The Role of Unions in Private and Public Sector Industrial Relations in European Countries - Essay Example

? The public sector is the sole remaining sector in which trade unions have influence in the employment relationship’. Discuss this ment with regard to the practices and outcomes of private and public sector industrial relations in at least four European countries Table of contents 1. Introduction 3 2. Influence of unions in the employment relationship 4 2.1 The role of unions in private and public sector industrial relations 4 2.1.1 Industrial relations in UK 4 2.1.2 Industrial relations in France 7 2.1.3 Industrial relations in Germany 9 2.1.4 Industrial relations in Italy 11 2.2 Is the power of unions to influence the employment relations stronger in the industrial relations of the public sector compared to the industrial relations of the private sector? 12 3. Conclusion 14 References 1. Introduction The form of industrial relations in countries worldwide is usually influenced by the local social and economic trends. The local political system is also likely to affect the power of employees to support their rights. In most countries, the law directly protects the rights of employees. Still, there are always chances for violation of employees’ rights, in organizations of both the private and the public sector. The role of unions in securing employee rights has been proved to be significant. Unions have the power to intervene in employment conflicts and set the terms under which negotiations between employers and employees will be developed. In such negotiations the role of unions is decisive in promoting the interests of employees. However, it seems that the power of unions to influence employment relations is not standardized. It is generally believed that in public sector, the power of unions in supporting the rights of employees seems to be increased compared to the private sector. The validity of this argument will be checked by reviewing the private and public sector industrial relations in four European countries: UK, France, Germany and Italy. Emphasis is given on the role of unions in influencing employee relations in each of the above countries. Four of the most powerful, in terms of economic growth, European countries have been chosen under the terms that in these countries industrial activities are more developed, compared to other members of the European Union. Therefore, employment disputes would be a common phenomenon, offering an important sample of the union’s power in supporting employees’ rights. The literature published in the specific field seems to support the view that in the private sector the role of unions in intervening in employee disputes should be enhanced. It is not made clear though on which criteria such initiatives would be taken, having in mind the fact that each of these countries has its own legal, political and cultural framework, even if cultural and administrative similarities exist among them, as members of the European Union. 2. Influence of unions in the employment relationship 2.1 The role of unions in private and public sector industrial relations 2.1.1 Industrial relations in UK UK is a highly industrialized country. In the past, the governmental support offered to the unions has been significant. However, through the years, the changes in the country’s political framework have led to the transformation of employee relations. According to Colling and Terry (2010), the political choices of Margaret Thatcher have led to the limitation of the power of unions to intervene in employment disputes not just of the private but also of the public sector. Under the influence of current political trends in Britain, important differences appear between the employee relations of the private sector and those of the public sector. Leisink and Veersma (2007) have emphasized on the importance of political ideas and trends for the development of an effective employee relations framework. Reference is made to the changes in British employment relations framework since 1997, when the Labour Party won the elections (Leisink and Veersma 2007, p.211). The size of public sector is significant in Britain; reference can be made in particular to the number of employees working in large organizations of the public sector. It has been estimated that a percentage of 39% of the public sector’s employees work in workplaces with 500 or more employees (Cully 1999, p.19). In private sector, this percentage is significantly lower, about 25% (Cully 1999, p.19). The understanding of the status of private and public sector in Britain is necessary in order to realize the level of involvement of the unions in employee relations across the country; in the public sector of Britain, the participation of unions in disputes related to the employee relations is important while in the private sector the potentials of union to intervene in employee relations is limited – as analyzed below. In the private sector of Britain, employee relations tend to be informal, not being regulated by the law, apart from certain exceptions (Colling and Terry 2010, p.135). Another important characteristic of the country’s employee relations as of the private sector is the following one: most of businesses in UK do not accept unions s representatives of employees (Colling and Terry 2010). In the private sector of Britain, employers are not likely to develop negotiations with unions (Colling and Terry 2010). This fact reduces the chances of employees in the private sector to be treated fairly when being involved in a dispute with their employer (Colling and Terry 2010). As a result, employees in the private sector of UK are likely to avoid becoming member of a union, since they cannot expect to be significantly benefited (Colling and Terry 2010). This trend is reflected to the following fact: after reviewing the cases of strikes developed in the private sector of Britain in 2007, Hale (2008) came to the assumption that only a percentage of ‘13% of days lost in the private sector’ (Hale 2008, cited by Colling and Terry 2010, p.135) refer to the country’s private sector, a percentage which can be characterized as quite low taking into consideration that the private sector of Britain represents the 80% of the country’s workforce (Colling and Terry 2010). According to Cully (1999) the differences between the employee relations of the private sector and those of the public sector can be explained by referring to the following fact: in the private sector, employees are urged to work hard in order to promote the interests of shareholders. In the public sector, there is no such need. In the public sector it is the interests of the public in general that have to be taken into consideration. It is clear that in the private sector unions would not be welcomed since they would have to oppose to the interests of particular persons, not necessarily the employer (Cully 1999). The difference in interests, as developed in the private and the public sector of Britain, can normally lead to the differentiation of the rights awarded to the parties involved (Cully 1999). The different levels of union’s power in Britain’s private and public sectors are reflected in the study of Edwards (2003). According to Edwards, in Britain the power of unions in both the private and the public sector has been significantly reduced the last decades (Edwards 2003). It seems though that the limitation of unions’ power has been higher in the private sector compared to the public sector. It is explained that the public sector of Britain represents about the 18% of Britain’s total workforce, as revealed through a research developed in 1998 (Edwards 2003). Even at such level, more than half of union’s members in UK work in the public sector (Edwards 2003, p.271). It should be noted that unions in Britain’s public sector are differentiated from those of the private sector, at the following points: a) the former do not have to face strong market pressures, being protected by the state, b) organizations of public sector in Britain promote the idea of the state as ‘a good employer’ (Edwards 2003, p.271), c) collective bargaining arrangements are likely to be preferred instead of schemes adopted to the needs of each person. At this point, reference should be made to the following fact: privatization in UK is closely monitored by the state; in this way, it is ensured that competition laws are applied and that ‘excess profits are avoided’ (Smith and Grant 2003, p.35). 2.1.2 Industrial relations in France Industrial relations in France have been strongly affected by the wave of nationalizations of 1981 (Hughes 1998). During that year, the French government initiated the nationalization of organizations in a series of industries, primarily of the firms in the banking and investment sector (Hughes 1998, p.392). The specific initiative aimed to increase the control of the government on monopolies but also on the level of prices in the market. In this way, inflation could be monitored more effectively. At the same time, the access of employees to the job market was secured. However, the above practice had not particularly helped the French government in controlling industrial relations. This view is verified through the following fact: during 1995, the number of strikes developed in France has been quite high, reaching ‘the 2,120,500 working days in the private sector and 3,762,600 in the public sector’ (Jenkins 2000, p.191). According to Jenkins, the above phenomenon can be considered as justified. More specifically, since 1994 the practices of the government to introduce ‘employee mobilization schemes’ (Jenkins 2000, p.191) had gradually worsened the relationship between employees and employers. In the public sector, employees have not accepted these schemes and had participated in the actions developed by the unions (Jenkins 2000, p.191). It was made clear that the nationalization project of 1981 was not clearly developed; the French government have started to review its industrial relations practices, meaning especially the restructuring of the firms that have been, already, nationalized (Jenkins 2000, p.191). In the study of Bean (1994) emphasis is given on the difficulties that French government faced when trying to improve existing collective bargaining framework (Bean 1994, p.118). It is explained that these difficulties are justified if taking into consideration the following fact: for many years employers in France have stated their concerns in regard to the need and the processes of collective bargaining (Bean 104, p.118). Ferner and Hyman (1998) note that the frequency and the duration of long-term strikes in France have been effectively controlled from 1970s onwards. In 1970 the lost days because of strikes were estimated to 3.6 million annually; in 1990 the above figure has been decreased to about 600,000 (Ferner and Hyman 1998, p.387), a fact showing the effectiveness of union’s activities in the particular country. It has been also reveled that employees in the private sector were more likely to participate in strikes than the employees of the public sector, a fact that indicates the increased potentials of unions to support the rights of public sector’s employees (Ferner and Hyman 1998, p.387). However, the collective bargaining in practices can be characterized as rather unfair for employees in small companies. More specifically, in large companies across France collective bargaining processes are developed within these firms (Cook and Davie 1999, p.102); in small firms the potentials of employees to be protected is quite limited, a problem related to the existing legal framework in regard to the market’s control. In any case, strikes are not effectively controlled, especially in the public sector (Cook and Davie 1999, p.102). This problem has been related to the country’s unionism and not to the legal rules regulating strikes and other similar initiatives. 2.1.3 Industrial relations in Germany In Germany, industrial relations are differentiated from those in other European countries; however similarities also exist at the level that labour laws in Germany need to be aligned with the European Union framework in regard to employment relationship (Blanpain, Blanke and Rose 2005). For example, in Germany ‘collective bargaining is developed at regional level and not in the workplace’ (Blanpain, Blanke and Rose 2005, p.67), a practice similar to that followed in UK. In UK though the development of collective bargaining processes far from the workplace has been decided because of ‘the weakness of unions to negotiate effectively’ (Blanpain, Blanke and Rose 2005, p.67). Another characteristic of unionism in Germany is the following one: in the specific country ‘the beginning of industrial action in the context of a collective agreement is rare’ (Blanpain, Blanke and Rose 2005, p.67), a phenomenon that is explained by the following fact: in Germany, most of these agreements include clauses of non-action, a term that prevents courts from justifying the particular initiatives even if the claims involved are, at least initially, aligned with the local labour laws (Blanpain, Blanke and Rose 2005, p.67). It should be noted that in Germany the law requires the existence of work councils in all workplaces, no matter the size of the organization; however, this rule is not applied in practice (Blanpain, Blanke and Rose 2005, p.67). A similar problem exists in Britain. In small businesses of Britain and Germany the potentials of employees to fight for their rights are quite limited (Blanpain, Blanke and Rose 2005, p.67). In Germany, the development of the private and the public sector has not been equal. Services are the key part of public sector, while manufacturing industry is more developed in the private sector (Gladstone and Wheeler 1992, p.243). In any case, unionism in Germany seems to be highly developed (Gladstone and Wheeler 1992, p.243). Unionism in the private sector is reflected to the use of work councils in the workplace, which are not likely to exist, as noted above (Gladstone and Wheeler 1992, p.243). As for the public sector, the staff representative bodies organize the participation of employees in unions (Gladstone and Wheeler 1992, p.243). In Germany also, like in UK, the unions in the public sector are stronger than those of the private sector; reference can be made for example to the ‘union of public services, transport and traffic’ (Gladstone and Wheeler 1992, p.243). Unions are also involved in employee relations of the country’s private sector, as for instance ‘the union for trade and banking’ (Gladstone and Wheeler 1992, p.243). In the study of Leisink and Veersma (2007) emphasis is given on the following trend in regard to Germany’s employee relations: the public sector’s industrial relations of Germany have been re-organized using a ‘maintaining strategy’ (Leisink and Veersma 2007, p.16). Through this strategy, the power of unions in intervening in the country’s industrial relations has been decreased (Leisink and Veersma 2007, p.16). From another point of view, the decrease of power of unions in Germany to intervene in industrial relations is related to the limitation of the unions’ members who were mostly ‘blue – collar workers who had decided to leave their positions in the public sector’ (Leisink and Veersma 2007, p.16). According to Weiss ad Schmidt (2008) the processes used in Germany’s private and public sector’s disputes in employee relations are similar. Difference seem to exist only in regard to the number of the members of the staff councils monitoring these processes: in the public sector, the members of the staff council cannot be more than 31, a limitation that does not exist in the private sector (Weiss and Schmidt 2008, p.247). 2.1.4 Industrial relations in Italy The governmental policies promoted in the public sector have been directed towards the achievement of the following target: ‘public spending had to be kept low’ (Sonnet 2004, p.173), a fact that had adversely affected, in many cases, the effectiveness of Italy’s public sector. Sonnet (2004) notes that for many years, the public sector in Italy has been kept unchanged, meaning that existing schemes and infrastructure have not been updated aiming probably to avoid financial risks (Sonnet 2004, p.173). In 1990s the reform of public sector in Italy has started; emphasis has been given on economic policies that would be successfully implemented but also on ‘the Europeanization of the Italian public policy’ (Sonnet 2004, p.173). Ferner and Hyman (1998) note that, traditionally, Italian government has avoided intervening in the relation between employer and employees. Rather, efforts are made so that an integrate legislative framework regulating industrial relations is established (Ferner and Hyman 1998, p.480). The specific effort has started after the end of the Second World War (Ferner and Hyman 1998, p.480). Two have been the key targets of Italian legislators when developing the country’s labour laws: the rights of employees should be effectively protected while entrepreneurs would given the chance to develop their activities in the local market (Ferner and Hyman 1998, p.480). Matteo and Piacentini (2003) argue that Italian employee relations have been significantly transformed in 1990s; during the above period, employers and unions were given the power to coordinate more effectively (Matteo and Piacentini 2003). Still, industrial relations are not fully secured in Italy. Also, collective bargaining processes have been avoided; employers have preferred to use employment contracts that include the term of the automatic adjustment of wage, a practice extensively used in Italy in the period 1975-1992 (Matteo and Piacentini 2003, p.157). 2.2 Is the power of unions to influence the employment relations stronger in the industrial relations of the public sector compared to the industrial relations of the private sector? The potentials of unions to influence employment relations seem to be increased in the public sector, compared to the private sector. The specific assumption is based on the findings of the literature in regard to the specific subject. More specifically: in UK, the role of unions in negotiating for the employees’ rights is quite limited in the country’s private sector. On the contrary, in the public sector of UK unions remain powerful negotiators, even if in certain cases their involvement in employment disputes is opposed by the state, on the basis that certain employment policies are implemented in order to serve the public interest. Moreover, the participation of employees in unions, at an average level, is much higher in the public sector of Britain rather than in the private sector, as indicated in the information provided in section 2.1.1 above. Therefore, in Britain unions seems to be valued more in the public sector than in the private sector. The increased power of unions to intervene in employee relations in the public sector compared to the private sector, justifies the above trend. In Germany also, the increased power of unions to intervene in employee relations of the public sector has been made clear. Indeed, the country’s public sector keeps the control on services, being able to influence more employees in developing industrial action. However, it has been proved that through the recent reforms in the country’s public sector’s employee relations, the standardization of these relations has been threatened. The continuous and extensive privatizations have been found to be the key reason of such policies. This means that, gradually, the differences in the potentials of unions in Germany to intervene in employee relations are eliminated, allowing the increased intervention of employers in employee relations. The power of unions to participate in critical industrial relations issues seems to be high in France. In the specific country the violations of employees’ rights lead to long-term strikes. This fact verifies the high level of unionism in France but also indicates the inability of the country’s union to proceed to effective negotiations choosing mainly the strike as a tool for promoting employees’ rights. Again, like in UK and Germany, the power of unions to influence industrial relations is differentiated in France in accordance with the sector in which the organization operates. In public sector organizations unions are more powerful in affecting industrial relations by arranging massive strikes and other similar forms of resistance to the government’s plans. As for Italy, no particular difference seems to exist between the private and the public sector, as of their potentials to be involved in collective bargaining processes. In fact, in the above country, due to the relevant legal rules, collective bargaining has been discouraged, at least up to 1992. On the other hand, industrial relations in Italy can be characterized as satisfactory, guaranteeing the protection of employees’ minimum rights. From this point of view, radical changes in the country’s collective bargaining processes or the promotion of unionism would not have critical value in regard to the employees’ potentials to secure their rights. For example, ‘for Giovanni Agnelli, the head of Fiat’ (Locke 1995, p.79) securing the rights of employees has been a priority, even above other, critical, market or individual interests. Moreover, Gualini (2004) notes that the reform of the Italian industrial relations framework, as promoted through the Italian governments from 1990s, is normally expected to create obstacles, at least temporary, in regard to the promotion of innovation in country’s firms. 3. Conclusion Industrial relations in European members states presents similar forms. However, the measures taken in its member state for the effective monitoring of unionism, as an element of industrial relations, tend to be differentiated across the member states on the basis that economic, political and cultural characteristics of each country are different. The review of industrial relations and unions’ role in four different European countries, led to the following assumptions: the development of effective industrial relations in countries around the world is a challenging task. Of course, the role of unions in resolving critical employment relations’ problems is significant but its elements are often difficult to be understood. Important differences have been found to exist in regard to the potentials of unions to intervene in industrial relations of the public sector. In addition, the difficulties that a private sector organization has to face when using collective bargaining processes can lead to severe delays in the implementation of effective market plans, as promoted by the local government. There can be no doubt that unions can help employees in both the private and the public sector; however, the risks involved are not standardized, especially when there are no effective mechanisms of control; this fact should be taken into consideration by union’s representatives when participating in collective bargaining process or other forms of fight for supporting employees’ rights. References Bean, R. (1994) Comparative industrial relations: an introduction to cross-national perspectives. Belmont: Cengage Learning Blanpain, R., Blanke, T., and Rose, E. (2005) Collective bargaining and wages in comparative perspective: Germany, France, the Netherlands, Sweden and the United Kingdom. Hague: Kluwer Law International. Clarke, T., and Pitelis, C. (1995) The political economy of privatization. London: Routledge. Colling, T., and Terry, M. (2010) Industrial Relations: Theory and Practice. Hoboken: John Wiley & Sons. Cook, M., and Davie, G. (1999) Modern France: society in transition. London: Routledge Cully, M. (1999) Britain at work: as depicted by 1998 workplace employee relations’ survey. London: Routledge. Edwards, P. (2003) Industrial relations: theory and practice. Hoboken: John Wiley & Sons. Ferner, A. , and Hyman, R. (1998) Changing industrial relations in Europe. Oxford: Wiley-Blackwell Gladstone, A., and Wheeler, H. (1992) Labour relations in a changing environment. Walter de Gruyter. Gualini, E. (2004) Multi-level governance and institutional change: the Europeanization of regional policy in Italy. Aldershot: Ashgate Publishing Hughes, A. (1998) Encyclopedia of contemporary French culture. London: CRC Press Jenkins, A. (2000) Employment relations in France: evolution and innovation. New York: Springer Leisink, P., and Veersma, U. (2007) Industrial Relations in the New Europe: Enlargement, Integration and Reform. Cheltenham: Edward Elgar Publishing. Locke, R. (1995) Remaking the Italian economy. New York; Cornell University Press Matteo, M., and Piacentini, P. (2003) The Italian economy at the dawn of the 21st century. Aldershot: Ashgate Publishing Smith, D., and Grant, S. (2003) UK current economic policy. Oxford: Heinemann. Sonnet, A. (2004) Italy. Paris: OECD Publishing Weiss, M., and Schmidt, M. (2008) Labour law and industrial relations in Germany. Hague: Kluwer Law International Read More