T3-05: Labour-management relations

5 September 2019, 16:00–17:30

Chair: Dong-One Kim


How employers perceive the value of works councils

Pre- and post-economic crisis comparison

Valentina Franca, University of Ljubljana

There are several factors, which influence implementation of employee participation. Among these, legal regulation and the management attitude are most frequently mentioned. The management's reluctance to inform and consult with workers' representatives often results in worse and lower exercise of employee participation, although the law provides adequate opportunities for effective cooperation. There are several reasons for the reluctance of the management to employee participation, such as the ignorance of workers’ right as determined by the law, lack of recognition of the benefits of cooperating with workers this way, the system of employee participation is seen as an obstacle to quick and effective decision-making, and the like.

The paper presents an analysis of the quantitative research conducted among the employer organization members in Slovenia. The data was collected in October and November 2018 through a web survey. The questionnaire was sent to all contacts of the employer organization (1793 e-mails), 373 opened the e-mail with the invitation to collaborate in the survey, and, finally, 125 members completed the questionnaire. Thus, the response rate was 7 %. The main purpose of the research was to find out what are employers' attitudes towards implementation of employee participation, where they see deficiencies and opportunities for improvement of the current system of employee participation. The results will be compared to the findings of a similar own research, conducted in 2007. The comparison is important as the legislation has not changed in the meantime, but due to the economic crisis and severe competition it can be assumed that the management may value employee representatives differently.

Nearly half of the companies has a works council and of those 80% also has a trade union at a company level. The results show that works councils have quite a tradition, as a half of the companies with a works council have had the works council for more than 20 years and a quarter of them between 10 and 20 years. In general, they estimate collaboration with a works council as average (3.47 out of 5) and point to communication and information as the main areas that need to be improved. However, on the other hand, the respondents claim that collaboration with a works council enables better communication in the company and greater consideration of employees' interests, as compared to other claims stated in the questionnaire. As regards the question on the work of works councils, the employers are mostly bothered by the former’s inactivity or poor activity as well as the lack of proper knowledge and understanding of their role in the society.

The second set of questions referred to the opinion on the legal regulation or, more specifically, to the scope of rights guaranteed to employee representatives by the Workers Participation in Management Act. More than a half of the respondents consider the existing legislation as appropriate, but nearly a third believe that the law is giving them too many rights. They are at least inclined to the right to co-decide. On the other hand, they see potential strengthening of cooperation with the works council towards their greater activity, standing up for employees, and in innovation, strategic functioning and development.

The third set of questions was intended for all research participants. When asked about which forms of employee participation they think are the most appropriate, they answered information (56%), consultation (46%) and, interestingly enough, employee share in profit (37%). The latter is a very interesting finding, because in Slovenia there is no mandatory employee share in profit or, in other words, it is rarely exercised in practice. In fact, employees have attempted in different ways to further expand this form of employee participation, but no developments have yet been made in this context. Increasingly, discussions revolve around in which cases it would be appropriate to inform employee representatives and when to consult them. The results show that employers are more inclined towards informing works councils about the so-called “business issues”, which is expressed as change of company status (88%), company strategy (76%) and with regard to the questions on company business operations (72%). In general, the respondents are less inclined towards consulting works councils, but more than a half consider consulting a works council regarding human-resource issues, work organization, such as job classification (57%), health and safety (55%) and personnel issues related to layoffs (54%). In the co-determination process as the form of employee participation, there is an extremely low percentage of respondents, in most cases they saw the point of co-determination in connection to health and safety (29%); while they least want to be involved in co-determination with regard the change of company status (5%). So, it comes as no surprise that two thirds of the respondents want statutory changes in the context of decision-making, and a third of those also in the context of consultation. The paper will further discuss the results based on a more sophisticated statistical analysis.

The comparison with a similar survey among 255 managers in Slovenia in 2007 reveals a major trend. One of the main conclusions of the research was that there is a significant positive link between the agreement that informing employees and consulting with them helps the company’s performance and the participation implementation level in both models that were tested. In contrast, support for the co-determination of employees was found to be negatively correlated with the level of implementation, although it was found statistically non-significant. Similarly, the findings of the current research indicate that managers prefer information and consultation rather than co-determination. Also back in 2007, before the economic crisis, managers defended the position that the legislation should be modernized, taking into account the current business trend, and “socialistic solutions should be refined”.

The main contributions of the paper will be 1) in presenting a theoretical overview of the influence of management attitudes on employee participation; 2) analysis of the web-based research among members of one of the Slovenian employer organizations; 3) comparison of research results from 2017 and 2018 on the opinion of the management in Slovenian companies regarding the implementation of employee participation; and (4) making recommendation about further policy-making activities and legislative changes.

When universal HR perspectives give way to contextual issues

Lessons from developing economies

John Opute, London South Bank University

There is evidence across many developed economies (particularly in Europe) that there continues to be growing importance of collective bargaining but in different forms and different models. For example, there is a seemingly increasing development towards works council ‘batching’ in some European countries just like we seem to notice ‘collective begging’ tendencies rather than collective bargaining in many developing economies. Extending this narrative to developing economies, highlights the extent to which recent developments might improve employment relations.

Many developing economies lack ‘consistent democracy’ leading to several infrastructural and societal challenges in business management. Their controversial evolution towards viable democratic structures has a considerable consequence for the wider world. On the other hand, the promotion of collective bargaining has created a new contour in the process of trade union development, which if properly harnessed, will lead to business efficacy and generate the so much heralded wealth for sustaining these economies. The paper reveals that employees are not necessarily searching for freedom of association (which is traditionally pursued by trade unions) but for recognition, which comes from understanding their orientation. Therefore, they wish their minds and hearts to be won by their employers, which is beyond ‘filling their pockets’ and sometimes beyond the roles of trade unions and collective agreements. Additionally, there has been significant literature on employee voice but understanding employer voice provides even a better platform for effective workforce participation.

This paper contributes to this issue with empirical evidences from some organisations by examining the evolution of collective bargaining and the sustainability of existing collective bargaining mechanisms and the collective agreements derivable from this process. There are significant differences in the practice of collective bargaining in several developing economies because of the varying contextual issues, not limited to the economic and political developments but also alluding to the maturity of the actors in the employment relations intuitions. It is apparent that theoretical arguments differ on the future of workforce participation in developing economies therefore empirical studies are needed to provide greater clarity and more robust discussions. One way of obtaining an in-depth understanding of the problems is to focus on a country where collective bargaining institutions have changed greatly within a fleeting period and Nigeria provides a good example for such an investigation for distinct reasons.

This case study approach is based on the analysis of recent industrial relations development and evidences from 11 multinational/local companies in the formal labour sector. This is complemented by semi-structured interviews and questionnaires with a variety of HR practitioners and employees.

In conclusion, this paper analyses some aspects of the trajectory of collective bargaining evolution albeit focusing on examining appropriate criteria for adopting a collective bargaining strategy, which provides the opportunity for both the employers and workforce to be more pragmatic. Furthermore, it demonstrates that collective bargaining has specific country orientations, reflecting the socio-economic predispositions of each country, the cultural paradigms and the connectivity of these issues.

Key words: Nigeria, participation, collective bargaining, trade unions, culture, socio-economic and developing economies.

Labour-management partnership development and challenges in South Korea

Changwon Lee, Korea Labor Institute

» Full paper: ilera-2019-paper-67-Lee.pdf

Labor-management partnership (LMP) can be considered as labor-management cooperation in a broad sense, and traditionally is referred to as industrial relations laying emphasis on workers participation in a narrow sense).

The reinforcement of the labor-management partnership through the participation in management of employees and labor unions which at the same time asked the improvement of corporate management performances in response was closely connected to the introduction of high performance work system, so it was natural to connect partnership with the way of working in workplaces, the flexibility of organizations, labor-productivity, and the improvement of quality.

However, labor unions experience the weakening of traditional collective bargaining while managements acquire benefits of high-productivity, low-costs, and decreased conflict costs, etc. Although profit sharing increases, it also is accompanied by the intensification of labor control and decrease in job autonomy.

Korea's LMP is at a basic level for establishing communication and trust between labor and management. In the motivation for requesting support for the LMP program, the cases for communicating between labor and management are more important than the workplace innovation and productivity enhancement purposes, and also the projects are labor-management cooperation declaration, labor-management joint grievance settlement, and community service activities, etc.

In this paper, I would like to find a slight change in the recent trend compared to the past in Korea.

For example, KyungEun Industry, which was selected as the best company in the SME sector in the 2016 Labor-Management Partnership Competition, passed the crisis of closing down at the end of 2006, not only the workshops between labor and management but also the innovation of the field for productivity improvement, it has improved long-time working hours with the basic spirit of “people first than work” and introduced employee stock ownership scheme, while labor and management joined forces in balanced innovation systemizing the human resource development program.

For the recent cases of LMP development, trust building is important for the formation of the partnership in the first stage, and it is necessary to build a program through participation based on mutual trust in the second stage, and labor and management cooperation for an innovation program that integrates learning and labor is needed in the third stage.

This study will address the key characteristics of changing LMP cases in Korea with comparison of the past experiences in European countries and suggest future challenges they are facing.

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