Track 3: Workers’ Voice and Industrial Democracy

Inger Marie Hagen, Fafo Institute for Labour and Social Research, Oslo

Board level employee representation is well established in a number of European countries. In some countries, the arrangement is anchored in company law, while in others the provisions are found in either labour law or in collective agreements. The different arrangements have however one important feature in common: the arrangements are part of national law and thus – the right to representation is given to employees working in the country in question only. Employees in foreign-based subsidiaries have no right to representation at group board level (‘konsern’) even if national legislation might provide for representation in the subsidiary in the country at hand. However, three countries make up the exception to this rule:  France, Denmark and Norway. In addition, in Germany and Sweden, the legal situation might be interpret as permitting transnational representation if the trade unions comply and in both countries, examples of transnational representation exist.

This paper looks at this transnational arrangement with a Nordic perspective. So far 29 groups have been identified, 24 in Norway, 2 in Denmark and 3 in Sweden. Three key questions are addressed.

First, why transnational representation established? There is no mandatory provision on representation in neither country and thus, the workers need to organize a demand for representation. The next step is to transform the arrangement into a transnational arrangement. Did the employees, the management, the shareholder elected board members or the trade union take the initiative?

Secondly, how was the representatives elected? All three countries are characterize by a ‘single channel system’, e.g. at company level the trade union representatives (from the local branch of the national trade unions) represent the employees in relation to the management. Never the less, BLER election methods varies. E.g., when to elect a Swedish representative from the Swedish subsidiary to the board of a Norwegian group – does Swedish (appointed by the trade union) or Norwegian rules (elected by all employees in company) apply?

Thirdly, how do the representatives evaluate the arrangement and especially the role of their foreign colleagues? If – and how - do the representatives cooperate and what is the role of the trade union (if present in company)?

The data is mainly qualitative (interviews with BLERs in different groups) supplemented by two quantitative survey, one by the European Trade Union Institute (ETUI) and one by Fafo.  The paper argues that in order to understand the role of BLERs at different level, the analysis need to include both an industrial relation framework as well as insight from corporate governance. The paper is based on a project is funded by ETUI.

Key words: co-determination, board level employee representation, transnational representation, trade unions, qualitative analysis

Sigurt Vitols, Berlin Social Science Center (WZB)
Robert Scholz, Berlin Social Science Center (WZB)

» Full paper: ilera-2019-paper-289-Vitols.pdf

An increasing amount of research is showing that companies are becoming more short-term in their investment time horizons, i.e. companies are sacrificing long-term investments (even though they would be profitable) in order to increase their short-term payments to shareholders in the form of dividends and share buybacks. Up to now, this literature has not examined the influence that board-level employee representation (BLER) may have on company investment time horizons. Using a unique six-component measure of codetermination strength in German companies, the Mitbestimmungsindex (MB-ix), this paper shows that BLER has a positive influence in lengthening company investment time horizons.

Chair: Ilaria Armaroli
Organiser: John Budd, University of Minnesota

Panelists:

• Melanie Simms, University of Glasgow
• John Budd, University of Minnesota
• Kurt Vandaele, European Trade Union Institute (ETUI)

The workshop discusses different ways in which IR academics (and others) can
use social media and online tools in our own work. Contributions and questions
from the audience are welcomed.

Panelists will start the discussing by demonstrating one or more social media tools and describing some applications in their own work, including engagement with other scholars and those outside of the academy. This would include an indication of some of the benefits and costs of using social media. Then we would welcome contributions and questions from the audience.

The overall objective is to help audience members envision ways in which they could possibly use social media in their own work while understanding the benefits and costs.

Social media tools that would be discussed include Twitter, Facebook, ResearchGate, and blogging. Note that the current proposal has four panelists. If the organizing committee has ideas for another panelist with interesting applications (except Twitter), we would welcome a fifth panelist (especially someone from continental Europe).

Fabio Berton, University of Turin
Stefano Dughera, University of Paris-Nanterre and University of Turin
Andrea Ricci, National Institute for Public Policies Analysis (INAPP)

» Full paper: ilera-2019-paper-140-Berton_1.pdf

In this paper, we present a simple model in which a unionized and non-unionized firm optimally make investment decisions given their labour productivity. By allowing workers’ organizations to have positive effects on labour effort, we find that the classic hold-up problem does not necessarily survive. We also derive conditions under which rent-seeking by unions may actually encourage firms’ investments.

Keywords: Labour Unions, Rent seeking, Workers’ effort, Firms’ investments, Hold-up

JEL: J51, O31, O32

Julian Teicher, Central Queensland University
Bernadine Van Gramberg, Swinburne University of Technology
Greg J. Bamber, Monash University
Brian Cooper, Monash University
Peter Holland, Monash University
Amanda Pyman, Deakin University

The literature on workers’ voice and productivity has limitations, including its focus at the individual level and its lack of theorisation of the relationship between voice and performance. Our paper advances understanding of the relationship between the concepts of employee voice (EV) and productivity at the organisational level. In doing so we investigate:  1. how and why that relationship varies across different voice channels; and 2. whether voice is present and effective.

EV and its impact on organisational performance and productivity has received increasing attention by employment relations (ER) and human resources management (HRM) scholars since Freeman and Medoff (1984). EV refers to the variety of ways in which employees attempt to have a say and potentially influence issues that affect their work and the interests of management (Wilkinson et al. 2015). The literature is distinguished by its philosophical and discipline-based standpoints. From an organisational-behaviour (OB) perspective, it has been argued that voice is a predictor of individual and organisational productivity (Mowbray et al. 2014). Through this lens, voice seen as a pro-social behaviour of workers where they communicate information and ideas to managers for the benefit of employing organisations, which then translates to better performance outcomes.

Whilst the relationship between job satisfaction and individual performance is well established, individual performance does not neatly aggregate to the organisational level in a way that suggests increased productivity (e.g. Farndale et al. 2011). Similarly, the literature on high performance/high involvement work systems typically examines the effect of EV interventions on organisational productivity (Harley 2014). In the ER and HRM fields, the relationship between EV and performance is often considered through the relationship between voice and job satisfaction, with the latter used as a proxy for performance. It has also been proposed that EV through unions may channel discontent and reduce exit, thereby improving productivity (Barry & Wilkinson 2015). Nevertheless, the relationships between EV, job satisfaction and organisational productivity in the ER and HRM literature remain elusive (e.g. Purcell 2014). Job satisfaction is a much-studied construct and there is evidence linking it to a range of desirable performance outcomes. Such evidence however, tends to be either individually based or used to draw inferences based on the effects of measures such as motivation and commitment, which are viewed as leading to improved organisational outcomes. There are fewer studies that attempt to theorise the links between voice and performance, which we do through job satisfaction and the use of two aspects of voice: structural voice and experience voice. Thus, it is important to conduct research on the effect of voice on organisational productivity.

We use a large dataset, the Australian Workplace Relations Study (AWRS 2015) constructed from a national survey, the first linked manager-employer survey in Australia this century. The dataset comprised survey responses from 3,592 employees from 648 private sector enterprises We adopt two measures of EV, structural and experience voice. Structural voice identifies the voice channels available to employees and experience voice refers to the actual usage of these mechanisms by employees.

We find a positive relationship between the exercise of employee voice and workforce productivity that is mediated by job satisfaction. The actual use of voice in workplaces is associated with more satisfied workers and, consequentially, job satisfaction plays an important mediating role in increasing workforce productivity. However, our data shows that the mere presence of voice mechanisms is not usually sufficient to generate satisfaction. Nevertheless, in practical terms, voice cannot be expressed easily unless voice mechanisms were present. We conclude that, first, having voice structures enables managers to offer employees a variety of ways in which to provide advice that could lead to increased productivity. Second, encouraging voice leads (indirectly) to improved performance through job satisfaction. The latter conclusion supports conventional wisdom, but combines it with the strength of managerial perceptions of workforce productivity, our measure of performance.

Even though voice is not related to increased job satisfaction, we argue that the greater the number of voice options available to employees, the greater the chance that employees will use them. However, this leaves us with a conundrum, as most Australian enterprises surveyed reported only a modest level of voice. We argue that these enterprises are failing to realise potential productivity gains by not providing and promoting a larger suite of voice mechanisms. The finding of a dearth of voice mechanisms is all the more surprising given the extensive research on voice in the HR field, which considers links between such communication channels and workforce productivity (Heery 2015).

How can we explain the modest number of voice channels and low uptake of various forms of voice, particularly indirect forms of voice reported in this and some other studies? Returning to the conceptualisation of EV by Wilkinson and colleagues (2014), employers may be reluctant to enable voice channels because they may be used to challenge managerial authority. In the absence of a legal requirement to implement particular forms of voice, such as the European Works Council Directive, managers in Australia may draw from a more limited menu of voice options, weighing the uncertain gains in performance unfavourably in comparison to their perceived potential for disruption. The reticence to use these channels is more than an issue of union avoidance, as there are many non-union channels available to management. Rather, it is likely to reflect a management choice to restrict the number of voice channels available to employees.

Our findings offer a nuanced and important contribution to the literature on voice, job satisfaction and organisational performance that has implications for HRM and ER theory and practice. We make theoretical and practical contributions to the ER and HRM literature. We contribute a better understanding of the relationships between EV, satisfaction and organisational productivity and particularly investigate how and why those relationships vary across voice channels. This is novel because the ER literature tends to overlook the organisational performance relationship with voice, while the OB literature concentrates on the relationship between a limited set of voice channels and individual performance.

References

• Barry, M. & Wilkinson, A. (2015). Pro-Social or Pro-Management? A Critique of the Conception of Employee Voice as a Pro-Social Behaviour. British Journal of Industrial Relations, DOI: 10.1111/bjir.12114.
• AWRS (2015) Australian Workplace Relations Study. Melbourne: Fair Work Commission. www.fwc.gov.au/resources/research/australian-workplace-relations-study. Accessed 25 January 2019.
• Farndale, E., Van Ruiten, J., Kelliher, C. & Hope Hailey, V. (2011). The influence of employee voice on organizational commitment in times of organizational change: an exchange perspective. Human Resource Management 50 (1): 1-17.
• Freeman, R. B. & Medoff, J. (1984). What Do Unions Do? New York: Basic Books.
• Harley, B. (2014). High performance work systems and employee voice. In Wilkinson, A., Donaghey, J., Dundon, T., & Freeman, R. (eds.), Handbook of research on Employee Voice. Elgar: Cheltenham: pp. 82-96.
• Heery, E. (2015) Frames of reference and worker participation. In Johnstone, S. & Ackers, P. (eds.) Finding a Voice at Work? New Perspectives on Employment Relations. Oxford: Oxford University Press: 21-43.
• Mowbray, P., Wilkinson, A. & Tse, H. (2014). An Integrative Review of Employee Voice: Identifying a Common Conceptualization and Research Agenda. International Journal of Management Reviews 17 (3): 382-400.
• Purcell, J. (2014) Employee voice and engagement. In Truss, C., Delbridge,  R., Alfes, K., Shantz, A. & Soane, E. (eds.), Employee Engagement in Theory and Practice. London: Routledge: pp. 236-49.
• Wilkinson, A., Dundon. T., Donaghey, J., & Freeman, R. (2014). The Handbook of Research on Employee Voice. Cheltenham: Elgar.
• Wilkinson, A., Townsend, K., Graham, T. & Muurlink, O. (2015). The failure of voice at Bundaberg hospital. Asia Pacific Journal of Human Resources, DOI:10.1111/1744-7941.12061.

Workers’ participation in a 4.0 lean production system

Lisa Dorigatti, University of Milan
Matteo Rinaldini, University of Modena and Reggio Emilia

Similarly to the former debate on Lean Production (LP) and High Performance Work Practices (HPWP), the current discussion on Industry 4.0 is characterized by two contrasting stances. On the one hand, some scholars tend to assume that, notwithstanding the possibly negative effects on the number of jobs (see, for example, Frey and Osborne 2013), the introduction of new technologies and the new organizational models connected with them might produce opportunities for job enrichment, the diffusion of participatory systems, the increase of the cognitive contribution of workers and the reduction of hierarchical levels (Agolla, 2018, Buer et al. 2018, Sony, 2018) On the other hand, some literature identifies the risk that the new organizational processes enabled by these new technologies might generate greater standardization, intensification of work and more pervasive mechanisms of control by the management (Butollo et al. 2018, Degryse 2016).

Based on the analysis of over 160 semi-structured interviews with workers employed in FCA, CNH and Magneti Marelli Italian plants, this contribution wants to contribute to this debate by focusing on the mechanisms of workers’ involvement adopted within the framework of the World Class Manufacturing system adopted since the late 2000s and the changes in the hierarchical structures at shop floor level this system foresees. Despite the corporate rhetoric on workers’ involvement and their cognitive contribution, workers’ interviews brings to light a critical picture in terms of worker’s participation, considered as ritualistic, and work intensification, and a tendency to consider recent technological and organizational transformations more as a source of stress, than of enrichment. Finally, the interviews show how the new organizational articulations based on the centrality of the figure of the Team Leader do not seem to correspond to a process of de-hierarchization, but rather to a reorganization of the hierarchical structure and a change of the corporate system of coordination and control.

Evidence from a field experiment

Patrick Nuess, Macroeconomic Policy Institute (IMK), Hans-Böckler-Foundation

Based on a correspondence experiment sending 2000 fictitious job applications to real vacancies (extended by 3000 applications in autumn 2018), the paper analyses firms resistance to unionism by revealing trade union membership in the hiring process. Due to the institutional structure of Germany as well as the available firm characteristics, the experiment furthermore tries to decompose firms potential resistance into different channels related to firm characteristics as the existence of a collective agreement and the contract type. Preliminary results suggest, resistance against trade union members in Germany exists for all tested occupations and regions with an average decline in callbacks by 30%. The analysis further indicates, that resistance against trade union members is lower in firms providing a temporary contract or with a collective agreement.

How do employees respond to management strategies against works councils and trade unions?

Oliver Thünken, Chemnitz University of Technology
Alrun Fischer, Alrun Fischer Beratung
Markus Hertwig, Chemnitz University of Technology
Daniel Menning, Chemnitz University of Technology

In recent years, there are increasing reports about union busting activities in German private sector companies (Behrens/Dribbusch 2018). Many cases have been documented in scientific research and public debate where employers or managers seek to hinder employee participation or undermine co-determination rights that are granted, in particular, by German labour law, the Works Constitution Act (Betriebsverfassungsgesetz). Union busting shows up in efforts, for instance, to prevent the election of a works council, to hinder the functioning of elected works councils or to agitate against trade unions and avoid collective bargaining (Rügemer/Wigand 2014; see also Artus et al. 2016). Those activities of union busting are by no means really new (see Bormann 2007). However, several studies and reports indicate that the “quality” of union busting in Germany has changed, that is, employers or managers exert intensive pressure on activists or works council members; they chose apparently illegal practices, which often are dealt with in courts; moreover, employers seek the support of specialized consulting firms, lawyers or employer associations to put union busting into practice.

While there has been already some research concerning the practices of union busting in Germany, little regard has been paid to the (counter-) strategies of the employee side. How do employees react to union busting methods? Which strategies do works councils chose to fight pressures from employers and managers? How effective are different strategies in diverse social settings? Those employee-side strategies are at the centre of the paper proposal outlined here.

The empirical basis stems from a research project that is currently funded by the Hans-Boeckler-Foundation (3/2018 until 9/2019) and carried out at Chemnitz University of Technology in cooperation with AFB/Beratung für Betriebsräte, Dresden, Germany. During the project, more than 25 case studies are being conducted in different sectors, in which union busting is found to be virulent. In each case, interviews are being conducted with works council members and the respective local trade union officials. Furthermore, expert interviews have been conducted with lawyers and trade union officials (ca. 50 interviews).

The research shows that union busting differs sharply in terms of intensity, motivations and tactics chosen by management. Some strategies aim at preventing the election of a works council, some seek to hinder the effective functioning of an existing works council, while others are directed against individual works council members; another set of strategies is used by employers to prevent collective bargaining. In many cases, attempts to establish a works council or to become more active are triggered by bad working conditions or managerial arbitrariness. Despite different motivations of union busting, employer strategies clearly differ concerning their intensity.

At the same time, we find a variety of patterns of employee reactions. While there are works councils or workforces that use a large range of strategies to fight union busting, others settle for only a restricted number of activities. Many works councils seek juridical support and advice from trade unions; others stick to media campaigns. What appears to be a crucial success factor is whether a works council or a works council initiative is backed by the workforce and whether activists is strong and durable enough to withstand the hostility from management (and sometimes from parts of the workforce).

References

• Artus, I.; Kraetsch, C.; Röbenack, S. (2016): Betriebsratsgründungen. Typische Phasen, Varianten und Probleme, in: WSI-Mitteilungen 69(3), S. 183-191.
• Behrens, M./Dribbusch, H. (2018): Employer Resistance to Works Councils: Evidence from Surveys amongst Trade Unions, in: German Politics (Online First).
• Bormann, S. (2007): Angriff auf die Mitbestimmung. Unternehmensstrategien gegen Be-triebsräte - der Fall Schlecker. Berlin.
• Rügemer, W.; Wigand, E. (2014): Die Fertgimacher. Arbeitsunrecht und professionelle Gewerkschaftsbekämpfung. Köln.

John Geary, University College Dublin

This paper examines the quest for effective employee voice in Ryanair. Ryanair is a fascinating case. It’s a case of a company that has uniquely manipulated variations across regulatory labour market regimes to its advantage. It has prospered enormously. Key to its success has been its ability to determine without union involvement the terms and conditions upon which its employees are recruited and managed. This strategy worked for decades. Now it looks like it has come undone following a campaign by its pilots and cabin crew in pursuit of union recognition and subsequently by management’s ostensible volte face to cede to their demands. This paper focuses on the pilots' organising campaign.

Ryanair stood as an outlier in the international airline industry for decades not only for its dramatic success and growth as a low cost airline, but for determining unilaterally the terms and conditions upon which it employed its staff. Unlike virtually all other European airlines, there was no union recognition and no collective bargaining. It is a case par excellence of a company that manipulated a permissive regulator regime for its own ends. Despite having aircraft located all across Europe, flying to all parts of Europe and further afield, and recruiting and locating its staff across 87 bases, all of its employees are considered Irish staff. That is, under employment legislation, their workplace is ‘located’ in Ireland. This is, or was at least, permissible under European and Irish law. This has afforded Ryanair considerable advantages in terms of maintaining low recruitment costs, sustaining flexible working arrangements, and maximising particular working hour structures. Key, too, to this model of employment was its ability to evade union recognition.

This employment relations model would now seem, ostensibly at least, to be in tatters on foot of ceding to a pilots’ campaign for union recognition. However, early fieldwork findings suggest that the matter is far more complicated and that union recognition has been ceded by the company to disable and weaken the pilots’ cross-national organising campaign. At the outset, the pilots sought a voice in management decision-making at the level of the company. Union recognition, as ceded by the company, ensures the pilots ‘return’ to their national pilot federations and negotiate at a national level thus reducing the likelihood of any concerted co-ordinated European-wide collective bargaining effort.

The paper traces the airline’s employment relations strategy, employees’ response, the manner in which the pilots sought to organise against the company, the obstacles they faced, how they were overcome and how the company responded.

There is a rich literature on how companies resist union organisation and how workers are or are not able to overcome such managerial objections. The paper investigates if these factors hold in this case. In most cases, however, prior research has looked at individual workplaces, companies or sectors, all of which are located within one nation state. This project is original in its attempt to examine union recognition in the context of a ‘multi-national’ company with subsidiaries (bases) in many European countries, operating in a complex and fluid regulatory environment.

Data is being collected currently principally through in-depth interviews with pilots’ activists/representatives, union organizers, pilots, legal representatives and management.

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.