Week 4 Discussion Labor relations
francisgon44
IPPT_Ch12_Budd6e.pptxChapter 12
Comparative Labor Relations
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Learning Objectives
Compare the basic features of labor relations systems in the major industrialized, democratic countries around the world.
Identify the basic features of labor relations systems in the transitional and less developed economies of eastern Europe and Asia.
Understand various options in labor relations systems for reacting to the pressures of globalization, decentralization, and flexibility while trying to balance efficiency, equity, and voice.
Analyze the extent to which the labor relations experiences of other countries can provide ideas and lessons for reforming the United States labor relations system.
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Introduction 1
Comparative labor relations is the study of labor relations systems in different countries
A comparative perspective is important for three reasons
Analytical reason: considering labor relations in multiple countries provides a rich basis for thinking broadly about the underlying problem of balancing efficiency, equity, and voice and for obtaining a stronger understanding of the primary issues in labor relations.
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Introduction 2
Public policy reason: comparative analyses of labor relations can provide ideas for reforming the United States system.
Practical reason: if you work for an organization that does business in another country or for a labor union that has strategic alliances with labor unions in another country, it is important to understand that country’s approach.
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Labor Relations around the Globe: Union Membership Does Not Equal Contract Coverage
Table divided into three columns summarizes the labor relationships in different countries. Column 1 notes a list of country names, column 2 and 3 notes the percentages of bargaining coverage and union density respectively.
| Country | Bargaining Coverage (Percentage) | Union Density (Percentage) |
| Korea | 12 | 10 |
| United States | 12 | 11 |
| Japan | 15 plus | 18 |
| Canada | 29 | 29 |
| U.K. | 30 | 25 |
| South Africa | 33 | 30 |
| Czech Republic | 47 | 13 |
| Germany | 58 | 18 |
| Australia | 60 | 17 |
| Brazil | 60 | 25 |
| Spain | 70 | 17 |
| Sweden | 90 | 68 |
| France | 90 plus | 8 |
| Finland | 90 plus | 69 |
| Belgium | 95 | 55 |
| Austria | 95 plus | 27 |
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Common Dimensions of Industrialized Labor Relations Systems 1
Table divided into three columns summarizes the common dimensions of industrialized labor relations systems. The column headers are: Centralized dimension; traditional features; and examples.
| Centralized Dimension | Traditional Features | Examples |
| Social partnership | Peak-level labor, business, and government agreements on broad economic and social issues. | Austria, Finland, Ireland (1987 to 2009), Sweden |
| Sector bargaining | Collective bargaining with employers’ associations to produce industrywide contracts. | France, Germany, Sweden |
| Centralized awards | Occupational or industrial arbitration awards. | Australia, New Zealand (pre-1991) |
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Common Dimensions of Industrialized Labor Relations Systems 2
Table divided into three columns summarizes common dimensions of industrialized labor relations systems. The column headers are: Decentralized dimension; traditional features; and examples.
| Decentralized Dimension | Traditional Features | Examples |
| Enterprise unionism | Unions limited to one company. | Japan |
| Exclusive representation or majority rule | Representation and bargaining only if a union represents a majority of the employees. | Canada, United States |
| Codetermination | Workplace-level shared decision making including works councils and board-level representation. | France, Germany, Sweden |
| Voluntarism | Representation and bargaining based on economic power, not legal backing. | Great Britain, Ireland, New Zealand (1991 to 2000) |
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United States 1
Union Density - 11 percent and (maybe?) stable
Bargaining Structure - Decentralized
Key Features
Exclusive Representation.
Business Unionism.
Very formal, legalistic, enforceable contracts resulting from formalized negotiations.
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United States 2
Public policy is very interventionist in terms of labor relations processes (certification, bargaining, dispute resolution, etcetera).
One example of an attempt to balance the rights of labor and capital, and balance efficiency, equity, and voice…but there are alternatives...
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Canada 1
Union Density - 30 percent and stable
Bargaining Structure - Decentralized
Key Features
Exclusive Representation.
More Social Unionism.
Law is decentralized relative to United States.
Wagner Act model but with key modifications (certification procedures, strike replacement restrictions).
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Canada 2
Canada has a labor relations structure very similar to the United States (indeed, many of the same companies and unions), but with small differences that matter).
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Small Differences That Matter?
Table divided into three columns summarizes the small differences between U.S. and Canadian Labor Law. The column headers are: Topic; United States; and Canada.
| Topic | United States | Canada |
| Legal jurisdiction | Centralized: private sector governed by federal law. | Decentralized: governed by provincial laws. |
| Union certification | NRLR election procedure. | Some provinces allow card check certification or instant elections. |
| First contract arbitration | No. | Provided in some provinces. |
| Decertification elections | Strike replacements can vote; permanently replaced strikers can only vote for 12 months. | Some provinces exclude replacement workers from voting or prohibit decertification petitions during a strike. |
| Nonunion representation | Illegal. | Legal in absence of company domination and organizing interference. |
| Union security | Right-to-work laws in many states ban union and agency shops. | No right-to-work laws. Unions are guaranteed at least an agency shop in many provinces. |
| Strike replacements | Except in ULP strikes, permanent and temporary replacements are allowed. | Most provinces ban the use of permanent replacements. Two ban all replacements. |
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Mexico 1
Union Density: 15 percent
Bargaining Structure
Government control with “negotiations” as part of national development strategies as dictated by political leaders.
Key Features
Appearance versus Reality: Constitution grants the right to form unions, strike, etc. (much stronger protections than in the United States), but unions have been weak, undemocratic, and tightly controlled (labor leaders more loyal to the state than the workers).
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Mexico 2
Representative of other developing countries: labor relations controlled by the state; tension as independent labor movements emerge and international competitive pressures intensify.
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United Kingdom 1
Union Density - 25 percent and falling; coverage is 50 percent
Bargaining Structure - Varied: fragmented unions but industry or wage councils
Key Features
Traditionally, minimal govt intervention (bargaining is voluntary, agreements not legally enforceable), though recent trend towards regulation of unions (mandating secret votes, closed shops, etcetera).
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United Kingdom 2
Recent trend toward greater formalization of workplace practices (rather than informal understandings and wildcat strikes).
Unions have traditionally had close ties with the Labour Party.
Illustrates drawbacks of a voluntary system?
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United Kingdom 3
Illustrates the concept of voluntarism
Voluntary - In the absence of legal force, labor and management use their economic power, not legal rights, to get the other side to do something, especially to bargain a contract (so can be adversarial and turbulent).
Though the system isn’t completely voluntaristic
For example, Employment Relations Act (1999) - provides for statutory recognition of a union under specified majority demonstration provisions.
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United Kingdom 4
Balance among efficiency, equity, and voice in a voluntaristic system depends on:
Markets and the economic leverage of the two parties.
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Ireland 1
Union Density - 30 percent and falling
Bargaining Structure - Voluntarist plus corporatist
Key Features
At its base, a voluntarist system similar to the U.K. But between 1987 and 2009, also had notable macro-level corporatism: a social partnership of labor, business, and the government that resulted in a series of peak-level agreements on social and economic issues. Involved centralized bargaining establishing pay guidelines for the Irish economy. But far-ranging economic and social issues were also addressed (for example, housing, education).
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Ireland 2
Illustrates the benefits of macro-level social partnerships? But how to achieve workplace flexibility and voice?
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Ireland 3
Social partners:
The major union federation - The Irish Congress of Trade Unions (I C T U).
The Irish Business and Employers’ Confederation (I B E C) representing employers.
Government (third pillar).
In the 1990s, a fourth pillar of community groups:
For example, Irish Farmers Association, the Irish National Organization of the Unemployed, and the Conference of Religious of Ireland.
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Some Irish Social Partnership Agreements 1
The Programme for National Recovery (P N R), 1987 to 1990
Objectives: Creation of a fiscal and monetary climate that is conducive to economic growth and a reduction in government debt.
Provisions: Changes in the tax system, increased employment opportunities, and private sector pay guidelines (a six-month pay freeze followed by 2.5 percent annual increases).
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Some Irish Social Partnership Agreements 2
The Programme for Competitiveness and Work (P C W), 1994 to 1997
Objectives: Pay stability and creation of a climate for growth (similar to the P N R).
Provisions: Primarily pay guidelines, but also employment and training programs and tax reform.
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Some Irish Social Partnership Agreements 3
Towards 2016, 2006 to 2015 (abandoned 2009)
Objectives: Fulfill a longer-term vision for Ireland that links social policy and economic prosperity, develops a vibrant knowledge-based economy, increases the integration of the island of Ireland, and successfully handles diversity.
Provisions: Pay guidelines, increased penalties for employment law violators, social welfare payments linked to average wage level, increased provision of affordable housing, child care, and health care, infrastructure spending targets, greater investments in education.
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France 1
Union Density
Less than 10 percent, but 90 percent coverage.
Bargaining Structure - Sectoral
Key Features
Complex mixture of militant, often politically-oriented unions but weak collective bargaining. Very low union membership but very high contract coverage by industry-level agreements. Several mechanisms for workplace-level representation. Multiple central federations, each with a distinctive orientation.
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France 2
Ideologically-based political mobilization and strikes often more important than collective bargaining (“mass and class unionism” because of the emphasis in using class struggle ideology to create large-scale protests).
Representative of ideological unionism in southern Europe.
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French Union Confederations 1
Table divided into two columns summarizes the industrial unions of French union confederations. Column 1 notes membership and column 2 notes national representation elections.
| Industrial Unions | Membership | National Representation Elections |
| Confédération générale du travail (C G T), General Confederation of Labor Traditionally communist though moving away from Marxist orthodoxy. | 710,000 | 24.3 percent |
| Confédération française democratique du travail (C F D T), French Democratic Confederation of Labor Radical support of worker control in 1960s, but recently a more moderate focus on union adaptation to economic change. | 875,000 | 24.0 |
| Force ouvriére (F O), Workers’ Strength Anti-communist and militant. | 300,000 | 16.6 |
| Confédération française des travailleurs chrétiens (C F T C), French Confederation of Christian Workers Christian orientation, anti–class struggle, pro–collective bargaining. | 160,000 | 7.4 |
| Solidaires Unitaires Démocratiques (S U D)– Solidarity, Unity, Democracy Militant, left-wing, and anti-globalization orientation. | 100,000 | 4.6 |
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French Union Confederations 2
Table divided into three columns summarizes the occupational unions of French union confederations. Column 1 notes occupational unions, column 2 notes the membership, and column 3 notes national representation elections.
| Occupational Unions | Membership | National Representation Elections |
| Union nationale des syndicats autonomes (U S N A), National Federation of Independent Unions Mostly public sector workers, especially teachers. | 200,000 | 7.0 |
| Confédération française de l’encadrement–Confédération générale des cadres (C F E–C G C), French Confederation of Professional and Managerial Staff–General Confederation of Managerial Staffs Focus on economic issues for engineers, technicians, supervisors, sales representatives, and others. | 140,000 | 8.0 |
| Fédération syndicale unitaire (F S U), Unitary Union Federation Primarily teachers with more of a left-wing orientation than those affiliated with the U S N A. | 162,000 | 2.7 |
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France 3
Bargaining takes place on two levels –industry and company
The industry agreements provide the broad parameters and minimum standards for individual companies to follow regarding working time, pay, and other issues.
Company-level agreements implement specific pay and working conditions provisions, and reforms in 2017 made it easier for companies to negotiate weaker terms than the industry standards.
French law mandates company-level bargaining regardless of whether a majority of employees authorize a single union as their representative.
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France 4
French law provides for workplace-level employee representation separate from labor unions for workplaces with at least 50 employees. Changes in 2017 consolidated multiple bodies with different responsibilities into a single Social and Economic Council that handles grievances and health and safety, and is entitled to information and consultation on workplace and companywide decisions.
But political strikes of “mass and class unionism” often more important than collective bargaining
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Germany 1
Union Density
20 percent and falling; coverage is 55 percent.
Bargaining Structure
Centralized: industrywide bargaining between national unions and employer associations (regional or national).
Agreements can be extended to all employers in the industry.
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Germany 2
Key Features
Codetermination.
Works Councils.
Government can intervene, but isn’t typically necessary.
High degree of government-mandated benefits and protections.
Generally representative of northern European countries, but is the system flexible enough for the 21st century?
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Germany 3
Sector bargaining - Industry-wide bargaining that produces a contract for the entire sector
Each major industry or sector has a dominant employer association and union.
These two bodies engage in sector bargaining.
Contract establishes minimum labor standards that apply to all members of the employers’ association
The number of union members at each company is unimportant.
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Germany 4
To promote a level playing field and “take wages out of competition,” an agreement can be legally extended by the government to cover other companies.
This is true in a majority of European countries.
Centralized collective bargaining in Germany is complemented in the workplace by codetermination
Codetermination: An institutionalized system of employee voice in which employees are entitled to participate in workplace decision making.
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Germany 5
German codetermination has two components:
Employee representation on corporate supervisory boards.
Works council: A workplace-level committee of employees elected to represent all the workers (except senior executives) in dealings with management.
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Germany 6
German works councils have codetermination, consultation, and information rights regarding various workplace issues
Codetermination rights: a company must jointly determine with the works council issues pertaining to work rules and discipline, daily working hours, leave schedules, overtime, performance-based pay and bonuses, safety and health, etcetera.
Negotiated agreements on codetermined issues are incorporated into works agreements.
Consultation rights, the works council must be consulted before an employer changes the nature of its work.
Information rights: the works council must be given financial information about the firm’s balance sheet, investment and marketing plans, and other corporate intentions.
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Germany 7
German works councils have codetermination, consultation, and information rights regarding various workplace issues
Industrywide collective bargaining agreements specify minimum standards and other broad parameters for the workplace.
Works councils are left to work out specific details, especially pertaining to implementation issues, for each workplace.
Are legally distinct from unions.
Their existence does not depend on a local union presence.
Works councils are viewed as supportive of workplace changes and the implementation of new processes and technologies.
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Central and Eastern Europe 1
After World War II labor relations in the Soviet Union and the communist countries of eastern Europe were characterized by Stalinist unionism
Unions were a critical part of the Communist economic and political system, primarily to transmit the Communist Party’s agenda to the working class.
Unions as the “transmission belt” of the Communist Party.
Unions administered the government’s various social benefits (housing and recreational programs).
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Central and Eastern Europe 2
In 1991 the Soviet Union dissolved into Russia and a number of independent states
Triggered by the solidarity movement in Poland.
Power of collective action.
Need for independent labor movements in society.
Collective bargaining, economic strikes, and independent labor unions have been legalized in eastern Europe
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Central and Eastern Europe 3
The Stalinist model left behind a legacy of:
Weak unions at the enterprise.
Workplace levels with no experience in collective bargaining and with little rank-and-file involvement.
Membership in the EU and the Global Financial Crisis created further challenges for unions in these countries
Workplace representation, collective bargaining, and social dialogue are weak across most of central and eastern Europe, though there are pockets of innovation.
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Australia 1
Union Density
15 percent and falling, but coverage of awards is higher.
Bargaining Structure
Mixed: (weakening) centralized system of arbitration awards for pay combined with decentralized negotiations.
Key Features
Unions organized primarily by craft or occupation (multiple unions common for single employer).
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Australia 2
Strikes are legally restricted, but labor relations often characterized as adversarial and conflictual.
Is decentralization and deregulation the answer to international competitive pressures?
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Australia and New Zealand 1
Australia or N Z were traditionally organized mostly on a craft or occupational basis
Unions typically had members in more than one industry.
Managers often had to deal with multiple unions.
Distinctive traditional feature of labor relations in Australia or N Z
A centralized system of arbitration awards.
Awards system: A federal or state arbitration commission issues an award that specifies the minimum standards for pay and working conditions for an occupation.
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Australia and New Zealand 2
Both Australia and NZ have weakened this in recent years to gain more flexibility, but fights over excessive weakening.
Changes have been more drastic in New Zealand.
The Employment Relations Act of 2000 moved New Zealand industrial relations away from a pure voluntarism system. Individual employment contracts are still allowed, but employers have an obligation to bargain in good faith with a union if a group of employees requests it. It is also illegal for employers to pressure or discriminate against employees in order to encourage or discourage union membership.
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Japan 1
Union Density
15 percent and falling.
Bargaining Structure
Decentralized, ex. Shunto.
Key Features
Enterprise Unionism: relationships generally characterized as cooperative (but also a few women-only unions).
Extensive information sharing between firms and employees.
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Japan 2
Informal resolution of grievances (importance of maintaining a sense of community).
Shunto (spring labor offensive): wages only; other issues settled by consultation.
A model for the 21st century? Or the domination of labor?
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Japan 3
Enterprise union
The primary institutional feature of Japanese labor relations.
Represents only workers in a single company (enterprise).
Embedded in a broader HRM system structured around:
Lifetime employment.
Seniority and firm-based wages.
Broad job classifications.
Enterprise unionism fits well with this strong enterprise identification among employees.
Japanese labor relations are often characterized as cooperative or consensual (or as “weak” by critics).
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Asian Developing Countries 1
Earlier policies emphasized industrial peace to promote industrial development (just as in the United States)
Contemporary policies focus on achieving global competitiveness through flexibility.
Same pressure as in United States, but some authoritative political regimes are more interventionist.
The government frequently exercises tighter control over unions and labor relations than in developed countries.
Across Asia, different approaches in designing specific labor systems, but all have similar objectives (see above)
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Asian Developing Countries 2
The types of systems found in Asia
A high-level tripartite or corporatist model.
Singapore, recall Ireland.
A pluralist model with varying combinations of political representation and collective bargaining.
Philippines and India, recall Germany, France, Canada, and the United States.
Government control model.
Malaysia and Indonesia, recall Mexico.
Systems that were (South Korean) or are (China, Vietnam in flux).
Recall central and eastern Europe.
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China 1
Union Density - Estimates vary
Bargaining Structure - Bargaining not a central feature
Key Features
Appearance versus Reality: Strong pro-worker legislation, but unions have been weak, undemocratic, and tightly controlled (labor unions as a transmission belt of the Communist Party).
One legal union federation: All-China Federation of Trade Unions (ACFTU), still an arm of the state? What role for independent unions?
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China 2
Increased labor conflict as pressures for economic development clash with workers’ desires. Struggles with balancing efficiency, equity, and voice in a dynamic, emerging economy.
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Common Dimensions of Industrialized Labor Relations Systems 3
Table divided into three columns summarizes the possibilities for structuring labor relations. The column headers are: Centralized dimension; features; and examples.
| Centralized Dimension | Features | Examples |
| Social partnership | Peak-level labor, business, and government agreements on broad economic and social issues. | Austria, Finland, Ireland (1987 to 2009), Sweden |
| Sector bargaining | Collective bargaining with employers’ associations to produce industrywide contracts. | France, Germany, Sweden |
| Centralized awards | Occupational or industrial arbitration awards. | Australia, New Zealand (pre-1991) |
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Common Dimensions of Industrialized Labor Relations Systems 4
Table divided into three columns summarizes the possibilities for structuring labor relations. The column headers are: Decentralized dimension; features; and examples.
| Decentralized Dimension | Features | Examples |
| Enterprise unionism | Unions limited to one company. | Japan |
| Exclusive representation or majority rule | Representation and bargaining only if a union represents a majority of the employees. | Canada, United States |
| Codetermination | Workplace-level shared decision making including works councils and board-level representation. | France, Germany, Sweden |
| Voluntarism | Representation and bargaining based on economic power, not legal backing. | Great Britain, Ireland, New Zealand (1991 to 2000) |
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Bargaining versus Legislation 1
Labor’s political strength and norms more favorable to workers can result in labor standards that are legislated for all workers rather than confined to workers covered by collective bargaining
Outside the United States, many employment conditions, especially employee benefits, are established by government regulations.
Universal health systems.
Many European countries mandate at least four weeks of paid vacation each year.
Widespread unjust dismissal protections.
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Bargaining versus Legislation 2
An important question for the future: should labor standards be negotiated or legislated (or neither)?
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Employees Covered by Unjust Dismissal Protections
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Globalization Reconsidered 1
Convergence thesis: Predicts that labor relations practices and policies across countries will converge to a common set of practices and policies (because of globalization)
National differences will disappear.
But the evidence is not supportive of labor relations convergence
The most important effects of globalization on labor relations across many countries are declining union strength and intense corporate pressures for increased workplace flexibility.
These factors have caused increased decentralization of labor relations activities in many countries.
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Globalization Reconsidered 2
Increasing decentralization gives rise to divergent local labor relations practices.
But still makes sense to discuss national labor relations systems
Laws and institutions that characterize the labor relations systems of different countries shape the choices faced by companies and unions as they confront competitive pressures.
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Globalization Reconsidered 3
Labor relations around the world:
A multilevel system of governance with important institutions and outcomes embedded in the workplace, company, sector, national, and supranational levels.
Trying to pursue varying degrees of efficiency, equity, and voice in different ways.
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Employees Covered by Unjust Dismissal Protections 1 - Text Alternative
Return to parent-slide containing images.
The x-axis on the bar graph shows 10 countries: the United States, Canada, Mexico, Great Britain, Ireland, France, Germany, Sweden, Japan, and Australia. The y-axis on the bar graph shows the percentage of employees covered by unjust dismissal protections, and it ranges from 0 percent to 100 percent at intervals of 20 percent. The data from the bar graph are as follows:
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Employees Covered by Unjust Dismissal Protections 2 - Text Alternative
Return to parent-slide containing images.
Table divided into two columns shows the percentage of employees in 10 countries who are covered by unjust dismissal protections. The column headers are: Country and percentage of employees covered by unjust dismissal protections.
| Country | Percentage of Employees Covered by Unjust Dismissal Protections |
| The United States | 32 |
| Canada | 100 |
| Mexico | 100 |
| Great Britain | 90 |
| Ireland | 100 |
| France | 100 |
| Germany | 100 |
| Sweden | 100 |
| Japan | 90 |
| Australia | 80 |
The values given in the table are approximate.
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