Cândia Veiga, “Brazil,” in

Comparative Employment Relations in the Global Economy , ed. Carola Frege and John Kelley (New York: Routledge, 2013).

16. This section draws heavily from Mingwei Liu, “China,” in Comparative Employment Relations in the Global Economy , ed. Carola Frege and John Kelley (New York: Routledge, 2013), 324–347.

17. Ibid. 18. This section draws heavily from Vidu Badigannavar, “India,” in Comparative Employment

Relations in the Global Economy , ed. Carola Frege and John Kelley (New York: Routledge, 2013), 305–323.

19. This section draws heavily from Roger Southall, “South Africa,” in Comparative Employment Relations in the Global Economy , ed. Carola Frege and John Kelley (New York: Routledge, 2013), 348–366.

20. “Workplace Representation,” worker-participation.eu: A Service of the European Trade Union Institute , 2015, http://www.worker-participation.eu/National-Industrial-Relations/Across-Europe/ Workplace-Representation2 .

21. Anda Stamati, “Greece: Impact of the Crisis on Industrial Relations,” EuroFound: European Foundation for the Improvement of Living and Working Conditions , June 17, 2013, http:// www.eurofound.europa.eu/observatories/eurwork/comparative-information/national-contributions/ greece/greece-impact-of-the-crisis-on-industrial-relations .

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