European Trade Unions

European Trade Unions

During the last two decades, trade unions in the European Union have faced an increasingly hostile environment, conditioned by growing globalization and structural changes in the contemporary European economies. This book considers the problems this new environment poses for trade unions and, in particular, the responses they have been developing to these problems. The volume: • explores the extent to which European industrial relations systems are converging • looks at what has been the unions’ responses to changes in the economic environment • includes studies from key sectors: electronics, food manufacturing, banking, and central government administration • compares trade unions in these sectors in five of Europe’s most important economies: Germany, the UK, Spain, Italy, and Denmark. Taken together, these considerations illustrate some of the most important industrial relations tendencies in Europe. Mike Rigby is Principal Lecturer in Human Resource Management at the South Bank University, London. Roger Smith is Principal Lecturer in Employment Relations at the South Bank University, London. Teresa Lawlor is Head of the School of Languages, Kingston University, London.

Routledge Studies in the European Economy 1

Growth and Crisis in the Spanish Economy, 1940–1993 Sima Lieberman

2

Work and Employment in Europe A new convergence? Edited by Peter Cressey and Bryn Jones

3

Trans-European Telecommunication Networks The challenges for industrial policy Colin Turner

4

European Union—European Industrial Relations? Global challenges, national developments and transnational dynamics Edited by Wolfgang E.Lecher and Hans-Wolfgang Platzer

5

Governance, Industry and Labour Markets in Britain and France The modernizing state in the mid-twentieth century Edited by Noel Whiteside and Robert Salais

6

Labour Market Efficiency in the European Union Employment protection and fixed-term contracts Klaus Schömann, Ralf Rogowski and Thomas Kruppe

7

The Enlargement of the European Union Issues and strategies Edited by Victoria Curzon-Price, Alice Landau and Richard Whitman

8

European Trade Unions Change and response Edited by Mike Rigby, Roger Smith and Teresa Lawlor

9

Fiscal Federalism in the European Union Edited by Amedeo Fossati and Giorgio Panella

10 European Telecommunications Liberalisation Edited by Kjell A.Eliassen and Marit Sjøvaag

European Trade Unions Change and response

Edited by Mike Rigby, Roger Smith and Teresa Lawlor

London and New York

First published 1999 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1999 Edited by Mike Rigby, Roger Smith and Teresa Lawlor All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data European Trade Unions: change and response/edited by Mike Rigby Roger Smith, and Teresa Lawlor p. cm Includes bibliographical references and index. 1. Trade-unions—European Union countries—Case studies. 2. Industrial relations—European Union countries—Case studies. 3. Comparative industrial relations. I.Rigby, Mike, 1946– II. Smith, Roger, 1947–. III. Lawlor, Teresa, 1945– HD6657.E949 1999 331.88’094–dc21 ISBN 0-203-98350-5 Master e-book ISBN

ISBN 0-415-17043-5 (Print Edition)

Contents

Tables

vi

Contributors

vii

Acknowledgements

viii

Abbreviations

ix

Introduction

xv

1

The convergence/divergence debate in comparative industrial relations ROGER SMITH

1

2

Approaches to the contemporary role of trade unions MIKE RIGBY

17

3

The national industrial relations contexts MANUEL PÉREZ YRUELARAFAEL SERRANO DEL ROSAL

37

4

Electronics MIKE RIGBY

53

5

Food manufacturing ROGER SMITH

103

6

Banking TERESA LAWLORRAFAEL SERRANO DEL ROSAL

139

7

Central government administration ROSARIO MORILLO BALADO

181

8

Conclusions MIKE RIGBY,ROGER SMITHMANUEL PÉREZ YRUELA

211

References

223

Index

233

Tables

3.1 Union membership density, 1950–95 3.2 Percentage of employees covered by collective bargaining, 1996–97 4.1 Production value 4.2 Electronics imports/exports, 1996 4.3 The ten principal companies in the European electronics market, 1994 4.4 Japanese production facilities in Europe 4.5 European electronics imports/exports by subsector, 1996 4.6 The ten leading computer/office equipment companies, 1996–97 4.7 Electronics employment by country 4.8 Principal trade unions in the electronics sector 4.9 Union density in the electronics sector 4.10 Italian works council elections, 1994 5.1 Food manufacturing imports/exports, 1994 5.2 Western Europe: leading food and drinks groups, 1996, food sales 5.3 Number of employees in the food, drink, and tobacco sector 5.4 Principal trade unions in the food manufacturing sector 5.5 Union density in the food manufacturing sector 6.1 The top fifty global banks, 1997 6.2 Relative position in relation to top fifty Western European banks (assets), 1996 6.3 Location of non-EU foreign banks in the EU 6.4 Relative importance of the biggest banks’ assets 6.5 Relative profitability of the different banking systems 6.6 Credit per employee 6.7 Number of employees per branch 6.8 Principal trade unions in the banking sector 6.9 Union density in the banking sector 6.10 Results of elections for Spanish works committee representatives, 1994 and 1996 7.1 Employment trends 7.2 Principal trade unions in central administration 7.3 Union density in central administration 7.4 Pay determination systems in central administration

45 47 54 57 57 57 59 60 62 68 70 72 106 107 108 109 114 140 140 140 144 145 145 147 150 152 153 186 187 190 192

Contributors

Teresa Lawlor, Head of the School of Languages, Kingston University, London. Rosario Morillo Balado, Sociologist, Gabinete Técnico Interfederal, Comisiones Obreras, Madrid. Manuel Pérez Yruela, Director, Instituto de Estudios Sociales Avanzados de Andalucía/CSIC, Córdoba. Mike Rigby, Principal Lecturer in Human Resource Management, South Bank University, London. Rafael Serrano del Rosal, Researcher, Instituto de Estudios Sociales Avanzados de Andalucía/CSIC, Córdoba. Roger Smith, Principal Lecturer in Employment Relations, South Bank University, London. Previously Lecturer in the Sociology Department, University of Essex, and for the Education Department of the GMB Trade Union.

Acknowledgements

The data which forms the basis of the empirical chapters of this book was collected as part of a project funded by Department DGV of the European Union. In addition the British Council provided funding to facilitate several of the meetings. The project was coordinated by the South Bank University (SBU), UK. Other collaborating institutions were: • Instituto de Estudios Sociales Avanzados/Consejo Superior de Investigaciones Científicas, Spain (IESA) • University of Roskilde, Denmark (UR) • Istituto Ricerche Economiche e Sociali, Italy (IRES) • Institut für Angewandte Wirtschaftsforschung, Germany (IAW). We are indebted to the following researchers from these institutions who collaborated in the project, helped to carry out the interviews with trade union representatives, and contributed to the production of the final report for DGV: Thomas Boje, Michael Kluth (UR), Mimmo Carrieri, Elena Bataglini, Francesca Bordone, Salvador Leonardi (IRES), Michael Mangold, Harald Pfeiffer, and Uwe Hochmuth (IAW). Mary Tuddenham provided indispensable support in putting together the different sections of the manuscript. Finally, the authors would like to thank all the trade union representatives who, through discussions and participation in interviews, made this book possible.

Abbreviations

In the compilation of this list some reference has been made to existing lists in Baglioni and Crouch 1990, and Ferner and Hyman 1998. ABI

Associazione Bancaria Italiana (banking employers’ association, Italy) AC Akademikernes Centralorganisation (central confederation of professional associations, Denmark) ACAS Advisory, Conciliation and Arbitration Service (UK) ACRI Associazione Italiana per il Credito e il Risparmio (savings banks employers’ organization, Italy) AEB Asociación Española de Banca Privada (private banking employers’ association, Spain) AEEU Amalgamated Engineering and Electrical Union (UK) AEU Amalgamated Engineering Union (UK) APEX Association of Professional, Executive, Clerical and Computer Staff (now part of GMB) (UK) APK Arbeitgeberverband des privaten Kreditgewerbes (private banking employers’ association, Germany) ASSICREDITO Associazione Sindacale fra le Aziende del Credito (banking employers’ organization, now merged with ABI, Italy) ASTMS Association of Scientific, Technical, Managerial and Supervisory Staff (UK) BDA Bundesvereinigung der Deutschen Arbeitgeberverbände (confederation of employers’ associations, Germany) BFAWU Bakers, Food and Allied Workers’ Union (UK) BIFU Banking, Insurance and Finance Union (UK) BRD Bundesrepublik Deutschland (Federal Republic of Germany) CC.OO Comisiones Obreras (Workers’ Commissions, Spain) CDU Christlich-Demokratische Union (Christian Democratic Union, Germany)

x

CEOE CESI CFDT CGIL CGM CIG CISL COBAS CGT CNT CO-Industry Confapi CPSA CRE CSIF CSU CSU DA DAG DBB DBL D-C DDR

Confederación Española de Organizaciones Empresariales (Confederation of Employers’ Associations, Spain) Confédération Européenne des Syndicats (European Confederation of Independent Trade Unions) Confédération Française Démocratique du Travail (French Democratic Labour Confederation, France) Confederazione Generale Italiana del Lavoro (Italian General Labour Confederation) Christliche Gewerkschaft Metall (Christian Engineering Union, Germany) Converxencia Intersindical Galega (Inter-union Confederation of Galicia, Spain) Confederazione Italiana Sindacati del Lavoratori (Italian Confederation of Workers’ Unions) Comitati di base (rank-and-file worker committees, Italy) Confédération Genérale du Travail (General Confederation of Labour, France) Confederación Nacional del Trabajo (National Workers’ Confederation, Spain) Industri Centralorganisationen af Industriansatte (union cartel of workers in manufacturing, formerly CO Metal, Denmark) Confederazione della Piccola e Media Industria (employers’ organization representing SMEs, Italy) Civil and Public Services Association (UK) Commission for Racial Equality (UK) Confederación Sindical Independiente de Funcionarios (Independent Union Confederation of Civil Servants, Spain) Christlich Sociale Union (Christian Social Union, Germany) Civil Service Union (UK) Dansk Arbejdsgiverforening (employers’ federation, Denmark) Deutsche Angestellten-Gewerkschaft (white collar union confederation, Germany) Deutscher Beamtenbund (civil servants’ union, Germany) National assocation of bank employees (Denmark) Dirstat-Confedir (autonomous central administration managers’ union, Italy) Deutsche Demokratische Republik (German Democratic Republic)

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DF DGB DRL DS EEPTU EFTA EIC EIRA ELA-STV

EPSU ETUC ETUI EU EWC FA FABI FALCRI FAT FAT-CISL FDA FDI FEBA Federmeccanica FEI FeS

Dansk Funktionaerforbund (union of clerical employees, Denmark) Deutscher Gewerkschaftsbund (trade union federation, Germany) National association of employees in building societies (Denmark) Savings banks’ association (Denmark) Electrical, Electronic, Telecommunication and Plumbing Union (UK) European Free Trade Association European Industry Committee European Industrial Relations Area Confederación Sindical Euzco Languillen AlkartasunaSolidaridad de Trabajadores Vascos (Basque nationalist union, Spain) European Federation of Public Sector Unions European Trade Union Confederation European Trade Union Institute European Union European Works Council Finanssektorens Arbejdsgiverforening (banking employers’ association, Denmark) Federazione Autonoma Bancari Italiani (autonomous banking federation, Italy) Federazione Autonoma Lavoratori Casse di Risparmio Italiane (autonomous savings bank federation, Italy) Federación Alimentícia y Tabacos (food and tobacco federation of UGT, Spain) Federazione Alimentazione e Tabacco (food and tobacco federation of CISL, Italy) Association of First Division Civil Servants (UK) Foreign direct investment Federación de Banca y Ahorros (banking federation of CC.OO, Spain) Engineering industry employers’ association, Italy Federation of Electronics Industries Federación de Servicios (services federation of UGT, Spain)

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FIBA-CISL FIM-CISL FIOM-CGIL FISAC-CGIL FITC FLAI-CGIL FO FP-CGIL FPI-CISL FSAP FSIABT FSP FTF GATT GHK GMB GTB HBV

HEO HK HRM IDS IG Metall ILO Intersind

Federazione Italiana Bancari Assicurativi (banking federation of CISL, Italy) Engineering federation of CISL (Italy) Engineering federation of CGIL (Italy) Federazione Italiana Sindacale Lavoratri Assicurazioni e Credito (banking federation of CGIL, Italy) Federación Independiente de Trabajadores de Crédito (Independent Federation of Credit Workers, Spain) Federazione Lavoratori Agro-Industria (agro-industry federation of CGIL, Italy) Force Ouvrière (Workers’ Strength, France) Funzione Pubblica (public administration federation of CGIL, Italy) Federazione Pubblico Impiego (public administration federation of CISL, Italy) Federación Sindical de Administración Pública (public administration federation of CC.OO, Spain) Federación Sindical de las Industrias de Alimentación, Bebidas y Tabacos (food, drink, and tobacco federation of CC.OO, Spain) Federación de Servicios Públicos (public services federation of UGT, Spain) Funktionaerernes og Tienestemaendenes (central confederation of salaried employees, Denmark) General Agreement on Tariffs and Trade Wood and plastics union (Germany) General, Municipal and Boilermakers’ Union (UK) Textile union (Germany) Gewerkschaft Handel Banken und Versicherungen (union for employees in banking, insurance, wholesale and retail trade, Germany) Higher executive officer Handels og Kontorfunktionaerernes Forbund i Danmark (union of commercial and clerical employees, Denmark) Human resource management Incomes Data Services Industriegewerkschaft Metall (metalworkers’ union, Germany) International Labour Organization Associazione Sindacale Intersind (employers’ association for public sector enterprises, Italy)

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IPD IPMS IRSF ISTAT JIC JIT KAD LGU LO MEP MSF NAG NGG NHS NIDIL NNF NUCPS NUI NWSA OECD ÖTV PA-UIL PCE PCS PDS PNV PRP PSI PSI PSOE PSV

Institute of Personnel and Development (UK) Institute of Professionals, Managers and Specialists (UK) Inland Revenue Staff Federation (UK) Istituto Nazionale di Statistica (National Statistics Institute, Italy) Joint Industrial Council Just in time Kvindeligt Arbejderforbund i Danmark (union of women workers, Denmark) Lloyds Group Union (UK) Landsorganisation i Danmark (federation of trade unions, Denmark) Member of the European Parliament Manufacturing, Science and Finance Union (UK) National Australia Group Gewerkschaft Nahrung, Genuss, Gaststätten (union of food, semi-luxury foods, and restaurants, Germany) National Health Service (UK) Nuove Identità del Lavoro (New Work Identity, Italy) Food, drink, and tobacco union (Denmark) National Union of Civil and Public Servants (UK) National Union of Insurance Workers (UK) NatWest Bank Staff Association (UK) Organization for Economic Cooperation and Development Öffentliche Dienste, Transport und Verkehr (public services and transport workers’ union, Germany) Pubblica Administrazione (public administration federation of UIL, Italy) Partido Comunista Español (Spanish Communist Party) Public and Commercial Services Union (UK) Party for Democratic Socialism (Germany) Partido Nacionalista Vasco (Basque Nationalist Party, Spain) Performance-related pay Partito Socialista Italiano (Italian Socialist Party) Public Services International Partido Socialista Obrero Español (Spanish Socialist Party) Promoción Social de Viviendas (housing cooperative, Spain)

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PTC R&D RSA RSU SCPS SDC SEA SIC SiD SMEs SPD TASS TGWU TNE TQM TUC TUPE UGT UIB-UIL UIL UILA-UIL UILM-UIL UNICE UNiFI USDAW USO WIRS WTO

Public Service, Tax and Commerce Union (UK) Research and development Rappresentanza Sindacale Aziendale (Workplace Union Representation, Italy) Rappresentanza Sindacale Unitaria (Unitary Workplace Union Representation, Italy) Society of Civil and Public Servants (UK) Savings banks’ computer centre, Denmark Single European Act Standard Industrial Classification of Economic Activities Specialarbejderforbundet i Danmark (general workers' union, Denmark) Small and medium-sized enterprises Sozialdemokratische Partei Deutschlands (German Social Democratic Party) Technical, Administrative and Supervising Staffs Union (UK) Transport and General Workers’ Union (UK) Transnational enterprises Total quality management Trades Union Congress (UK) Transfer of Undertakings Protection of Employment Regulations Union General de Trabajadores (general workers’ union, Spain) Unione Italiana Bancari (banking union of UIL, Italy) Unione Italiana dei Lavoratori (workers’ union, Italy) Unione Italiana Lavoratori Agro-alimentare (agro-food union of UIL, Italy) Engineering federation of UIL (Italy) Union des Confédérations de l’Industrie et des Employeurs d’Europe (European employers’ confederation) Union in Finance (Barclays Bank employees’ union, UK) Union of Shop, Distributive and Allied Workers (UK) Union Sindical Obrera (workers’ trade union confederation, Spain) Workplace Industrial Relations Survey World Trade Organization

Introduction

During the last two decades, trade unions in the European Union have faced an increasingly hostile environment, conditioned by growing globalization and structural changes in the contemporary European economies. This book considers the problems this new environment poses for trade unions and, in particular, the responses they have been developing to these problems. In this respect the book is seeking to correct the relative lack of attention paid to the intentions of actors in industrial relations in current literature, which has tended to focus more on the outcomes of industrial relations systems. Data is presented on trade union responses in five countries. In each country the same four industrial sectors are studied.1 In considering the responses of the unions, we seek to contribute to debate on two issues. First, we attempt to make links with the discussion on the degree of convergence to be found in European industrial relations systems. Chapter 1 summarizes this discussion in current academic literature and subsequent chapters refer back to it. We examine the convergence in union responses and relate it to the cultural and economic environment in which they are operating. Our interest in convergence issues informed the choice of countries for the study. We were concerned to select cases which reflected the most important, distinct industrial relation tendencies within Europe. To this end, the countries included in the study were Denmark, Italy, Spain, Germany, and the UK. Denmark represents the Nordic model with a high degree of stability, strong trade union structures, and institutional support. At the other extreme is the UK, with a trade union movement enjoying little institutional and legal support, disadvantaged by multi-unionism, and located in a quite exposed economy. In the case of Spain, a degree of institutional support for collective bargaining, and relatively centralized trade unions, has to be balanced against the difficulties posed by a small-firm-dominated economy and a history of trade union division. Germany and Italy have been presented as examples of industrial relations systems which have adapted relatively successfully to the changing environments of the 1980s and 1990s. Both enjoy strong institutional support for collective bargaining and their economies (for different reasons) have not, until recently, come under as much competitive pressure as those of Spain and the UK. Additionally, the structure of the German trade union movement has long been seen as a model of coherence and consistency to be copied by movements in

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other countries. Subsequently, Chapter 3 examines the industrial relations contexts which these five countries provided for the study. Second, we are interested in the strategic nature of union responses and the degree to which they concur with the models put forward by other writers. Chapter 2 reviews the academic literature in relation to these issues, and this also influenced the choice of industrial sectors for the study. Sectors were selected which reflected different industrial relations traditions, and degrees of market exposure, which we felt were likely to shape the nature of the trade union response. Thus two service sectors, banking and central government administration, and two manufacturing sectors, electronics and food manufacturing were studied. Electronics and central government administration represent the two extremes of market exposure. The sectoral focus, we believe, usefully supplements other contemporary literature in the field which tends to adopt a national, and therefore more generalized, level of analysis. The examination of trade union responses in the four sectors can be found in Chapters 4 to 7. Each of these chapters follows a similar structure. They begin with an examination of the sectoral context in which industrial relations are located, covering issues such as the market environment and management strategies. There is then a consideration of the pattern of industrial relations in the sector and the major problems faced by the trade unions. Finally, there is a discussion of the responses of the trade unions in the sector. This discussion is structured according to the five areas identified in Chapter 2: relations with employers, bargaining agenda, political relations, relations with members, and supranational activity. The empirical data on trade union responses was largely derived from a series of semi-structured interviews carried out with trade union representatives in each of the countries and sectors included in the study. The first phase of these interviews took place during 1995–96. Interviews were carried out with 203 trade union representatives at national, regional, and enterprise level. It was felt important not to concentrate solely on national representatives. An important criterion for evaluating the strategic nature of trade union responses was the extent to which they were embedded in and identified with throughout the organization (an issue which is further developed in Chapter 2). A second, more limited phase of forty interviews took place during 1997–98. The second phase covered mainly, but not exclusively, national representatives. Its purpose, apart from monitoring any changes which had occurred in the two years which had elapsed since the first phase, was to test the reaction of representatives to the conclusions which had been drawn from the initial set of interviews. The number of interviews undertaken in each country was determined by the need to reflect the views of various elements of the trade union constituency, i.e. the different industrial sectors, the various levels of the union structure, and the most representative unions. The duration of the interviews was between one and two hours. The interview data was supplemented by material from relevant documentation and literature (from both trade union and academic sources) and this is reflected in the discussions to be found in Chapters 4 to 7. In

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addition, in each sector a limited number of interviews were carried out with human resource managers to provide some control for the union data. The final chapter develops conclusions which relate to the debates on convergence/divergence and the strategic nature of trade union responses. The tentative nature of these conclusions must be emphasized. The trade unions studied in this project were all engaged in a process of considerable change and many of the responses noted were very much at the developmental stage. This emphasizes the need to continue monitoring how trade unions are reacting to the very different environment that they face at the end of the twentieth century. Notes 1 Previous publications have dealt with more partial analysis of the data (Rigby and Serrano del Rosal 1997; Rigby et al. 1998; Rigby and Smith 1999).

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1 The convergence/divergence debate in comparative industrial relations Roger Smith

In this first chapter, it is necessary to give the reader an overview of the main conceptual approaches and theoretical disputes that the study of comparative industrial relations has produced, so that the references to these issues in subsequent chapters may be understood more fully. Largely, the discussion will centre on the tension between those forces which have historically been seen to produce variety and difference in the structures and operations of industrial relations systems and trade unions, and those forces which have, in the more recent past, been identified as generating pressures towards similarity. This fundamental difference in the way in which the future trajectories of industrial relations systems are seen to develop is what has become commonly known as the convergence/divergence debate. Divergencies: the power of national context Though trade unionism has been shown by historical studies to emerge as a significant social force at a similar stage of industrialization of different countries, the structures and forms which emergent labour movements took have been seen to differ widely. This variation has been explained by reference to the distinct cultural, social, and political contexts within which they emerged. Thus, Freeman (1994:15) concludes that, ‘Trade unions are probably the most idiosyncratic institution in modern capitalism. Each country’s union movement has a distinct structure and mode of operating, in part due to its unique historical development’. Having arisen in a distinct context, and having developed as part of a web of interlocking institutions and national preferences, these systems are seen as protected from external pressures to change. The range of differences that have been identified between systems is considerable. If one goes back to the emergence of unions, Hollinshead and Leat (1995) suggest that there are three distinct orientations discernible, relating to the nature of their basic aims. These orientations have been seen as relatively persistent over time. The distinctions they identify relate to what they term as welfare unions, business unions, and social partners. Welfare unions are seen as having broad, often revolutionary, social and political objectives; they organize on the basis of class interests and consciousness, have strong political beliefs and affiliations, use social mobilization rather than collective

2 EUROPEAN TRADE UNIONS

bargaining as an approach, and seek to use industrial and political pressure to achieve gains in terms of legislation and progressive social policy for the working class as a whole. Often, little emphasis has been placed by unions of this kind on the development of bargaining relations and organization at the individual workplace level. Examples of this approach are seen in the unions of France, Italy, and Spain. Business unions, on the other hand, tend to identify their interests more strongly with the success of the enterprise, and in that sense tend more clearly to espouse business interests. They thus focus their activities pragmatically on benefits and services for their members in the workplace, rather than being ideologically organized around class interests and attempting to make gains for a wider constituency through political action. They make extensive use of collective bargaining, and their use of the strike weapon is narrowly focused on the attainment of workplace gains rather than on the achievement of broader political aims. Unions in Japan and the US are seen to exemplify this model of trade unionism. Social partners come between the two above extremes. Whilst they are genuine trade unions in that they attempt to improve the conditions of their members, their emphasis has been neither on workplace activity nor on societal transformation through political activity. Instead, they have concentrated on operating at strategic political and industrial levels to develop a consensual approach with the other main industrial relations actors—employers and the state. Thus, they see their interests as broadly compatible with national social and political objectives, and pursue these interests through a strongly established network of tripartite institutions that facilitate discussion and participation at national level. They are characteristic of strongly established social democratic political systems, as in Scandinavia and Germany. Strong parallels can be seen between this model and the paradigm that stands behind attempts to create a ‘Social Europe’ through the institutions of the European Union. The explanation for these profound differences between emergent labour organizations is to be found in the specific contexts within which they originated. The various complex and inter-related factors which gave rise to the differences include: government attitudes to unionism; employer attitudes to unionism; cultural characteristics (e.g. the degree of belief in egalitarianism in the surrounding society); the nature of social homogeneity/heterogeneity; the level of general prosperity; the historical proximity of feudalistic social structures to the emergence of industrialization; the pace of technological change (Hollinshead and Leat 1995). Focusing more narrowly on Europe, Due et al. (1991) identify radically different models of state involvement in industrial relations systems. They describe the Roman-Germanic, Anglo-Irish, and Nordic models. The Roman-Germanic model is characteristic of the systems in Germany, France, Belgium, Luxembourg, the Netherlands, Italy, and Greece, where the state plays a central role. There is extensive legislation and labour market regulation. Fundamental rights and obligations (including the rights to join and be represented by a trade union and to collective bargaining) are enshrined in the constitutions and statutes of these countries.

THE CONVERGENCE/DIVERGENCE DEBATE 3

In the Anglo-Irish model, where an essentially voluntarist model prevails, the state has historically played a very limited role in labour market and industrial relations regulation, leaving these issues to be decided upon by voluntary agreement. There is as a result a lower level of legislated employment rights than is common in other European countries. In the Nordic model, relating to Sweden and Denmark, strong systems of joint regulation between employers’ organizations and union federations have developed. These are formalized in semi-permanent national agreements and consultative arrangements. The state, however, has a limited direct role in the industrial relations system, and there is relatively little labour market regulation, though extensive welfare provision. In addition to the differences between unions’ basic orientations, and states’ involvement in industrial relations systems, extensive differences in the patterns of collective bargaining between countries have also been identified. Thus Bean (1994), whilst acknowledging some recent trends towards decentralization on a global basis, distinguishes three patterns of bargaining structure, differentiated on the basis of the most significant level at which bargaining takes place within different countries. He identifies three modal patterns—industry-wide, economy-wide, and single enterprise. Industry-wide multi-employer bargaining, generally conducted between employers’ associations and national trade union representatives and concentrated on wage-related issues, has tended to be the most common pattern for Europe. However, economy-wide systems, where national employers’ and union federations are the bargaining partners, and the agreements reached then set limits to any industry-wide bargaining which takes place, have been characteristic of Sweden, Norway, Denmark, Finland, Austria, Switzerland, and at one stage the Netherlands. Enterprise bargaining has been typical of systems in Japan and the US, though recently this has become more characteristic of the UK. Whilst Bean recognizes that there are economic factors which have conditioned the emergence of particular predominant systems (such as the need of employers to take wage costs out of competition in labour-intensive industries), his major explanation of these differences is the preferences of the major actors within the industrial relations system. Other researchers, rather than focusing on basic orientations or structural differences, have attempted classifications based on more dynamic and empirical investigations of trade unions’ responses to change in the economic climate. Gourevitch et al. (1984), in their study of union reactions to the deteriorated economic situation of the 1970s and early 1980s, identify four patterns of response. Maximalists concentrated on intense left-wing oppositionalism to change via mass social mobilization. The pattern was most clearly demonstrated by France. Interventionists used intervention and cooperation at organizational and sectoral levels to develop gradual policies of adjustment, with protection for union members. Italian, and some US unions exemplified this. Defensives capitalized on rank-and-file conservatism and opposition to change to gain short-term protection. The UK was the best example of this. Finally, corporatists developed collaboration with employers and the state on income policies and social programmes, with the

4 EUROPEAN TRADE UNIONS

intention of developing employee security and openness to change. Sweden and Germany were the clearest examples of this approach. With few exceptions, then, the development of academic research and writing on comparative industrial relations and trade unionism has tended to stress variation, and to focus on the differences between national systems. Apart from the differences identified in the models discussed above, wide differences in the detail of industrial relations systems have also been pointed to. Such differences have been identified in terms of the massive variation in union membership levels (varying from 9 per cent to 90 per cent even within Europe), in the proportion of the workforce covered by collective bargaining agreements, in the structure of the trade unions (whether based on craft, industry, or general unions), in the forms and rates of industrial conflict, and in the form and role of employee participation systems (Sparrow and Hiltrop 1994). All these differences are seen as the product of distinct national contexts, developed over a relatively long period of time, and thus embedding an industrial relations system within a complex of institutions and shared understandings which render them less easily susceptible to change. Whilst attempts have been made to identify patterns of similarity, and to develop ideal-typical models which group together different national systems, what emerges is non-inclusiveness, overlap, and contradiction. What tends to be stressed is continuing diversity, and the lack of any clear developmental path which unions in general can be seen to be following. Convergence: the power of economic integration Whilst the dominant trend in the comparative study of trade unionism and industrial relations has been as described above, there have been ambitious attempts to outline general theories which place the development of these institutions within a more evolutionary framework. The general thrust of these approaches has been to argue in favour of a convergence of systems as the result of growing similarities in the product market and technological contexts within which those systems operate. Dunlop’s (1958) groundbreaking attempt to theorize industrial relations systems laid the foundations for this exercise. He proposed that the major characteristics of these systems are determined by factors external to the labour market: first, the technological characteristics of the workplace, which determine the kind of skills needed; second, the market constraints, which face the management and workforce, and set the limits within which they must operate; and, finally, the distribu tion of power in the surrounding society, which affects the extent to which the system is centralized or decentralized, and the nature of interventions in the process. As the industrialization process proceeds, Dunlop argues that these factors will become more similar as a result of the internationalization of economic activity and technology transfer, and thus that there will be pressure on industrial relations systems to become more similar. The analysis was developed by Kerr et al. (1973) in Industrialism and Industrial Man. The book was initially an attempt to explain the connection between industrialization and the pattern of worker protest that accompanied it. However,

THE CONVERGENCE/DIVERGENCE DEBATE 5

the authors soon concluded that levels of protest declined as industrialization proceeded, and that ‘the protest of today is more in favour of industrialization than against it’ (ibid.: 34). The more important trend they claimed was the progressive patterning of the relationship between employees and managers as industrialization proceeded, with the resultant complex web of rules progressively binding the worker to job and workplace. ‘Not the handling of protest, but the structuring of the labour force is the labour problem in economic development’ (ibid.: 35). The role of trade unions as vehicles of social protest and political challenge is then seen to be declining in favour of a more technicist role in negotiating rules with management. This led the authors to conclude that the role of ideologies and dominant personalities was less important than economic trends that were universal. Moreover, the role of ideology in framing relationships in the industrial relations arena would progressively give way to a more rational method of decision making which would remove ideological elements, at both national and enterprise levels, from the process. The predominant response of European academics to these views has been negative, partly because they were linked to American structural-functionalist and evolutionary sociological theories, and thus seen as inherently conservative. Indeed, though the two works cited above have their focus on the nature of relations in the workplace, they both form part of a much wider argument about the future direction of political systems, within which the natural dominance of the liberal capitalist system is seen as inevitable. This argument has been variously referred to as the ‘logic of industrialism’, ‘the end of ideology’, the ‘institutionalization of conflict’, and the ‘embourgeoisement of the working class’. Dominant European social science approaches, more strongly influenced by Marxism, and containing a much stronger emphasis on social criticism and social transformation, took a radically different view of these projected political trajectories. Those scholars most concerned with industrial relations argued strongly against the likelihood of any significant convergence in this area. The unique and complex historical development of different national systems, the cultural heritage of different nation states, and the importance of the actions and strategic choices of governments and other important actors in determining structures and outcomes for industrial relations systems, were all emphasized as standing in the way of convergence (Poole 1986). In this view, economic determinism, resulting from the growth of industrialization and the more recent development of globalization, is rejected in favour of the significance of strategic choices, exercised by actors responding to similar economic, political, and technological conditions. However, paradoxically, though the consensus among academic analysts in Europe has been strongly to resist notions of similarity and convergence developing at present or in the future, and to stress instead the considerable empirical differences between industrial relations systems, the benefit of hindsight has enabled widespread agreement to emerge with regard to similarities which have defined broad periods in the post-war past, particularly in Europe. These periods can be described as follows.

6 EUROPEAN TRADE UNIONS

State sponsorship of unions

The period from the end of the Second World War until the early 1960s saw the general strengthening of trade unions and collective bargaining institutions across Europe, encouraged by governments of widely different political persuasions. This official sponsorship of attempts to institutionalize trade union power was seen as a reward for the generally positive contributions made by the unions to the war effort (Clarke 1993). Notwithstanding fears that the unions might use the dislocations of war to pursue their own anti-capitalist agendas, the unions had demonstrated their over-riding loyalty to their own governments. And in the defeated countries, there was recognition of the role they could play in the construction of pluralist liberal democracies. Government policy towards the unions in Europe became overwhelmingly positive, and there was a tendency towards centralization in the industrial relations systems, which strengthened union leaderships. Relative industrial peace broadly characterized the period, living standards rose, and welfare states were developed, giving rise to widespread predictions about the ‘withering away of the strike’, and a less ideologically motivated model of trade unionism. The revolt from below

The late 1960s and early 1970s witnessed the demise of this ‘institutionalization of conflict’. The period was characterized by widespread outbursts of industrial conflict and rank-and-file militancy, even in cooperative systems like Germany and Sweden (Crouch and Pizzorno 1978). Regini (1992) suggests that the explanation for this lies in an internal ‘crisis of representation’ within the unions, with severe tensions developing between union leaderships and their members. In essence, union leaderships and structures, conditioned by the centralism encouraged in the previous era, had failed to recognize external changes in product and labour markets that were changing the situation within which they were operating. Regini cites three factors that together produced this crisis. First, the rationalizations at shopfloor level, especially in the manufacturing industries, as a result of the consolidation of Fordist production methods. This involved job fragmentation, the intensification of work effort, and the relentless search for higher productivity, and clashed with the raised expectations of a much better educated workforce. Second, there were internal and external migrations of workers to do the least satisfying jobs, who were unused to the routines and disciplines of industrial life and were often from cultures very different from the indigenous workforce. Unions often represented these new workers badly, if at all. Finally, there was the emergence of new groups of white collar and technical staff as a result of the changing occupational structure. These groups were articulate and confident, produced new strategies for challenging employers, and raised new demands within the unions. The most significant qualitative difference in the nature of the new demands was for more say in the running of enterprises, a plea for democratization which would have implications also for the internal organization of the trade unions (Clarke 1993).

THE CONVERGENCE/DIVERGENCE DEBATE 7

Neo-corporatism or concertation

The 1970s were a period of dramatic restructuring in terms of global economic development, resulting in the gradual loss of competitive advantage in the advanced industrial countries. Increased energy costs as a result of the oil-shocks of the early 1970s, increased raw materials costs, and heightened international competition forced firms to cut costs and increase productivity. The compromise between capital and labour that had characterized much of the post-war period was put under severe strain. Constantly rising living standards in return for productivity gains, and everexpanding welfare state expenditure, produced serious inflationary pressures which governments had to control. The success of collective union mobilizations of the previous period, and the threats to political stability which they were perceived to present, led governments to attempt to strike bargains with union movements rather than directly to confront them. Such an approach has been described by Panitch (1980:173) as a system which ‘integrates organised socio-economic producer groups through a system of representation and co-operative mutual interaction at the leadership level and mobilisation and social control at the mass level’. Unwilling to abandon the post-war consensus on the maintenance of full employment and welfare states, attempts were made to institutionalize union power at a societal level by drawing union movements into centralized national pacts with governments, through which wage restraint and cooperation in productivity measures by the unions were traded for lower unemployment and the protection of the welfare state. Recent developments in the trade union context Given the relative ease with which the periods of similarity referred to above have been identified, it is important to examine common developments in the current context of trade unionism to see whether a dominant trend is identifiable in a similar way. The past decade has witnessed two trends in Europe, which have encouraged a reassessment of the tendencies to convergence. The first of these is the identification of a practically universal tendency towards trade union decline; the second is the tendency, as a result of deliberate policy within the European Union, towards integration and harmonization of labour market policies. Trade union decline The 1980s and 1990s have seen the emergence of significant similarities in the fortunes of the trade unions in Europe. Official statistics have demonstrated falling union membership levels generally (but not comprehensively) across Europe; there have been declining rates of strike activity; there has been a tendency towards the decentralization of collective bargaining structures; employer pressures towards workforce flexibilization have been widespread; and there has been a weakening of political influence. Evidence of decline has been undeniable (Visser 1994; Deery 1995; Hollinshead and Leat 1995). Though it is important not to see such issues as conclusive, these facts have provoked widespread discussion about a ‘crisis’ for the

8 EUROPEAN TRADE UNIONS

trade unions. Thus, Teague and Grahl (1992) for instance conclude that, ‘To varying degrees in different countries, trade unionism has been on the retreat throughout Western Europe for the past ten years.’ What is agreed by commentators is that the 1980s marked a shift into a new politico-economic phase in the advanced economies, and that the implications of this change were extremely serious for the trade unions (Baglioni and Crouch 1990; Regini 1992; Bamber and Lansbury 1993). Explanations for decline have tended to focus on economic and technological factors external to the trade unions and industrial relations systems. Thus, Lecher (1994:87) concludes that, ‘The main current and future challenge to the trade unions is to be found in structural transformation and internationalisation.’ Explanation of the dominant contextual trends which have led to these difficulties for the trade unions have included tertiarization of the structure of industry (Ferner and Hyman 1992), the globalization of economic activity (Sparrow and Hiltrop 1994), post-Fordism (Teague and Grahl 1992), and the withdrawal of the state from tripartite and corporatist arrangements (Streeck 1992). It is to a more detailed exploration of these issues that we now turn. Tertiarization Structural shifts in industry and the composition of the workforce which have taken place in Europe since the end of the Second World War were accelerated by the recession of the early 1980s. In the advanced industrial countries the agricultural sector had been in decline since the beginning of the century. Progressively, the extractive and heavy manufacturing industries had also become less important. These shifts now took place at an increasing rate, and the balance between the manufacturing sector as a whole and the growing service sector became more marked. Thus, industries which had been responsible for the original emergence of trade unions employed a progressively declining proportion of the workforce. These industries had historically demonstrated a high propensity to unionization, and unions within them were often dominant in national union federations and in maintaining strong links with political parties. Although union membership rates vary widely in Europe, as we have seen, in all countries unions have found it difficult to maintain unionization rates within the tertiary sector, and particularly in the private services sector. Sociological and physical factors affecting the context of work are clearly important here. White collar work is less obviously arduous and hazardous, so that physical exploitation may appear less. A greater degree of social and educational homogeneity between managers and managed is likely, so that lower social distance and the existence of career ladders may be more apparent. However, the most significant variable in explaining different unionization rates between industrial and service workers appears to reside in plant size. As the thrust to tertiarization has proceeded, we have witnessed a significant decline in the size of the average workplace, and union density rates have been shown to correlate closely with plant size. Not only do the

THE CONVERGENCE/DIVERGENCE DEBATE 9

kind of sociological variables discussed above come into play, in terms of propensity to join a union, but from a practical point of view it is much easier and cheaper for unions to organize a single 1,000-worker plant than 100 plants with only ten workers each. Even where these new groups have been unionized, Visser (1994) argues that there was a resultant weakening of national trade union centres—‘interest aggregation within central organizations of labour became a much more strenuous task’. His argument is that the different interests and bargaining priorities within these groups made it difficult for union federations to organize their constituent unions around a coherent strategy. This tendency is exacerbated for some by the growing strength of white collar public sector unions. Thus, whereas Kelly (1988) sees these groupings ultimately becoming leaders of a newly radicalized trade union movement, Teague and Grahl (1992) more pessimistically see public sector unions, insulated from market competition, becoming increasingly out of step with private sector unions who have been forced into much more pragmatic strategies. Another result of tertiarization has been the production of large numbers of the structurally unemployed. Potential employees with low educational and skill levels, and redundant workers whose skills have become obsolete in a work-world which has become increasingly typified by a dependence on mental, rather than physical, skills are at risk of becoming a permanently unemployed underclass. Rising unemployment during the 1980s, and the apparent inability of the unions to do much about this, did little to increase their attractiveness to would-be recruits. Ferner and Hyman (1992) claim that there is no clear connection between unemployment and union decline, arguing that much of it has fallen on the young and those who remain in work retain much of their bargaining power. This, however, would seem a short-sighted argument in view of the rising age structure of union memberships, and the much lower propensity of the young to join in the same proportions as their parents’ generation. Globalization In the post-war years the older industrialized economies gradually lost their competitive advantage as other regions began to industrialize. The recession of the early 1980s marked a significant turning point for the world economy as globalization of production became entrenched in a growing number of sectors. The global economy came to be increasingly dominated by transnational companies which spread their production facilities around the world in an attempt to exploit emergent markets, cut transport costs, and, in some cases, to exploit labour forces which were not only cheaper, but also often had fewer employment rights and weaker or non-existent trade unions. The Pacific Rim, South Africa, Latin America, and eventually Eastern Europe became attractive to transnationals, and jobs began to disappear from the advanced industrial economies of North America and Europe to production facilities elsewhere in the world. This development gave rise to what has been called the ‘new international division of labour’, with heavy industrial

10 EUROPEAN TRADE UNIONS

production and extraction moving gradually away from the old industrial centres. The growth of transnationals, and the tremendous economic power which they may yield, significantly eroded the relevance of national borders, and weakened the ability of governments and firms in a single country to insulate themselves from external influences. Moreover, the impact of globalization in increasing competitive pressures on enterprises of all sizes has tended to harden management attitudes and approaches to trade unions. Though market factors have been the predominant influence in producing these economic and industrial shifts, they have been greatly facilitated by technological developments which have increased the flexibility with which transnationals can operate. Developments in information processing and dissemination as a result of computer networks now mean that corporate decision makers can much more easily develop and implement global production strategies. Moreover, this facilitates the relocation of power to the centre, with local managers having little real decisionmaking power and little discretion to negotiate freely with local trade unions. The centralization of transnational power, and the capacity not only to act easily across national boundaries but also to play off one national workforce against another, has not been matched by similar developments on the union side. Bamber and Lansbury’s review of international trade union organization concludes that, ‘the labour movement has found it extremely difficult to exercise much influence over the activities of multinationals’ (1993:264). Problems of nationalism and cultural difference have proved difficult for the unions to overcome in terms of building international strategies for dealing with transnationals. Moreover, longstanding ideological splits in the structure of the international trade union movement, between communist and anti-communist world federations (only recently formally removed at the level of organizational structures), have left a legacy of distrust in parts of the newly industrialized world where they had competed for dominance (Thompson and Larson 1978; Bendiner 1987). Despite the best efforts of international union organizations, responses from national unions with regard to transnational restructuring have remained predominantly national in character, which has meant that the companies have been able to use the threat of relocation in order to achieve work flexibility and cost cutting. These weaknesses are reinforced by the free-trade policies pursued by global economic actors like the World Trade Organization (WTO) and the World Bank, and by the willingness of some national governments to create labour conditions favourable to inward investors. The efforts of the International Labour Organization (ILO) to generate labour codes to cover the activities of transnationals operating in those parts of the world where labour protections are few have met with limited effect. The foregoing problems for labour generated by the process of globalization have led to widespread fears in Europe about the ‘social dumping’ of well-organized, protected, and highly paid groups of workers in favour of those more easily exploited. These concerns, indeed, gave rise to the as yet largely unsuccessful attempt to create a set of protectionist employment rights and standards across the European

THE CONVERGENCE/DIVERGENCE DEBATE 11

Union as part of the creation of the single European market. The relative stagnation of the ‘Northern’ economies, rapid economic growth in other parts of the world, set alongside the internal migration of capital in economies like the US to less unionized regions, have been seen by some to signal the end of strongly organized labour. Post-Fordism Increased competitive pressures at the beginning of the 1980s gave rise to the spread of what have become known as post-Fordist production methods, often introduced alongside new techniques of human resource management. This represented a shift away from a ‘Fordist’ production paradigm of mass production, with extreme divisions of labour, deskilling, and close supervision, to ‘flexibility’, ‘responsible autonomy’, and the extensive use of new technologies. National collective bargaining frameworks, weak at achieving rapid change at local level, were strongly undermined by this process, and there resulted a significant shift towards the level of the workplace as a focus of much industrial relations activity. Thus there tended to be either a decentralization of collective bargaining structures, or a strengthening or elaboration of workplace-level consultation structures (like works councils), in order to achieve the necessary labour flexibility. Local management, rather than employers’ organizations or the state, became the key actor in the negotiation of change, and the results have tended to produce a generally more cooperative and pragmatic form of trade unionism with a ‘productivist’ (Streeck 1992) orientation. This process has been seen to weaken unions as a result of the localization of attention, leading to more sectional concerns and the so-called ‘disaggregation of the working class’ (Hyman 1992). The development by unions of cooperative productivist pacts with management is feared to lead ultimately to the gradual disappearance of a distinctive union perspective and role, and instead to members developing a unitarist view of shared interest with management. In parallel with this development has been a change in the nature of management techniques. Management has developed new strategic initiatives, often embodied within the development of human resource management, in the pursuit of increased competitiveness. These include the development of task flexibility and the improvement of product quality through mechanisms like quality circles and total quality management (TQM). Various mechanisms to improve communications with employees, and to increase their sense of involvement and participation have been developed, alongside attempts to individualize the employment relationship through performance appraisal and performance-related pay. All these initiatives have been aimed at increasing worker identification with, and commitment to, their work organization, and have been feared by unions as weakening their capacity to develop strong union consciousness and action. Moreover, the flexible workforces created by the new production paradigm tend to consist of relatively fewer full-time and permanent employees, which are groups on which unions in the past have tended to concentrate their recruitment efforts,

12 EUROPEAN TRADE UNIONS

because such members have proved more easy to retain. The growing numerically flexible, peripheral workforce of part-time, subcontracted, agency, and fixed-contract workers have proved generally much more difficult for unions to draw into stable membership (Teague and Grahl 1992). The failure of concertation Attempts in the 1970s to produce stable social pacts between governments and union movements led broadly to failure and resulted in a distancing by political parties from the unions. The ultimate inability of the unions to deliver rank-and-file support for wage restraint challenged their claim to representativeness of the workforce as a whole. Moreover, as Streeck (1992) argues, concertation, with respect to the institutions involved in it, assumed the major cause of social cleavage to be on class lines—between labour and capital. However, the 1970s had seen the emergence of radically new social-protest movements (feminists, environmentalists, consumer interest groups, and ethnic minority groups), which were not only organically disconnected from the trade unions, but also often identified them as part of the problem with which they had to deal. This development marked a shift from class-based cleavage, which further weakened the unions’ position as key socioeconomic representatives articulating the concerns of the workforce. Touraine (1992) identified this shift as symptomatic of the post-industrial society into which we are moving, where labour movements will wither away and be replaced by other, more fragmented and temporary, social-protest movements. The failure of unions to think about strategies for dealing with new interest groups who are potential union members, but who may have different motivations for membership, and different expectations of involvement, reinforced this view of declining representativeness (Ferner and Hyman 1992). The continuing widespread failure of unions to recruit the young in the same proportions as older generations (a problem which exists in Sweden, the country which has had the greatest success in maintaining overall union membership levels, as well as in those countries where decline has been most dramatic) tends to lend continuing credence to this view. The significance which governments and political parties need to give to unions as key political actors has tended to be weakened as a result. By the early 1980s, concertation at national level had all but disappeared, and was not the main goal of unions in most countries. This was true even in France, which had a government at the time that was extremely supportive of unions. Only in Spain was a form of concertation, intended to consolidate the new democracy, still strong; here it became weaker later, in the mid-1980s. Trade union density remained strong throughout this period, and unions began to be identified as a: constraint on the choice among different policy options facing employers and governments as they responded to the double challenge of rising inflation coupled with growing recession and unemployment. In the absence of better alternatives, in many countries, these actors came to regard the participation of

THE CONVERGENCE/DIVERGENCE DEBATE 13

trade unions in the management of economic policies as a second-best solution. (Regini 1992:5) The impact of the social programme of the European Union Though the arguments for greater European economic integration which resulted in the Single European Act (SEA) of 1987 were unambiguously economic, it was recognized in the economic analysis that there would be profound labour market implications, not least in the displacement of employment (Ceccini 1988). The Germans in particular were concerned that the freer movement of capital facilitated by the SEA might result in an outflow of jobs to low-wage countries within Europe. Mindful of the implications of this for social solidarity, the then President of the European Commission, Jacques Delors, proposed that, parallel to economic harmonization, a programme of harmonization of employment and social protection should also take place, so that differential labour and social costs between the countries of the European Community (EC) should not result in social dumping. Given the importance granted to the trade unions as ‘social partners’ within EC institutions, this programme was seen as necessary to assuage fears that unions might have about any deleterious consequences of growing economic union, and keep them and their members generally supportive of the project. Thus within the EU there has been a deliberate project to create labour market convergences, firstly through the Social Charter, and latterly through the Social Chapter of the 1991 Treaty of Maastricht. This was described by Bridgford and Stirling as ‘a significant body of social legislation and informal rules, thus reinforcing the view that a Europeanization of employee relations is slowly taking place’ (1994:83). The implication of this was that the EU was seeking to develop a Europeanized model of employment protection as an alternative to the deregulated, free-market model which was being promoted by the US and many emergent industrializing countries, particularly on the Pacific Rim. The programme contained policies on information and participation rights for employees, rights to training, health and safety protection, protection of atypical workers, restrictions on hours of work, and rights for trade unions to be consulted by EU institutions on strategic issues. In addition, harmonization of various social welfare protections was also proposed (Hantrais 1995). Linked with the above, and connected more directly with industrial relations policy and practice, was the attempt by the Commission to create a European Industrial Relations Area (EIRA), involving a legal framework of harmonized employment protection, and the attempt to create strategic consensus on key employment issues among the social partners through a process of ‘social dialogue’ (Teague and Grahl 1992). The intention was for the EIRA to stand above national systems as a third tier, but to interact with them. The authors state that, ‘the European Parliament and certain member states can be seen as creating the agenda and considerable political pressure for a European industrial relations area which

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will not easily be dissipated or defeated’ (ibid.: 88). However, ‘the immediate enactment of a fully-fledged European industrial relations area does not appear on the agenda, but it is conceivable that it may appear incrementally over a period of time’ (ibid.: 91). What is more likely in the short term, they propose, is the development of a looser industrial relations regime, with policy convergence around steps in the same general direction, rather than conformity of approach (Teague 1993). What is certainly true is that a number of supranational institutions with a strong interest in industrial relations have developed. Besides the Commission itself, supranational organizations of both trade unions and employers have been established or strengthened. Whilst employers’ organizations have been generally opposed to attempts to create more standardized industrial relations systems, and particularly fledgling attempts at cross-national bargaining, the possibility remains that the operations of other supranational actors may encourage convergence. The foundation of additional machinery in the form of the European Industrial Relations Observatory, which has the explicit aim of keeping unions informed about developments across Europe, is another clear attempt by the Commission to encourage convergence (El-Agraa 1998). As we saw earlier, Poole (1986) criticizes the convergence theorists’ concentration on factors outside the industrial relations system when looking at movement towards convergence, and instead stresses the importance of the strategic choices made by labour market actors, which he predicts will lead to divergence. However, at this point perhaps Poole’s thesis may be stood on its head. It is arguable that with the development of supranational labour market actors who are deliberately attempting to create convergence, an actor-based theory could be extended to indicate convergence rather than divergence. Progress towards this is currently slow, and the unions are disenchanted by the limited role of the social partners envisaged in the 1994 White Paper on Employment by the European Commission (Leisink et al. 1996). However, the present strategy by the European Trade Union Confederation (ETUC) of concentrating on establishing long-term power for itself within European institutions, and on lobbying within the European Parliament and the Employment and Social Committee, may have a longer-term pay-off (Goetschy 1996). Whilst the post-Maastricht emphasis on subsidiarity may have restricted the Commission’s ambition to create a strict harmonization of labour protections, there now exists a body of legislation (including recent additions on European Works Councils, parental leave, limits on working time, and contractual rights for part-timers) which is in the process of being implemented. Moreover, indications that the Commission intends to resuscitate attempts to extend information and consultation rights to the employees of all companies, based on proposals which were originally made twentyfive years ago, signals that pressures in favour of harmonization are not easily dissipated (El-Agraa 1998).

THE CONVERGENCE/DIVERGENCE DEBATE 15

Conclusions Arguments about convergence and divergence have tended to dominate comparative industrial relations writing in Europe in the past few years. Many assessments favourable to convergence seem originally fuelled by extreme optimism about the development of a European model of labour market regulation to challenge the dominant models of the US and the Pacific Rim. Thus Underwood (1989) argued that the EU social programme, aimed at harmonizing employment conditions to create a ‘level playing field’ in Europe, would act as a powerful impetus towards convergence of industrial relations systems. Sisson et al., discussing merely the operation of European Works Councils, predict that, ‘The overall effect is likely to be a growing convergence in the conditions of employment, if not necessarily pay levels, and the “Europeanization” of industrial relations more generally’ (1992:15). Similarly, Bridgford and Stirling conclude their survey of employee relations in Europe in the following terms: ‘Elements of divergence have appeared within a broader framework of convergence. Given further pressures emanating from multinational economic forces and supranational political institutions, an embryonic Europeanization of employee relations has been identified’ (1994:245). Discoveries of an emergent European model of human resource management (e.g. Brewster and Hegewisch 1993) have also been noted. However, notwithstanding the claims above, the majority of comparative studies of industrial relations in the 1990s have tended to conclude that few signs of general convergence are apparent in European industrial relations, and particularly in terms of trade union response (Bamber and Lansbury 1993; Bean 1994; Niland et al. 1994; Crouch and Traxler 1995; Leisink et al. 1996; Van Ruysseveldt and Visser 1996). Thus, in relation to general trends like the decentralization of collective bargaining, convergence is refuted on the basis that there is no uniform ‘disorganized decentralization’, with strong national systems maintaining novel ways of developing mechanisms for coordinating decentralization (Traxler 1995). Similarly, the claim that concertation models have become obsolete can be countered by evidence from Austria, Spain, Portugal, the Netherlands, and Ireland (Ferner and Hyman 1998). The general conclusion of all these studies is that major structural transformations of the international economy, whilst they have similar impacts on national economies, are not necessarily experienced in the same way by the industrial relations systems. The ‘stickiness’ of different national institutions (Ferner and Hyman 1992), and the impact of different national legal systems, ensure that economic pressures are mediated significantly before they impact on the form or content of collective bargaining. From the point of view of our own study, it is perhaps significant that most of the studies cited above have drawn conclusions based on generalizations about national systems. Whilst such studies are clearly of great value, the danger exists, particularly in a period of such dramatic change for the trade unions, that subtle and more qualitative shifts which may be taking place nearer to the workplace may be missed. Indeed, support is given for this view in the recent review article by Hansen

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et al. (1997). Discussing Traxler’s extremely influential work on decentralized bargaining systems (Traxler 1995), the authors conclude that because his research was concentrated at national level, it may, ‘exaggerate the pace of continued centralization, while at the same time underestimating the significance of the changes taking place at workplace level’ (Hanson et al. 1997:363). Further, ‘what is taking place at the workplace level today will probably determine the future shape of the collective bargaining system’. In anticipation of this problem, we deliberately chose to focus our research at the level of industrial sectors. The advantages of this are twofold: first, sector studies are more likely to be sensitive to changes in workplace practice; second, a tighter empirical focus and greater comparability of data can be achieved, which means that the differential effects of economic and technological factors external to the labour market, and the strategic choices of key industrial relations actors, can be more effectively studied. In choosing electronics, food manufacturing, banking, and central government administration we are covering not only manufacturing and services, but also sectors at different levels of exposure to international competition. The majority view in comparative industrial relations research is that whilst the economic and technological environment within which industrial relations systems operate may demonstrate significant tendencies towards convergence, the shape and content of those systems is most significantly influenced by the national context within which they operate. Thus, continuing divergence in the responses of the major industrial relations actors may be anticipated. Within a EU context, notwithstanding some ambitious political attempts to construct a ‘European’ model of labour market regulation, the post-Maastricht acceptance of the principle of subsidiarity (i.e. that the detail of policy and practice is best decided at the level of the individual member state) will dilute any attempts to impose similar structures or policies in the industrial relations field. Thus, the significance of the industrial sector to the development of industrial relations policy and practice should be massively outweighed by the national context within which those sectors are operating. Our empirical survey, deliberately pitched at the level of industrial sectors, is intended to shed some light on how far these propositions can be sustained.

2 Approaches to the contemporary role of trade unions Mike Rigby

This chapter locates the main focus of the research, trade union responses to change, within a theoretical framework based upon a discussion of relevant literature. First, it considers the degree to which trade union responses have been characterized as strategic, and the variables which have typically been associated with effective strategic development. Second, it summarizes the approaches which it has been recommended that trade unions should adopt, in the face of an increasingly hostile environment. Finally, it relates these issues to the adoption of a particular, qualitative methodology in the research. Importantly, the chapter seeks to provide an analytical framework for the interpretation of the data on trade union responses which is reported in Chapters 4 to 7. Our decision to focus on trade union ‘responses’ rather than ‘strategies’ requires comment. Writers tend not to be comfortable in using the concept of strategy as applied to trade union choices of actions. As Hyman (1996) indicates, unions do not normally adopt clear-cut, polarized strategic orientations. Where the concept of strategy is employed in the literature, there is a tendency to dilute it in a trade union context to overcome the kind of problem to which Hyman refers. Two examples of this approach are presented below: First, strategies are: not to be understood as implying a fully conscious and rational consideration of alternatives and a controlled follow through from policy to implementation…rationality is often bounded and focused on the next step rather than on the long term, and internal disagreements may lead to attempts to dilute the implementation of decisions once they have been reached. (Leisink et al. 1996:2) Second: Strategies will be ‘read’ from the patterns of union behaviour. They may, therefore, not necessarily be strategies in the sense that they were consciously developed as a consistent, cohesive and integrated set of policies. (Undy et al. 1996:224)

18 APPROACHES TO THE CONTEMPORARY ROLE OF TRADE UNIONS

Both of these quotations indicate that their authors have difficulty in applying a conventional strategic management model of the concept to trade unions (based on a rational choice of options and a consistent and integrated approach to implementation). However, their solution is such an imprecise definition of the concept that its value is questioned. We have therefore preferred to use the term ‘response’ as the focus of our study as a concept which could embrace a range of trade union choices of action, from fragmented ad hoc responses to more planned and coordinated approaches. We have considered it useful to reserve the use of ‘strategic’ for responses which display the following characteristics. First, we consider it important that strategic responses should be to some degree innovative and imply some disjuncture with past union policy. In addition, strategic responses should form part of a consistent approach by a union or unions as a whole. As Mintzberg and McHugh (1985) indicate, if we recognize a consistent pattern in a stream of decisions, we may speak of a strategy or strategic choice. In this respect it is important to avoid an exclusive focus on the views of the national leadership of the unions. Finally, in the case of strategic responses there should be some evidence of efforts at implementation. It is important to distinguish between responses which are merely put forward as desirable and those in which more effort and resources have been invested. We have consciously not placed too much emphasis on the distinction between reactive and proactive responses. Union action is often largely a response to external pressures (as is the case with most companies). The capacity to modify such pressures is limited. Our interest is in the options selected by unions for managing these pressures and the factors influencing the choice of options. Several variables have been identified in the literature as influencing the nature of trade union responses. First, a number of writers have posited that the degree to which the trade union situation is an exposed one has an important influence on the nature of response. For example, it has been suggested that in those nations where the state offers diminishing support to trade union activities, or is deliberately antagonistic, the strategic choices made by trade unions are thrown into sharper relief, with the consequences of strategic mismanagement being even more severe (Boxall and Haynes 1996). In a UK context, it has been pointed out that unions only began to develop more positive and self-reliant strategies as the hope of a return of a Labour government faded. Union responses before this tended to be ad hoc and reactive, bent on damage limitation (Undy et al. 1996). Second, the legal and institutional framework within which trade unions operate has been put forward as an important variable conditioning the nature of trade union responses. Boyer (1995) stresses the difficulties of trade unions developing effective responses without a favourable legislative framework. He points out the limitations of trade unions, proposing a rejuvenation of their objectives and organization as a means of reversing the adverse trends set in motion by inadequate legislation and an excessively decentralized bargaining process, and gives France as an example of a country where a large spectrum of alternative trade union strategies has not prevented the crisis of the unions developing. Thus, innovation on the part

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of trade unions is not a perfect substitute for changes in trade union and labour legislation, and, for this, political involvement is needed. Hyman (1996) indicates that for trade union responses to be effective they must achieve a favourable framework for intervention and a cultural climate sympathetic to the collective representation of workers’ interests. It is interesting to note a degree of potential contradiction between these first two variables. Taken together they would suggest that in the very situation in which trade unions are most likely to need to develop strategic responses, i.e. when they are exposed, they may find it most difficult to do so. This is because a major reason for a trade union movement being in an exposed situation is often the absence of the very legal/institutional framework conducive to strategy development. We return to the relationship between these two variables in the discussion of the data. Finally, it has been suggested that the type of response which unions develop is constrained by the structure and organization of the unions themselves. Bacon et al. (1996) have pointed out, in a comparison of UK and German steel unions, how, in the UK, the multi-union nature of the steel industry distracted the unions from considering the future of trade unionism per se, in favour of concerns about the role of each union vis-à-vis the others. Debates about teamworking and multi-skilling were parochial, with the split in research facilities exacerbating the lack of central information available for plant-level officials. Outlooks were fragmented, reflecting plant/divisional organization and occupational structure. There was little evidence that unions at local level were drawing up convincing criteria for change to match management plans. IG Metall, in Germany, the only union organizing in the German steel industry, was able to develop a more coherent and successful response, pursuing a skills-based strategy and convincing managers of the need for a high investment route in reorganizing work. Traxler (1995) also has argued that comprehensive, highly governable unions are better able than particularistic ones in a multi-union situation to meet with effective responses to new management demands. He stresses that a significant element of a strategic trade union response is likely to include a focus on their own institutions. Other writers have compared favourably the ability of the more centralized European unions (excluding the UK) to develop effective responses in comparison with their American counterparts. They have suggested that the capacity of unions to choose, and successfully implement and maintain, a strategy of political unionism is dependent on, among other things, a relatively high degree of unity within the movement. When we come to consider the models of response trade unions should be adopting, we find a considerable degree of consensus in the relevant literature. This consensus has to be located against a background of assumptions about declining trade union fortunes, as a result of trends mentioned in Chapter 1. The consensus, it is suggested, revolves around five areas: • an enterprise-level, partnership-oriented focus • a qualitative rather than quantitative bargaining agenda • intervention at a political level

20 APPROACHES TO THE CONTEMPORARY ROLE OF TRADE UNIONS

• a greater responsiveness to member and constituency needs • the development of supranational activity. An enterprise-level, partnership-oriented focus Hyman (1991) has pointed to the decline of two major trade union models during the last two decades—broad class projects pursued through political concertation, and projects based on radical oppositional political priorities—and how unions have to pay increasing attention to particularistic interests and a decentralized bargaining agenda. This enterprise-level focus tends to involve a more partnership-oriented and integrative relationship with the employer. Regini (1992) suggests that unions will have to consider whether they are willing to adopt more cooperative labour relations (with obvious implications for the use of strikes as a tactic). He indicates that this is particularly relevant for unions in Italy and the UK where oppositional relationships have been the norm. Kochan and Piore (1984) suggest that union leaders will need to be active in joint efforts with employers, to bring individual employees more directly into the process of decision making on shopfloor issues that affect their jobs, and to adapt current rules to the demands for more flexible and productive work systems. In addition, union leaders will need to continue to press for more access to, and participation in, high-level management planning and decision making, before decisions are made. Similarly Crouch (1986) suggests that if employers seek to construct a new company-level personnel policy, the challenge for the unions is whether they can make themselves useful to workers by being involved in the new channels of participation being constructed. If the union response is the negative one that such channels fail to give workers real power, it is quite likely that workers themselves will find the personal level of involvement useful and in some respects preferable to the more bureaucratic form of standard union representation. Wiser than outright opposition to such participation would be a union strategy for providing services to enable workers to make the best use of it. The extreme case of a more integrative model of union-employer relations would be a productivity coalition (Windolf 1989) with the emphasis on union-management cooperation to improve company performance. A union expression of this collaborative approach to the relationship with employers can be found in the British Trades Union Congress Report to the 1994 Congress. Arguing for the need to build a social partnership, it stresses that success depends upon employers and trade unions seeking to build consensus—to find the common ground on issues that are best tackled through joint action. Both sides should accept the imperative of improving business performance and service quality and agree to adopt a joint approach to problem solving. From a trade union perspective, social partnership means that the union has a guaranteed role in the management of change. New working practices will be negotiated, as will all other workplace changes, and the interests of the employee will be properly safeguarded. The following three common aims are put forward:

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• a joint commitment to the success of the enterprise • a recognition that there must be a joint effort to build trust in the workplace • a joint declaration recognizing the legitimacy of the role of each party. Thus, in true partnership, those conflicts that do occur could be worked out in an atmosphere of mutual respect, trust, and goodwill. The need for unions to move in the direction of collaboration is also confirmed by employers. The Institute of Personnel and Development’s (IPD) position paper on Employee Relations in the 21st Century (1997) sees there to be a continuing and developing role for trade unions as ‘social partners’ with employers, in developing national employment policies and building on their involvement at European level. Trade unions are perceived as being well placed to contribute to discussions about issues including ‘fairness’, productivity, and investment. At the level of the enterprise, according to the IPD, trade unions can contribute to a sense of confidence in workplaces where constructive relations are in place, and thereby facilitate more rapid and effective adoption of necessary change. However, ‘if trade unions are to flourish, their role will need to evolve so that they have something to offer which both managers and employees value’ (IPD 1997:11). Despite this emphasis on unions adopting a more cooperative approach, Leisink et al. (1996) argue that it is important for unions to master the whole repertoire of union-employer relationships and to be able to choose whichever model seems appropriate. Thus, for some unions, this could imply finding ways of cooperating with management, but for others it may mean organizing their resources in such a way as to exercise power to influence conflictual situations. A qualitative rather than quantitative bargaining agenda The trade unions’ shift towards a less oppositional, enterprise-based relationship with the employer may also be reflected in a modification of their bargaining agenda. Hyman (1994) distinguishes between quantitative and qualitative bargaining demands, with quantitative demands covering wages and other financial compensation, and qualitative demands covering the actual conditions of work, the determination of effort levels, and the control of production. The ability of trade unions to make progress on the quantitative agenda is now seen as limited, given the competitive pressures faced by employers and the primacy assigned to the ability to pay. More explicit bargaining over job security and continuity is likely to play a more central role as unions seek some additional quid pro quo for lowering workers’ expectations for wage increases. However, in addition to job security, more qualitative issues are likely to be prioritized. For example, Hyman suggests that union concerns with training ‘focus on the qualitative dimensions of contemporary management discourse’ (1994:62–3), allowing them to construct an agenda which appeals both to employers’ desire to increase productivity whilst also offering something to members’ individual interests. Another new agenda focus is an

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emphasis on procedural demands, e.g. European Works Councils (EWCs). Such claims have few direct cost implications for employers and therefore facilitate the type of consensual union-employer relationship referred to above, as well as reflecting, as Hyman points out, unions’ lack of confidence in their own power. Bacon et al. (1996) in the context of the UK steel industry point out that if the unions do not actively promote individual career and skill development and greater participation, then such areas will be left in management hands, with dangerous implications for the future of collective representation. Jeffreys (1996) argues that unions should focus on introducing a bilateral content to human resource management (HRM) practices such as appraisal, team briefings, and performance pay systems. This could take the form of giving training to members on handling appraisal sessions or on performance pay systems. Regini (1992) also expects that some categories of workers will add items to the bargaining agenda such as vocational training, internal mobility, and career opportunities. A more qualitative approach can be found in union policy statements. For example, in the UK, instead of the traditionally hostile approach to management HRM practices we can find an acceptance that trade unions should engage with the process of change associated with HRM and deliver some positive benefits for members (Trades Union Congress 1994). Training plays a key role in this respect. Unions should be impressing on employers with whom they negotiate that training and development is a central part of any human resource management strategy. The unions’ approach to training and development should be guided by five principles; it should be open to all, voluntary, lead to externally recognized qualifications, promote equal opportunities, and be broadly based and not too employer specific. Waddington et al. (1996) suggest that unions need to tailor their bargaining agenda more in relation to particular groups of members. Their study displayed, for example, that white collar staff gave less importance to traditional collective bargaining objectives and broader social objectives than other groups of staff. White collar staff looked to unions to establish a fair and equitable framework within which individualized aspects of the employment relationship might be worked out. These aspects included fairer promotion arrangements, career development, career breaks, and opportunities for job-sharing. A marked gender differentiation was also revealed, so that female white collar staff were far stronger in their support for union involvement to influence policy on career breaks and job-sharing than men. Thus unions need to be sensitive to the different priorities of different groups of members in the design of their bargaining agenda. An expression in the UK of the new union agenda can be found in a joint publication of the General, Municipal and Boilermakers’ Union and the Union of Communication Workers (GMBU/UCW n.d.). The agenda would include issues such as training, industrial investment, research and development (R&D) expenditure and new product development, the restructuring of work for maximum mutual flexibility, equal opportunities for women, racial discrimination in the labour market, and health and safety. Quality of output rather than the price of inputs would be the centrepiece of discussion between unions and employers. Inevitably pay

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would be one item on the agenda, but work organization, training, and quality should form the focus. Discussions would centre upon productivity and ways of bringing the ingenuity of employees to bear on questions of quality. It would be wrong, however, to see the qualitative and quantitative agendas as unrelated. A willingness to bargain over qualitative issues such as multi-skilling and flexible working practices may support the quantitative agenda, as pointed out by Rainbird and Vincent (1996). In addition some writers suggest the need for caution about aspects of the qualitative agenda. Terry (1996), for example, questions the potential of integrative and supply-side issues, such as training, to play a key role in establishing stable corporatist structures, suggesting that unions will not always be able to discount membership pressure to return to pay. Intervention at a political level A third area of agreement about future models of trade union action is on the need to combine the enterprise focus with significant union intervention at a political level. Crouch (1986) argues that a union movement which becomes completely decentralized loses the capacity for strategic action. He stresses that unions in future will need to renew and strengthen their political involvement. In order to withstand the new employer offensive, they will need friendly governments that will guarantee rights of union membership and recognition, outlaw various employer tactics for keeping unions out of their firms, help unions confront the threat of international capital, and provide the opportunity for union involvement in corporatist economic management (which has proved so necessary in the past if workers are to have any countervailing power against the employer, and conservative forces are not to dominate). Crouch contrasts the situation in Italy and the UK at the beginning of the 1980s. In both countries shop-floor militancy undermined efforts to establish neo-corporatist cooperation. However, in Italy the unions’ alliance with political groups important to national political integration prevented the kind of attack on the unions which took place in the UK. Boreham and Hall (1994) stress the importance of unions adopting political unionism, defined as a trade union strategy that seeks to assert the power of organized labour both at the level of national political institutions and of the enterprise. Political unionism can most effectively be implemented by a relatively centralized and unified union movement, pushing beyond the economistic aspirations associated with industrial unionism and achieving participation in major political institutions, so as to influence policy formulation, the operation of product and labour markets, and the patterns of production and distribution that characterize the economy. The adoption of a strategy of political unionism not only offers the possibility of influencing macro-economic decisions which are in the interests of union members (e.g. to reduce unemployment) but also can enable unions to resist the managerial prerogative at enterprise level (although having little direct impact on individual employee empowerment). It is a means whereby unions can attain institutionalized rights to influence key enterprise and workplace

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decisions and even union density. Where, on the other hand, union strategy remains locked in the enterprise only, or is limited to an industrial focus, significant gains for labour remain elusive. It is suggested by Boreham and Hall that the German and Swedish cases provide the strongest examples of the micro-economic achievements of political unionism. Both countries have relatively extensive, institutionalized forms of employment security and worker representation in both enterprise board and workplace decisionmaking arenas, although the political unionism of the German movement is not as comprehensive as the Swedish example. In Germany, the right to appeal against personnel decisions and to participate or be represented in workplace and enterprise decision making are vested in works councils rather than in the unions. While unions exert influence over most works councils, there is evidence to suggest that the capacity of works councils to represent labour against capital is at least partially compromised. In Sweden, on the other hand, similar rights are vested exclusively in the unions. Unions in the best position to pursue political unionism are those which have reasonable union density and unity, as well as the availability of national institutions amenable to the involvement of organized labour. However political unionism is not a substitute for sector- and enterprise-level organization. The latter is essential to take advantage of the gains achieved through national political activity. This need for a balance of activity between the ‘ballot box and the bargaining table’ is recognized in discussions on the future of trade unionism in the US (Kistler 1984; Oswald 1984). Kistler, for example, stresses the need for the US unions to achieve legislative change if they are significantly to improve their organizing environment. The changes would need to include the reform of the union representation process under the National Labor Relations Board and measures to expedite employees’ exercise of free choice and deter illegal employer activity, particularly with respect to the dismissal of pro-union workers. In some states, state and local government workers have the right to join unions but are prevented from engaging in collective bargaining by restrictive laws. The greater regulation of plant closures and a system of effective international trading rules are also needed to offset employer threats and stabilize employment. Nor should the political activity of trade unions necessarily be limited to supporting traditional collective bargaining objectives but also might have to embrace wider social, non-employment-related issues (Hyman 1991). These non-work-related membership issues are considered in more detail below. A greater responsiveness to member and constituency needs We also find in the literature an emphasis on the need for trade unions to re-examine their relationship with members and potential members. For example, unions are advised to focus on the development of a more open and participative political culture. Valkenburg and Zoll (1995) locate this discussion in the context of the development of features of modern society, in particular individualization which, Zoll argues, is often interpreted only from a negative perspective, rather than as

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presenting challenges to which trade unions should respond. For trade unions individualization has two important dimensions. First, it means that the groups of workers which unions have traditionally organized no longer exist as a homogeneous collective. Workers are now far more differentiated. Second, workers must be seen as less passive recipients of union help and more reflexive: ‘individual identity is no longer a static basis for adult life… It is increasingly turning into a project; change, experiment and open biography are aspects of identity that gain considerable importance’ (Valkenburg and Zoll 1995:130). These changes in the nature of the union membership have major implications for the structure of trade unions, the process of policy development, and the role of fulltime officials. Members are likely to react negatively to the dominant feature of union structure being the bureaucratic control of a mass of undifferentiated workers. Unions need to move away from the idea of having a central policy for all members. The diversity of the membership needs to be reflected in a variety of union policies. The unions have to initiate debates among the membership without any certainty as to where such debates will lead. The reference point for policy development should not only be what is perceived as possible from the centre but should also include what members themselves can bring to the discussion. Rather than unions doing things for their members, they should think more of acting together with the members. Valkenburg and Zoll recognize that the development of such a participative and discursive culture in trade unions is not an easy task. The fact that often members are not seeking more participation in union decision making makes it easy for unions to believe they do not want it. However, the authors suggest this is primarily because the members have no expectation of being able to achieve it and therefore do not pursue claims they perceive as unrealistic. The development of such a new culture would also require a very different kind of full-time official. The official would need to play the role of facilitator rather than bureaucrat and would have to accept that the knowledge and competence of members may be equivalent to their own, thus ending their dominance in the relationship. The concept of union solidarity would also need to be re-examined. It can no longer be interpreted as an association of equals but has to been seen as the mutual support of those whose positions and interests are different. Different groups must be given the opportunity to develop policies suited to their particular needs. Unions cannot respond effectively to diversity by starting from a premise of unity. They must start from an acceptance of diversity and look for concrete differences and similarities and develop differentiated views of solidarity from there. This emphasis on the need for a new relationship between trade union and member is particularly evident in debates on the future of the German trade union movement. In this context Hoffman (1995) stresses that if unions want to be an effective counterweight to capital, they have to abandon a hierarchical political culture which is dominated by centralist politics. Pointing to the heterogeneous nature of the membership, and society as a whole, he argues that unity will not always be on call and that the unions’ political culture must become more discursive. Hoffman also argues for a new type of union official who is not a functionary but

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who can facilitate the debate and the process of decision making, knowing how to use the skills of different members along the way. Other writers, if somewhat less radically than in the German debate, see the need for contemporary trade unions to re-examine their relationship with their members. For Crouch (1986), if the identity of the workforce is changing rapidly, only a union which remains close to its members will be able to respond to changing and developing new aspirations (and avoid these aspirations being taken up by rival organizations). Jeffreys (1996), in advocating the need for unions to focus on sustaining or introducing a new bilateral contract as opposed to the unilaterally imposed, management-led employment relationship within the enterprise, suggests that for this to be successful it will probably involve unions restructuring their national organization in such a way as to maximize membership access to the union and significantly improve intra-union communications. Hand in hand with the development of a new political culture, unions need to direct their appeal to a wider group of employees, not only to certain traditional segments of workers, given the more differentiated nature of the labour force. Crouch (1986) points out that among the so-called marginal groups in the secondary sector, several have a radical potential, such as ethnic minorities, women in unfavourable working conditions, and young people trapped in insecure employment by the economic circumstances prevailing at the time they joined the labour force. He suggests it is unwise for a labour movement to become solely the representative of such groups (as seemed to be happening to the British Labour Party in the mid-1980s) but it is also unwise to concentrate exclusively on the core of the skilled working class, as German unions have been accused of doing (Locke 1995). Locke quotes with approval how certain American unions have broken down old distinctions between skilled and unskilled workers, and ‘American’ and ‘foreign’ workers, by actively recruiting and training new immigrants who had previously worked in the non-union sector. Again in a German context, Zoll (1996) emphasizes the need for the unions to pay more attention to white collar employees, young workers, and the unemployed. In a global context, the International Labour Organization (ILO) calls on trade unions to focus on the unemployed and precarious employees in order to compensate for dwindling membership, advocating the use of public information campaigns, links with pressure groups and local community campaigns to force employers to implement minimum labour rights (ILO 1997). There is also a tendency in the literature to stress the need for trade unions to recognize that members have wider needs than those directly associated with the workplace (Hyman 1991). Alonso (1996) sees the importance of this, warning that for unions to confine themselves to work-based bargaining objectives is potentially dangerous because other organizations may be able to do this better than traditional trade unions. It is therefore important for unions to intervene in issues of citizenship and associated rights on a wider basis. Oswald (1984) similarly stresses the need for the American unions to be involved in battles for social justice, for fair income distribution, full employment, and job security. Vilrokx (1996) sees it as being

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important for unions to adapt their agenda to a situation where work cannot be guaranteed for many members of society. There is a need for the unions to act on behalf of those people without work and press for an income instead of unemployment benefits or public assistance for them. Muckenberger et al. (1995) point to the lack of direction and meaning experienced by many members of society after the secularization of religious as well as political visions. They suggest that unions, together with other groups (e.g. women’s organizations, environmentalists), should facilitate the creation of a new, communicative culture which facilitates the individual’s quest for meaning. Unions should no longer operate as protective, guildlike organizations but should aim to become a ‘citizen’s union in a civil society’, promoting equality and liberty. Interestingly, very little emphasis is placed upon what has been one of the more visible responses among European trade unions, the development of individual services for members. The view of the member as a passive consumer of services, whose needs the union has to identify and service more effectively, discussed by Heery and Kelly (1994), is not seen as being of much significance in the literature. A study by Waddington and Whitston (1996) in the UK showed that financial services packages do not have a significant effect on the recruitment of white collar staff. Benefits and services packages, including financial services, were cited as a reason for joining a trade union by less than 10 per cent of the white collar staff in the study and by only 12 per cent of those in other occupations. The same authors, in a related survey, found that collective factors such as mutual support, improved pay and conditions, peer-group pressure, and a belief in the principle of union organization were by far and away the most important reasons why people joined a trade union. The implications for the unions is that rather than emphasizing the offer of financial services and the like, they should concentrate on local union organization as the key to effective recruitment (Industrial Relations Services (IRS) 1998). The development of supranational activity The final area of consensus about the model trade union response lies in the need for trade unions to develop supranational activity and organization. Two main developments have created this need. The development of the role of transnational enterprises within a globalized economy has meant that decisions affecting union members are no longer located solely within national boundaries. In addition, the growing impact of the EU on national economies has emphasized the need for trade union involvement at a European level. However, although this is an area of consensus in the literature, it can also, for a number of reasons, be seen as a particularly complex area. First, the absence of any strong and well-established development at this level means the discussion can, at times, appear abstract and hopeful rather than practical and realistic. Second, writers place considerable emphasis on the obstacles to further development. Third, there is a lack of clarity

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about the relationship between the different areas in which supranational activity is seen as being desirable and possible. There are three main areas of supranational development considered by the literature. First, considerable attention has been paid to the coordination of trade union activity in relation to the EU via the European Trade Union Confederation (ETUC). The membership of the ETUC was based initially on the affiliation of the major trade union confederations of each member country. It claims through its affiliated organizations to represent 85 per cent of the employees within the EU. The only major confederation still outside the ETUC is the French, communistaligned CGT (this exclusion may not continue much longer). The principal role of the ETUC has been to seek to influence EU decision-making, particularly on social and employment issues, via lobbying. It has tried to institutionalize its presence in the EU more as a political force than as a trade union organization. The adoption of a lobbying, rather than an organizing, coordinating, or even negotiating role, has in part been attributed to the diversity of the ETUC’s membership. The need to maintain consensus among affiliates with differing priorities has undoubtedly limited the potential for a more proactive role. Issues put forward by the organization had to be unifying, general, and recurrent; the main examples are the promotion of a Keynesian investment policy for Europe to increase employment, seeking to reduce working hours (although there has been some internal conflict in relation to this), the development of professional training, and the establishment of effective consultation processes within transnational companies and, subsequently, major companies at national level (Goetschy 1996). Another factor limiting the ETUC’s role has been the lack of enthusiasm for an emphasis on social and employment issues among the other social partners at a European level. UNICE, the European employers’ organization, has been markedly reluctant to enter into any agreements which would affect employment conditions throughout the EU. There is also a manifest divergence in approach between UNICE and the ETUC on such a central issue as the meaning of employee consultation, with the ETUC seeking the involvement of employee representatives in consultative processes on key decisions at a much earlier stage than is palatable to the employers’ organization. This conflict of views has been reflected in UNICE’s call for the early revision of laws on Europe-wide consultation and its opposition to a European-wide initiative on information and consultation rights in major companies at national level. Similarly, the political decision makers in the EU have been more concerned about economic rather than social issues. Their interest in the employment area has increasingly focused on extending labour market flexibility to improve competitiveness and create employment. The ETUC has not, therefore, been operating in an environment conducive to the development of a more active role. The role of affiliating national confederations has also been seen as a weakness inhibiting the effectiveness of the ETUC. It has been pointed out that national confederations are not always as in touch with organized workers as their affiliated trade unions or federations, thus resulting in the ETUC being rather isolated from the rest of the trade union movement. This has reduced its organizational

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effectiveness and made inevitable the inwardlooking, lobbying approach discussed earlier which emphasizes developing relations with EU institutions rather than mobilizing union members. A vicious circle has been created whereby the minimalist nature of ETUC policies has reinforced a lack of interest on the part of national trade unions and federations (Goetschy 1996). Even in the case of the confederations which are directly affiliated, the degree of interest in the ETUC has varied considerably. Unfortunately the fact that the weaker a confederation’s situation in its own country, the greater tends to be its interest in the ETUC, has not strengthened the organization. The approach of the TUC is instructive in this context. Its interest in ETUC affairs grew as the trade union position in the UK got weaker and Europe was seen as a counterweight to Thatcherism. In fact, its expectations probably became too high (Teague and Grahl 1992). There has also tended to be too great a dependence on the German trade union confederation, the DGB, as the most powerful affiliate; the DGB for many years held the presidency of the organization even though, according to Hoffman (1995), gesture and bureaucratic policies predominate in the German approach to the ETUC. Germany’s position as the dominant economy in the EU contributed to this because the competitive pressures on the collective bargaining process were not as strong there and encouraged a complacency towards Europe. The dangers of this dependency have become more apparent recently as the DGB has become preoccupied with its domestic situation and cutbacks in its own organization have limited the role it can play. The ETUC has recognized the need to strengthen its organization and in the 1990s has implemented a number of reforms. Probably the most important of these was the acceptance into membership of the fifteen sectoral trade union federations in 1991 and the establishment of sectoral industry committees to reflect this development. This has brought the ETUC more into direct contact with national trade unions and federations and is likely to make it more responsive to them. It also encourages the organization to pay more attention to the sectoral level, which is the focus for so much industrial relations activity. Another reform aligned the voting rights of members more to the actual membership level of national confederations. For example, under the old constitution, the TUC had three votes on behalf of its eight million members while much smaller confederations had two votes. Further reforms included strengthening the secretariat and the role of the presidium, which meets eight times a year, at the expense of the executive committee, improving the representation of women and recognizing the cross-border role of the Inter-regional Trade Union Councils, which can now send an observer with speaking rights to the Congress. In addition to internal reform, developments in the institutional powers of the ETUC within the constitution of the EU itself have the potential to strengthen its role. The Maastricht Treaty reaffirmed the role of the social partners in the EU decision-making process. The European Commission is obliged to consult the employer and trade union representatives on the direction and content of EU action, to obtain their opinions and recommendations. A recent Communication

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(European Commision 1998) set out proposals to increase the the profile of the social dialogue process and reform its structures in order to strengthen it and make it more adaptable at both cross-industry and sectoral levels. The Maastricht Treaty also introduced the concept of the framework agreement, through which the social partners may inform the Commission of their desire to embark upon a process of negotiation that may lead to a direct agreement between them, needing only a Council decision to bring it into effect (Cockburn 1995). The Social Chapter of the Treaty in addition made it easier to progress employment issues by enabling the use of qualified majority voting in Council. UNICE’s acquiescence with the concept of the framework agreement was largely because it saw a development in this direction as inevitable. It should not be interpreted as a sign of a sudden willingness to develop a framework of European agreements; nor should it be assumed that the Council of Ministers will easily approve social partner agreements. A wave of legislation as a result of framework agreements is, therefore, unlikely. However, despite these positive developments, writers stress that there still remains a lot to be done to develop the ETUC’s role. Rath (1994), for example, stresses the continuing need to strengthen the staff of the organization, including the secretariat, which he considers inadequate to deal with the potential work. Too many of the limited resources available are used for internal organizational issues. For example, two-thirds of the organizational capacity of the secretariat is used to engineer a common position among the individual affiliates. This does, of course, highlight a central dilemma of the role of the ETUC. If the organization is to become more effective, it needs to be given more autonomy by its affiliates, which involves a transfer of power. Its affiliates are divided on this issue. For example the French CFDT, the Italian and the Belgian unions tend to be sympathetic to increasing its autonomy, whereas the French FO and also the TUC have been more cautious, seeing it primarily as a coordinating body for the exchange of information. Rath also emphasizes the need for the ETUC to obtain more influence at the early stages of the elaboration of EU legislation (i.e. in the committee discussions of the European Parliament) and to achieve more access, together with the industry committees, to EU ministers and experts. Apart from strengthening its internal organization and autonomy and enhancing its influence in EU circles, the literature emphasizes the need for the ETUC to develop a stronger profile within the European trade union movement as a whole and to establish more direct links with the individual unions and federations. Rath, for example, argues that the ETUC should further sponsor cross-border cooperation via the Inter-regional Trade Union Councils and develop policy for internationally mobile workers. There is also a need to seek to achieve European collective agreements. These are likely to be on qualitative issues at first, concentrating on items such as training. Part of this process of the ETUC taking on a higher profile should involve the trade unions in an analysis of what tasks should be transferred to a European level within the movement. It will also involve the ETUC in the organization of more joint action with the sector committees and the national confederations. Notwithstanding these positive recommendations, the literature

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continues to emphasize the factors which will constrain the ETUC’s further development, including the reluctance of employers to see the establishment of collective bargaining at a European level and the continuance of the most important legal frameworks at a national level. A third area of supranational trade union activity, which has received relatively little attention in the literature, is trade union sectoral organization at a European level. On a global basis this is represented by the industry-based International Trade Secretariats whose European manifestation is the sixteen European Industry Committees (EICs). The Trade Secretariats have close links with the International Confederation of Free Trade Unions and have a political, informational, and educational role, as well as providing support for affiliated unions in dispute (Bridgford and Stirling 1994). The Secretariats have been particularly concerned with the growth of transnational enterprises (TNEs) and have played an important organizational role in the development of EWCs. In several respects the EICs face similar problems to the ETUC. It is difficult for them to play a proactive role at a European level until national trade unions recognize that certain tasks and powers ought best to be transferred to a similar level. They also face difficulties from understaffing and the reluctance of employers’ associations at a European level to reach any formal agreements with a European ambit. However, EICs do have the advantage that they have a direct relationship with national trade unions rather than confederations (unlike the ETUC) and therefore are in closer touch with union members. Initially, when the ETUC was established, the prevalent view was that the role of the EICs was to reinforce the ETUC and not develop into a parallel European organization at sectoral level—a view supported at the time by the UK and Scandinavian trade unions. Subsequently, as mentioned above, the more independent role which sectoral union organization had to play at a European level was recognized and their representation within the ETUC structure was established. Rath (1994) points out that the real process of negotiation over the content and aims of social dialogue cannot be carried out properly at the level of national confederations, represented at European level by the ETUC; it must take place via European company agreements, complemented by sectoral-level framework agreements on major issues negotiated by the EICs. Thus the EICs must have an increasingly important role in developing framework agreements in areas such as industrial restructuring, education and training, new technologies, working hours, employee status, and safety at work. A fourth area of supranational activity, which has received considerable attention in the literature, has been the involvement of trade unions in TNEs. The growing importance of such companies in European economies and the fact that their corporate decision making takes place across national boundaries has focused interest on how trade unions can have an influence upon such organizations at a European level. Writers have tended to concentrate on the development of consultative mechanisms in TNEs. Following the introduction of the Council Directive on the establishment of an EWC in September 1994, provision exists for the development

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of a system of employee representation at supranational level based on European legislation. The EWC discussion started in the 1960s and 1970s and it needed continuous union pressure to establish the present directive. The directive is permissive, allowing ‘representatives of employees and the management of the undertaking…to determine by agreement the nature, composition, function, mode of operation, procedures and financial resources of the European Works Councils’ (Council Directive 94/45/EC). This flexible approach was adopted in response to employer pressure. Employers were always critical of the ‘centralistic’ and ‘bureaucratic’ features of the EWC concept and supported less institutionalized information and consultation procedures. Therefore the EWC adopted in a particular enterprise would reflect the relative power and interests of the management and unions concerned. Only if no agreement was reached after a period of three years would the directive’s subsidiary requirements automatically come into force; these consist of an EWC with at least three and at most thirty members, including at least one employee representative from every EU member state in which the enterprise has its operations. The EWC has to meet once a year with the European management of the enterprise to exchange information and consultation on economic, financial, structural, and social issues affecting employees in more than one country. Additionally, when there are exceptional circumstances, e.g. collective redundancies, there should be, as soon as possible, an ad hoc extra meeting. Before each annual meeting, employee representatives have the right to come together without the presence of management. The permissive nature of the directive inevitably has meant considerable variety in the EWCs which have been established although, because the early, prototype, predirective EWCs were nearly all in French-owned companies, the French works committee system has probably had the greatest influence on the whole discussion on EWCs and on the directive (Schulten 1996). The literature tends to emphasize the limited results to be expected from the directive. Ramsay (1997), while acknowledging hopes that EWCs will enhance bargaining, provide an important base for international labour networking, and have a symbolic significance for industrial democracy, suggests that the balance of probabilities is that management will be able to contain most EWCs and engage, at least, in successful damage limitation. He points out the danger that management may be able to increase their control by selling their own message convincingly, seeking concessions to ‘best practice’ benchmarking in efficiency across their operations and increasing enterprise consciousness (and reducing sectoral and social solidarity) by squeezing out external union representation. However, a different viewpoint is put forward by Weston and Martínez Lucio (1997) who, on the basis of a comparative study of UK and German multinationals, conclude that, regardless of the strategies developed by certain companies, the establishment of a limited and focused agenda which is tightly controlled by management is unlikely to emerge. Studies of existing EWCs have tended to identify their role as primarily being one of information exchange rather than effective consultation, although, as Schulten (1996) indicates, a problem with most existing studies of EWCs is that they focus

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on what is said in the formal agreements while giving little information about what really happens in practice. If trade unions are to exercise an influence on transnational enterprises and avoid social dumping, it is stressed they need to develop independent cooperation and communication networking structures. Little systematic research has taken place on the informal relations which exist between union representatives. However, Weston and Martínez Lucio (1997) stress that national industrial systems can facilitate or impede the development of informal relations internationally. Thus, in the UK, the existence of informal networks such as joint shop stewards’ committees at domestic level, has encouraged networking internationally, whereas the high degree of formalization of German industrial relations makes informal networking less likely. The authors, therefore, stress the importance of integrating the EWCs into the national systems of industrial relations. The implicit assumption running through the discussions of the role of the ETUC and the EWCs is that a major focus of trade union activity should be to develop collective bargaining structures at a supranational level, whether at the level of the TNE, of the EU as a whole, or at a European sectoral level. Some writers have emphasized the factors encouraging the further development of European industrial relations. Bridgford and Stirling (1994) suggest that European Monetary Union is only sustainable if collective bargaining develops on a European level and, as evidence of movement in this direction, point to the development of EWCs, the way in which the Maastricht Treaty has facilitated framework agreements, and the fact that the social partners are thinking more in transnational terms (in this context it is interesting to note the proposal of Rodrigo Rato, the Spanish Economics Minister, that public sector pay should be coordinated in the EU after Monetary Union). The importance of the development of Euro-level bargaining is given weight by the work of writers such as Marginson and Sisson (1994) who point to the likelihood of the emergence of a new form of European-level industrial relations, arguing that the European company already has the strategic potential to establish a pan-European approach to employee and industrial relations management. However the adoption by a TNE of a European, rather than a polycentric, approach to industrial relations does not mean necessarily that collective bargaining will be chosen as the main mechanism for implementing it. On the contrary, a European approach could involve a social-dumping, cost-oriented emphasis rather than a value-added, best-practice policy. Therefore trade union intervention at supranational bargaining level is seen as essential to ensure an employee input into TNE and other employer-led, European-level strategies. Despite the importance given to trade unions sponsoring the development of European-level collective bargaining, the emphasis in the literature is very much on the problematic nature of this project. Schulten (1996) raises the possibility that TNE-level bargaining could further decentralize, and ultimately weaken, national bargaining institutions and national trade union centres, leaving small and mediumsized enterprises (SMEs) as the main focus of national bargaining systems. A series of obstacles are seen as inhibiting the development of European bargaining whether

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at a European, sectoral, or TNE level. First, there is the attitude of employers. At TNE level there is likely to be a reluctance to concede the kind of bargaining role to trade unions at a Euro-level which they have enjoyed at national level. This reluctance is mirrored at a European level as a whole, where employers’ federations have little interest in social regulation, have no mandate from their members to develop a bargaining role, and, in addition, are weak financially and organizationally. Another major problem is the absence of any European-level legal framework to regulate transnational collective bargaining, industrial action, and so on. National variations predominate. Nor does there seem to exist much interest on the part of the member states of the EU in developing such a legal framework. The EU does not function as a would-be European state to encourage social regulation from above, but is dominated by nation states, each with different agendas (Schulten 1996). There are, in addition, a number of trade union obstacles to the development of the Euro-bargaining project. There is still a focus on national interests in the trade union movement, which inhibits a whole-hearted commitment to European-level bargaining and results in divisions within the European trade union movement. For example, there is a caution on the part of the German unions, stemming from the anxiety that the substantive terms of European agreements would often be below German standards and could have the effect of undermining the German unions’ future bargaining position. Nordic trade unions also have reservations about the implications of European-level agreements for national collective bargaining and seem to view a legislative approach to establishing European-wide minimum standards as more realistic (Hall 1994). At a TNE level, this national focus manifests itself in the competition for investment between the unions from different countries. These reservations have contributed to weaknesses in supranational trade union organization, to which reference has already been made, including the reluctance of national unions to give up any of their powers to organizations functioning at a European level, such as the ETUC, and the organizational and financial weakness of such organizations. To these political obstacles, one must also add practical difficulties such as language and cultural differences. In conclusion, therefore, the development of supranational activity at a European level, while seen by commentators as highly desirable, given the developing globalization of the European economy, is also seen as being fraught with difficulties, not least of which being the reservations which exist among the trade unions themselves. As Teague and Grahl (1992) point out, various publications have argued the virtues of international trade union action without much hard evidence of this being a practical idea. Concluding comments Several concluding comments are relevant to this brief review of the literature on models of trade union response. There is an interesting degree of convergence in the models put forward, although with different emphases, often related to the country

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of origin of the writer. Trade unions are portrayed as being on the defensive and needing to rethink their role. This rethink involves moving away from oppositional and economistic approaches to employer relations and a centralized, officialdominated structure. However, as well as the development of a more ‘user-friendly’ trade unionism, which identifies with corporate success and a qualitative bargaining agenda, we have encountered an emphasis on the need for political activity and the taking up of wider, non-work-related issues on behalf of the union membership. There is the possibility of an uneasy relationship between these two areas. Participation in social and political activity often involves a different, campaigning, style from that associated with integrative, enterprise-based bargaining. Most of the contributions focus on putting forward the models of response trade unions should adopt. They do not consider in any detail the strategic capability of trade unions to adopt the responses proposed. Given that a requirement for major organizational change is often being considered, more attention to this area is needed. To implement the kind of changes which are proposed requires unions to overcome a series of obstacles and contradictions stemming from their own and employers’ existing culture. A number of examples of this problem can be mentioned here. The development of a more enterprise-focused, collaborative approach to employer relations is dependent, to some extent, upon receptive employers. There are important limits to the extent to which a trade union can implement this model, if faced by employers who have turned their back upon any kind of collectivist approach to employee relations. A significant number of such employers exist (similarly, unfriendly governments place considerable limitations upon union political activity). Second, an uneasy relationship potentially exists between qualitative and quantitative bargaining agendas. A focus on the development of a qualitative agenda risks the neglect of quantitative areas such as pay, to the detriment of union credibility among its members. Third, there can be a contradiction between the development of a participative, enterprise focus and the organizing of new groups of workers. Both require considerable support from officials. Diverting the efforts of full-time officials into organizing does risk neglecting the servicing of existing members; unions might lose members who have come to rely on a certain level of servicing, unless they are successful in passing on servicing skills and responsibility to lay activists. Finally, the model of trade union government which is advocated in the literature, based on a more decentralized structure, is likely to require a different range of skills from full-time officials, with a greater emphasis on their facilitating and supportive role. The acceptance of the need for this kind of change and the development of the appropriate skills to support it, among officials accustomed to a very different culture, are both quite problematic. Only in the literature on supranational activity did one find any detailed discussion of the implementation difficulties which could be faced by the trade unions. More consideration of these kinds of issues would involve a more detailed examination of the process of change itself, the type of incremental stages through which unions need to pass and the kind of existing models which they could seek to

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follow. On this latter point there are relatively few convincing examples in the literature reviewed. The US literature tends to refer positively to European models of trade unionism while, within Europe, writers point to the advantages of the German and Italian models. However, writers in these latter two countries tend to be equally critical about the trade union situation in their countries. This paucity of credible, existing models makes the process of change even more problematic. Our review of the literature on trade union responses and strategies had several important implications for the methodology adopted in the study, which was outlined in the Introduction. First it convinced us of the need to adopt a qualitative approach. The nature of the data we were seeking to collect made this essential. We were examining issues which were likely to be associated with a process of change. The issues were complicated and would not be transparent enough to the respondents if quantitative methods were used. It was very important to examine the meaning which union representatives assigned to particular responses. Meaning in this context included the intensity with which responses were put forward, the priority allocated to them by respondents, the origins and evolution of responses, and the degree of practicality with which they were viewed. Only with difficulty could such issues be addressed by quantitative methods. Second, including within our definition of strategic responses the need for responses to be consistent and coordinated within a union and for there to be some evidence of efforts to implement a response, also had direct implications for our methodology. It was important to obtain responses from a representative cross-sample of union representatives, at enterprise, regional/district divisional, and national level. By doing this we sought to avoid too great a reliance on the developed views of national representatives. We were able to test whether such views had permeated the rest of the organization: it was important to establish whether views represented an articulated and common approach which had been promoted through all levels of the union. An additional control mechanism was also used in this respect. A limited number of employer interviews, in most cases with human resources managers, were carried out. These focused on the same areas as the interviews with trade union representatives and sought to examine the ‘visibility’ of the responses of union representatives to employers on the basis that this would again be evidence of implementation efforts. Finally, the models of trade union response identified in the literature had an important influence on the selection of the themes which were included in the semistructured interviews. Relations with employers, the bargaining agenda, union organization, political relations, and the approach to supranational activity were all areas which were focused upon in the interviews, in order to provide direct comparison with the literature reviewed.

3 The national industrial relations contexts Manuel Pérez Yruela and Rafael Serrano del Rosal

In this chapter we seek to provide a comparative analysis of the national industrial relations systems of the five countries in the study. There is a particular emphasis on the role of trade unions. We offer a selective overview, as our main concern is to explain those aspects which will be essential to a fuller understanding of the subsequent chapters.1 The regulation of trade unions: institutional framework To understand and compare the patterns of industrial relations and trade unionism of the countries under consideration, it is necessary to review their historical development. There are considerable differences in the age of the industrial relations systems and their historical development. They can be placed on a continuum, at one extreme being the UK, a mature model born in the period of early industrialization, and at the other extreme, Spain, a much younger system that acquired its present form in the late 1970s, during the transition to democracy. However, a system’s age alone cannot explain all its contemporary characteristics (Edwards et al. 1992). The explanation of a particular model of industrial relations must be linked to the specific factors that have shaped the evolution of the model. For example, Edwards et al. (1992) identify three main variables in relation to the UK system: the continuity of experience, the centrality traditionally conceded to the workplace, and the role of the state. In the same sense, in this initial discussion of the regulation of trade unions, we focus on two defining variables; the legal/ institutional framework shaping industrial relations, and the role of the state. In respect of the legal/institutional framework, a high degree of regulation exists in Germany and Denmark, while in the case of the UK indu strial relations have been regulated more by custom and practice. The Spanish and Italian models also display a considerable degree of regulation and institutionalization, but have some distinctive characteristics. In the case of Spain, the industrial relations system has been strongly conditioned by the political, economic, and social changes associated with the transition to democracy. During the immediate transition period, characterized as peaceful and orderly, union strategy was subordinated to the consolidation of democracy rather

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than making industrial demands. The new democratic government rapidly developed a legal framework supporting collective organization and regulating industrial relations and union activity. Unions were incorporated into the main decision-making and consultative bodies in the areas of employment and social welfare. Therefore the development of Spain’s legal framework of industrial relations occurred in a relatively short period of time, and had no organic connection with union activity in the enterprise. The next step for the unions was to incorporate these achievements into their day-to-day role at enterprise level.2 In Italy, the industrial relations model has been influenced by the complexity that generally characterizes Italian social and political structures. As Ferner and Hyman point out, for some writers the Italian model is based on the institutionalization of collective bargaining, albeit weak, while others point only to the existence of shared understandings and a common adherence to the rules of the game (which are not always explicitly stated) (Ferner and Hyman 1992). In our opinion, this apparent contradiction is partly a result of the process of rapid change which has affected the model in the recent past. The successful ‘hot autumn’ strikes in 1969 mark a turning point within the Italian system, and an appreciation of their importance is essential to an understanding of its contemporary form. The strikes represented a break from the traditional model based on managerial authoritarianism, weak and politically divided unions, and underdeveloped collective bargaining. They strengthened the unions and increased their areas of influence in the 1970s. They also led to the institutionalization of workers’ individual rights. However, the decisions in relation to these changes were taken by the union hierarchies. This brought about a crisis of representation among unions in the early 1980s, provoked by the emergence of new collective organizations which challenged the unions’ claim to be the sole representatives of the labour force. The role of the state, an essential factor in explaining contemporary industrial relations models, also differs in important ways in the five countries in the study. While its central role is common, the degree and type of state intervention varies considerably. UK governments have tended not to become involved in the regulation of collective bargaining. When they have intervened, as in the 1980s, the state has sought to limit union power, for example by attempting either to restrict the right to strike, or to remove barriers to the flexibilization of labour markets. Therefore, as we will see below, this does not mean that UK governments have not enacted industrial relations legislation, rather that they have avoided introducing an institutionalized bargaining framework that supports collective employment rights. The opposite is the case in Germany, where the state has created a legal framework supporting the institutionalization of relations between the collective actors. Although this high degree of regulation has often been criticized, it proved to be particularly effective in adapting to the changing environment of the 1980s without major conflicts or traumas. The German state was profoundly affected by the political reunification of West and East Germany. However, the industrial relations system has been largely successful in maintaining a degree of stability throughout the difficult period which has followed reunification.

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In Denmark, the state also plays an essential role in industrial relations. However, Danish labour legislation has not sought primarily to regulate relations between the collective actors nor to protect workers’ rights. Rather, it has sought to provide a safety net of unemployment benefits, thus avoiding the need to impose rigid regulations on the enterprise. However, rising unemployment rates in the 1970s and 1980s have introduced strains in this system because of the burden placed on public expenditure. There was a historic turning point in the development of the Danish model of industrial relations and the role of the state at the end of the nineteenth century, with the signing in 1899 of the so-called September Compromise, an agreement finally reached after a series of conflicts between the then newly formed DA and DsF (now LO). Both parties (trade unions and employers) reached agreement on mutual recognition and established formal procedures for collective bargaining and conflict resolution. This agreement was subsequently given legal backing by the state through the Main Agreement which has been revised and updated three times since. The last revision, in 1987, introduced rules for the protection of union shop stewards. In the Spanish case, as discussed already, the contemporary industrial relations model has been strongly linked to the transition to democracy. The state played a central role in developing a process of national concertation. This process involved unions (although only one of the two main confederations participated in all three negotiating rounds), employers’ associations, and the government in tripartite negotiations and in the regulation of basic aspects of industrial relations. However, by the mid-1980s, this pattern of concertation had ended as a result of a number of factors. First, once they had played their role in the consolidation of the new democracy, the unions considered themselves entitled to exercise more freedom of action and felt less constrained by political considerations. Second, under pressure from their members and supporters and taking advantage of economic growth in the second half of the 1980s, the unions began to seek improved working conditions and significant advances in pay. Finally, the collapse of concertation was accelerated by the crisis of the relations between the PSOE and the UGT, a crisis that would subsequently be exacerbated by the UGT’s unity of action with the CC.OO. The Italian government has suffered from what Ferner and Hyman have called ‘legislative sclerosis’ (1992:532). By this, they are referring to a historical and political process of unstable and shifting coalitions that have frequently prevented political consensus and have necessitated the creation of a system of parliamentary checks and balances. This has meant that any industrial policy has had to be previously agreed by the collective actors before it can be implemented, a situation that has often led to an impasse or crisis. The development of Italian industrial relations from the late 1960s has been extremely complex because of the interaction of political and industrial interests within an unstable framework. We have noted briefly in this section the different historical developments which have shaped the industrial relations systems in the five countries in the study. However, it should also be noted that changes stemming from the globalization

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processes beginning in the 1970s have, as discussed in Chapter 1, also affected the models under discussion. Although the pace and degree of change differs from country to country, common developments such as greater competitiveness, the flexibilization of the labour market and the increase of temporary employment, and other deregulatory measures, can be traced. These have had a significant impact upon European models of industrial relations, as discussed in subsequent chapters. Union recognition In examining the comparative role of trade unions in the five countries in the study, it is important to consider how much formal recognition the trade unions enjoy. Subsequent chapters will examine to what extent formal recognition is translated into meaningful collective bargaining activity. We have already commented upon the tradition of ‘voluntarism’ (minimal state intervention) which characterises the UK model of industrial relations. This does not mean a complete absence of labour legislation (as noted earlier) but rather an absence of legal provisions supporting union-employer relations. Thus, unions are not recognized as the legitimate representatives of workers, nor are their rights and obligations delineated. Recognition only exists at a de facto level, as a result of the will of the participants. This tradition of voluntarism has been respected and even supported by trade unions and employers. It has been seen by trade unions as an effective means of avoiding hostile government intervention, while employers have tended to feel that more labour legislation would constrain their freedom to manage (Edwards et al. 1992). Only in the last decade have the UK unions begun to press for legislative provisions in relation to union recognition, as a result of the hostile environment they have faced in the 1980s and 1990s. In recent years, unions have looked to a new Labour government to introduce such provisions, and have sought to use the EU and, more specifically, the provisions of the Social Chapter regarding employees’ basic rights. This situation has made the trade union movement one of the major supporters of the EU within the UK. In the other four countries included in the study, we do find regulatory frameworks more supportive of union recognition. Legal recognition in Spain originated in the process of negotiation between unions and political parties during the transition to democracy. The first major step occurred in 1977 with the legalization of unions and of the right to strike. Second, the formal recognition of collective actors was embodied in the 1978 Spanish Constitution. Article Seven of the Constitution establishes freedom of association and action for both trade unions and employers’ associations, thereby allowing them to pursue their own economic and social interests. It also establishes that their internal organization and procedures should be democratic. The Workers’ Statute of 1980 provided the main framework for post-Franco employer-employee relations. Section Two established the right of all employees to elect delegates to represent them in negotiations with their employer. In practice, these elections are dominated by union ‘slates’. The Law of Trade Union Freedom in 1985, among other things, reinforced the trade union

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rights of the individual employee, protected the position of trade union representatives, and provided for various trade union facilities. Most important, it consolidated the position of the most representative trade unions (those which achieved 10 per cent of delegates elected in the country as a whole), giving them the right to participate in tripartite negotiations with the government and employers. Representative unions have also been eligible for regular government subsidies. A detailed regulatory framework has been an essential feature of Spanish industrial relations generally. The ability of unions to threaten to use the courts of law to bring recalcitrant employers into line on a range of issues has made it easier for the unions to establish de facto recognition in the enterprise. In Germany, legal regulation also plays an important role in trade union recognition. As in Spain, formal recognition of trade unions is provided by the Constitution while an additional framework of legislation supports workers’ representation, regulating collective bargaining between unions and employers and strengthening codetermination and participation rights. One of the most important measures was the Collective Agreement Act of 1949 (amended in 1969) which established the right of the parties involved to negotiate without state intervention and supported union recognition. Although there is no legislation specifically regulating the content of collective bargaining, a series of laws on workers’ rights in relation to issues such as pensions, health cover, etc., do influence the content of bargaining. As in Spain, certain individual labour rights were curtailed after the introduction of legislation in 1985 aimed at promoting employment. In the case of Denmark, we have already noted that the emergence of strong employers’ associations and trade unions has favoured an emphasis on collective bargaining rather than legislation. As with other areas of industrial relations, the institutionalization of the role of trade unions can be traced back to the September Compromise of 1899, an important part of which was the recognition of the trade unions’ right to organize and their role as legitimate bargaining partners. The state’s role has, however, been important as a mediator in situations of industrial conflict. The legal framework for industrial relations in Italy is extremely complex. The 1948 Constitution established the right to strike and to free association, but no legal provisions were enacted to regulate these rights until 1990. The Workers’ Statute of 1970, a product of the dramatic shift in the balance of power following the ‘hot autumn’, introduced one of the most comprehensive frameworks for individual employment rights in Europe in respect of dismissal and discipline. However, the Statute hardly touched upon the role of the collective actors in industrial relations. Therefore, the role and structure of trade unions is not regulated by legislation in any detail in Italy. Union rights in the Statute derive from the ambiguous concept of most ‘representative’ union which, as discussed below, corresponds to the three main union confederations. Collective rights, rather than being specifically assigned to the trade unions, are expressed in the form of individual rights to engage in collective action at the workplace. Although the Statute provides certain collective rights through the RSA (the workplace union representative structure), it does not regulate them in any detail. However, in spite of these ambiguities, and the

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emphasis on rights being assigned to individual employees, the Statute does implicitly support unions. The complexity of the labour legislation and the absence of precise statutory definitions helps to explain the mixture of part voluntarism and part legal regulation that makes up Italian industrial relations. In conclusion, the UK is the only country where union recognition is not to a considerable degree institutionalized at a national level. In the other four countries, however, there are interesting differences in emphasis in respect of the basis of institutionalization. In both Spain and Germany, legislation plays an important role, whereas in Denmark, and to a considerable extent in Italy, voluntarism has been more significant. Trade union structure and organization In each country there exist at least one or two main trade union confederations that embrace most of the trade union movement in the country and are recognized as having a representative role at national level. In the UK, individual unions representing 80 per cent of union members in the country are affiliated to the TUC. However, its representative strength is diluted by the diverse, and occasionally conflicting, interests represented. This hampers the development of effective confederal policies. The unitary character of the TUC reflects the fact that UK unions have never been sharply divided in terms of ideological orientation. The most important affiliates of the TUC in recent years are the general and public sector unions. Although in Germany we find three national confederations, the DGB is by far the strongest, representing about 80 per cent of all union members in the country. The DAG mainly represents salaried, white collar employees, while the DBB is composed of civil service unions. The three main Italian confederations emerged from a split in the CGIL (which had been established in 1944) as a result of ideological and political differences. The split resulted in the formation of the CISL, associated with the Christian democrats, and the UIL, of social democrat and republican orientation, whilst the CGIL became associated with a primarily communist trajectory. This identification of each labour organization with different political ideologies contributed to inter-union rivalry or, at best, to periods of unstable and temporary cooperation. Trade union relations have tended to reflect the country’s political instability. In Spain, the two principal confederations at national level are the UGT and the CC.OO. The former came into existence towards the end of the nineteenth century as a sister organization to the Spanish Socialist Party (PSOE), whose founders promoted both the party and the union. This explains the close relationship the UGT traditionally maintained with the Socialist Party. The CC.OO was founded during the Francoist dictatorship. Although the organization began as a loosely structured and independent opposition movement to the Franco regime, it subsequently developed informal and even organizational links with the Spanish Communist Party (the PCE). Both of these confederations group their members

THE NATIONAL INDUSTRIAL RELATIONS CONTEXTS 43

into industrial sectors rather than professional or occupational categories. In addition to these two main confederations (which taken together represent over 80 per cent of the Spanish labour force in the results of works council elections), there also exist several other confederations that have played leading roles in the past but now have much less significance. These include the CNT, of anarchist orientation, whose strength once rivalled the UGT, and the USO, with social democratic sympathies and, on occasion, allied to the UGT. The appearance of nationalist unions, in several of Spain’s regional autonomous communities, is a distinctive feature of the Spanish union panorama. The most significant are the ELA-STV in the Basque country (closely linked to the PNV, the Basque Nationalist Party) and the CIG in Galicia. We find a complex structure in Denmark of professional, craft, industrial, and general unions. Most of these unions are affiliated to the principal confederation, the LO, which represents over 65 per cent of the Danish labour force. Although far less representative than the LO, there are other significant confederations in Denmark, the AC and FTF which are composed primarily of professional and semiprofessional unions. In recent years, in a number of sectors, cartels have been formed to coordinate the union side for negotiating purposes. Three particular variables merit comment in relation to the structure of the trade union movements in the countries in the study—the degree of sectoral emphasis, the degree of centralization, and the position of professional/white collar trade unions. The German, Spanish, and Italian movements clearly prioritize the sectoral dimension of organization, albeit only recently in the Spanish case. The German trade union movement has often been pointed to as a model to which the UK unions should aspire because of its neat sectoral structure. In the case of Spain the prioritization of sectoral organization is a relatively new phenomenon. Traditionally the horizontal, territorial structures played a major role, increasing the unions’ capacity to mobilize workers across sectors. However, the inadequacies of the territorial structure in defending industrial interests have resulted, during the last decade, in an increasing emphasis being given to the sectoral structure. The Danish and UK cases are traditionally more complicated, being a mixture of horizontal and vertical organization. However, in Denmark, as bargaining has become increasingly decentralized to a sectoral level, so the formation of cartels (mentioned above), which group together the unions organizing in a particular sector, provides a much stronger sectoral focus. Even in the case of the UK, the effect of union mergers and reorganizations in the 1980s and 1990s has been to emphasize sectoral organization more than previously. In respect of centralization, the various sectoral federations in Spain and Italy find their autonomy somewhat limited by the role of the confederation. At the other extreme, the UK unions experience little constraint from the TUC. The German and Danish cases lie between these two extremes, with the DGB and LO respectively exercising relatively strong coordinating roles. In relation to the position of white collar/professional employees, in those countries where all-embracing, sectoral organizations prevail (Germany, Spain, and

44 EUROPEAN TRADE UNIONS

Italy), one tends to find the development of confederations of unions dedicated to their organization outside the principal confederations. In Denmark and the UK, where there is a more open structure, we find the development of individual trade unions concentrating on the recruitment of non-manual workers, often within the main confederations. Merger processes in most countries are likely further to transform traditional structures in the next decade. For example, in Germany, the number of DGB unions is expected to shrink to three or four (including a new ‘super union’) covering the service sector as a result of a merger between five DGB unions and the DAG. The ideological orientation of the trade unions and their links with political parties We can divide the union movements of the countries studied into two groups in respect of ideological orientation. In Denmark, Germany, and the UK, ideological and political considerations have tended to be subordinated to tactical and strategic concerns, whereas in both Spain and Italy the central confederations have their origins in rivalries between opposing political options. The excessively political or ideological nature of the trade union movements in Italy and Spain has been seen as a major source of weakness, causing disunity between, and sometimes within, confederations. Distinct from the ideological roots of the union movements in the study are the formal (and informal) links which they have with specific political parties. It is, perhaps, in the UK where these links are seen most clearly, since most of the biggest unions are openly affiliated to the Labour Party. One of the distinctive features of the UK industrial relations model is the fact that trade union affiliations are clearly delineated in the power structure of the party. This gives the unions substantial weight within the party, although the functional roles to be played by each organization have traditionally been distinguished by tacit agreements. Successive defeats in parliamentary elections during the 1980s persuaded the Labour Party that it would benefit electorally if it distanced itself from the trade union movement. As a result the relationship is no longer as close, although the system of affiliation to the party continues. The Spanish unions maintained close relations with political parties up to the mid-1980s. Although these relations were not formalized, there were often individuals who simultaneously held office in both union and party at the highest level. However, these strong relations became weaker after the PSOE formed a government for the first time. The trend towards a separation of union from party accelerated, and this was manifested in the 1988 General Strike, called jointly by CC.OO and the UGT against a PSOE government. In Germany a relationship of mutual understanding rather than formal affiliation existed between the DGB and the SPD. There are no specific structural links between the two. In Germany also, the links have become looser since the 1980s, particularly as a result of the differences that have emerged between the union and

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Table 3.1 Union membership density, 1950–95

Source: Waddington et al. 1996:466.

the party in relation to national economic and social policy. In Italy, the unions’ political identities are open and explicit. The three main confederations are clearly associated with corresponding political parties. Though there are no organic or structural links, these political allegiances have notably shaped Italian trade unionism and politics. Denmark appears to be the country where party-union relations have had least obvious impact upon industrial relations. The Danish unions continue to maintain both formal and informal relationships with the political parties, in particular with the social democrats, but both party and union have tended to respect the separate roles of the other, thus facilitating a political environment more receptive to, or at least respectful of, the role of the trade union movement. In conclusion, there seems to be increasing evidence that trade union movements are taking advantage of the distancing of their relations with political parties to develop greater autonomy from them and trade union unity of action (even if the distancing of relations has typically been prompted by the parties). There is also an increasing recognition that too great an identification with any one political party reduces a union’s ability to claim to represent all workers. Trade union membership In the last two decades, trade union density has declined in most European countries. The exception has been the public sector where density has tended to remain constant or increase. However, the intensity of the downward trend has varied considerably according to country. Rising unemployment, as a result of industrial restructuring, technological displacement, and the increasing deregulation of the labour market, is a variable which has made an important contribution to this trend. It has been suggested that high density rates can now only be achieved in advanced industrial countries when unions are able to engineer mechanisms which eliminate ‘free riders’. This could be a result of the establishment of closed shops or, more probably, the reservation of certain social benefits exclusively for trade union members. According to an OECD report, stable unionization rates of over 60 per cent may only be possible when

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unions have a stake in the social insurance and, in particular, the unemployment protection system of a country (EIRR 284 1997). Table 3.1 displays the evolution of membership density in the countries studied during the post-Second World War period. The case of Denmark supports the conclusions of the OECD report. The linking of union membership to unemployment protection in this country has been a significant factor in the maintenance of such a high density level. The biggest decline in density has occurred in the UK (the 1997 Labour Force Survey reports an overall density of 30.2 per cent). The abolition of the closed shop and the absence of institutional support for union recognition and the union bargaining role have been important factors contributing to the ‘free fall’ in union membership since the early 1980s. We can now see the operation of a vicious circle. The dependence of the UK trade unions on membership for recognition means that the decline in density has been accompanied by a reduced legitimacy which, in turn, makes union membership less attractive. Spain has by far the lowest density level of the countries in the study. However, the halving of the density level since the mid-1970s is misleading. Most commentators agree that the earlier figure was inflated. The unions’ eagerness to recruit new members in the immediate aftermath of the Franco regime resulted in a relatively uncontrolled distribution of membership cards to workers, who saw joining a trade union as making a symbolic commitment to democracy (rather than involving an obligation to pay a regular subscription). In addition, the unions overestimated their membership in order to legitimize their role as workers’ representatives in the early years of transition. Therefore a more accurate interpretation of the evolution of density in Spain would be one of low but relatively stable density from 1980. The low level of density in Spain has been attributed to a number of factors, including the youth of the trade union movement, and the high proportion of difficult-to-organize small firms in the Spanish economy. In addition, the works council electoral system from which the unions draw their representativeness and financial support is a more important determinant of union power than membership. Workers can show their support for the unions through their vote and can benefit from union activity without becoming a member. The representative system therefore tends to reduce the significance of union membership in a Spanish context. The German and Italian cases reveal modest declines in density, explicable by trends which have been affecting most trade union movements in Europe such as unemployment, the relative increase in importance of traditionally weakly organized employment sectors, and technological displacement. Trade unions in Europe clearly see the need to develop new strategies to reverse membership trends and subsequent chapters will highlight this aspect of union activity in the sectors studied. So far these strategies have had a limited impact upon membership. Limited progress seems to have been made in organizing younger workers, workers in small firms, women, and part-time and temporary workers.

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Table 3.2 Percentage of employees covered by collective bargaining, 1996–97

Sources: 1) Scheuer 1998; 2) Jacobi et al. 1998; 3) National Council of Economy and Work 1998; 4) Ministerio de Trabajo y Seguridad Social 1997; 5) Labour Market Trends 1998. Note a The Italian figures are based on a working population excluding the self-employed, which somewhat inflates the figures. They assume 100 per cent public sector coverage. Private sector industrial coverage is 35–40 per cent.

Collective bargaining There are three main levels of collective bargaining to be found in the countries studied; sectoral, company, and plant level.3 In four of the five countries the sectoral, multi-employer level is prevalent. The. exception is the UK where company- and plant-level bargaining predominate. The lack of a legally supported institutional framework for collective bargaining in the UK encourages this situation. Only in those companies, and, more frequently, plants where union organization is strong is the employer obliged to engage in collective bargaining. Thus, there are significant areas of employment in the UK where there is no collective bargaining. In the other countries this is not the case. It is true that the sectoral-level negotiating activity of a trade union may be handicapped if there are a significant number of non-unionized companies in the sector. However, normally the writ of the sectoral agreement does cover all companies in the industry. In these countries, although company- and plant-level negotiations often play a significant role in determining pay and conditions, in general the sectorallevel agreement is the most important. Typically, the sectoral agreements provide a framework of minimum conditions which cannot be worsened by company- or plantlevel agreements. The latter normally, therefore, play the role of supplementing or improving the terms of the sectoral agreement and adapting them to companyspecific needs. There is considerable variation in the type of sectoral, multi-employer agreement to be found in the countries in the study. In Germany the ambit is normally the region or Länder. In Denmark, most sectoral agreements have a national application. This is also the case in Italy where the 1993 Tripartite Agreement played an important role in consolidating the national sectoral bargaining structure and formalizing the hierarchy of negotiating levels in the country. In Spain, the situation is more complex. In some sectors there are national sectoral agreements, but still the most prevalent is the provincial level.

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The absence of a significant degree of multi-employer sectoral bargaining in the UK inevitably means that the proportion of the labour force covered by collective bargaining is much lower than in the other four countries, as Table 3.2 indicates. Despite the continuing importance of sectoral agreements, it is important to note the current trend towards decentralization. Sectoral agreements are tending to become less comprehensive, allowing for greater flexibility at enterprise level. It is seen by the unions to be of great importance that this decentralization does not proceed too far. The existence of a large number of small, non-unionized companies makes essential the continuance of the safety net provided by multi-employer negotiations. In Germany, the disparities which existed in enterprise conditions between East and West made inevitable post-reunification negotiations to introduce more flexibility. In 1991, the average wage in the former East Germany was 40 per cent lower than that of the former West Germany. The result was an agreement whereby companies in the East were given time to catch up with their western counterparts. Sectoral agreements tend to be of two to three years duration in relation to most of their provisions, except pay. In the case of the latter, revision clauses normally provide for more frequent review. In Denmark and Germany, there are specific provisions aimed at ensuring industrial peace. In Denmark, the government has the power to intervene when negotiations break down by extending the life of the previous agreement. In Germany, during the life of a collective agreement, the trade unions need a 75 per cent majority in a secret ballot to initiate a strike. The content of the sectoral agreements tends to be similar in all the countries studied, covering minimum wage levels, working hours and conditions, and, more recently, training policies, an item which is assuming increasing importance as a union strategy for protecting jobs. The rapid changes affecting Western industrial economies since the 1980s have modified the bargaining agenda. In order to increase productivity in the enterprise, employers have sought to maximize flexibility in areas such as working hours and the organization of work. This has demanded a response from the unions. In Denmark and Germany, the strength of the unions and the high degree of formal recognition they enjoy has enabled them to become fully involved in these new areas and approach them on a quid pro quo basis. In the other countries this has been less easy and the deregulation of the organization of work has often taken place outside the negotiating arena. The collective organization of employers reflects the pattern of collective bargaining discussed above. In the UK, membership of employers’ associations is relatively low. Many international companies which are affiliated to employers’ organizations in other European countries are not members of employers’ organizations in the UK. There is no legislative framework regulating employers’ associations in the UK, which in itself makes it more difficult for the unions to achieve sectoral agreements. However, there are a number of informal employer networks in various sectors which play a role in the coordination of employer bargaining policies at enterprise level.

THE NATIONAL INDUSTRIAL RELATIONS CONTEXTS 49

In the other four countries, the membership and degree of organization of employers is greater, reflecting that of the trade unions. In Germany, the majority of sectoral employers’ associations are members of the BDA (the German confederation of employers’ associations). Membership is higher among larger companies. Small firms are more likely to adopt a ‘free riders’ strategy, benefiting from collective bargaining without affiliating. Neither the BDA nor the DGB directly intervene in the sectoral bargaining process but rather play a coordinating and mediating role. The Danish employers’ associations have a high degree of recognition as collective actors and are coordinated by the DA, the national confederation. Even companies not affiliated to the relevant employers’ association normally adopt the agreements reached in sectoral negotiations. The Spanish and Italian cases represent a midway point between the low level of employer organization in the UK and the high affiliation rates found in Denmark and Germany. The high proportion of small companies in Spain and Italy weakens employer organization because they are much less likely to affiliate. Organization in Spain also varies according to sector. Employers in the manufacturing industry and the banking sector are significantly more likely to be organized. The coordinating role is played by the CEOE (the Spanish confederation of employers’ associations). The Italian employers’ associations, like the trade unions, tend to be politicized. For example, Confindustria, one of the largest employers’ associations with over 112, 000 affiliated companies, has been traditionally linked to the social democrats. This, together with the high proportion of small firms in the economy, has led to a more fragmented pattern of employer organization than is found in most other European countries. Confindustria attempted several times to engineer a reform of the employer representative structures in the 1980s without success. This failure, if anything, weakened the organization. Its membership is dominated by larger companies and companies in the manufacturing sector, although in recent years, the importance of small and medium-sized companies has increased. Industrial conflict Industrial conflict, as measured by strike incidence, has declined in all the countries during the last fifteen years, reflecting economic circumstances, the decline in union power, and an increasing emphasis on collaboration, which is taken up in several subsequent chapters. Union members seem to be increasingly conscious of the particular economic circumstances of their company and its competitive position. However, two qualifications should be made to this overall pattern. First, in a minority of sectors (notably areas of the public sector), the decline in conflict is less evident. Second, there has been a tendency to measure the incidence of industrial conflict by reference exclusively to strike activity. This no longer adequately reflects the incidence of conflict, given the increasing recourse to other methods of applying pressure such as overtime bans, go slows, protest demonstrations, etc. Notwithstanding these general trends there are differences in the incidence of industrial conflict in the countries in the study. Italy and Spain tend to consistently

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display a higher incidence of conflict compared with Denmark and Germany (the UK lies in an intermediate position). It is suggested that these differences are related to the degree of institutionalization of collective bargaining and workers’ rights, and to the relations between the trade union movement and political parties. The higher degree of institutionalization and stability in the Danish and German systems reduces the likelihood of confrontation, while the closer identification of the trade unions in Spain and Italy with political parties reduces the stability of the system. Conclusions This chapter has attempted to draw out the principal characteristics of the trade union movements and industrial relations systems of the five countries in the study, thus providing a wider comparative framework in which to locate the sectoral studies which follow. The UK has probably provided the most distinctive model with its low level of institutional support for collective bargaining and union recognition. This has meant that the power of UK trade unions has depended upon membership levels. They have thus had to expend disproportionate resources on organization simply to maintain their capacity for action. Their success in surviving as a credible force has only been possible due to the longstanding tradition and maturity of the movement. The Spanish trade union movement has a very different problem. The high level of formal recognition conceded to the trade unions (as part of the democratization process of Spain) guarantees them a significant role in industrial relations. However, they have had to pay a price for this formal recognition. The trade unions’ concentration on establishing democracy up to the mid-1980s, although necessary, resulted in a tendency to neglect the industrial demands of their members and supporters, which damaged their credibility. In addition, the representative system and weak membership do tend to encourage a relatively centralized movement which lacks effective rank-and-file organization in many enterprises. The trade union movements in the other three countries are by no means immune to the increasingly hostile environment in which contemporary trade unions have to function, with growing competition as a result of globalization, higher unemployment, and continuing pressure for greater flexibility in labour markets, and for cuts in the welfare state. However, they are not experiencing the same degree of crisis as in Spain and the UK, given their maturity and the extent to which their role is embedded in the respective industrial and political cultures of their countries. Notes 1 In this chapter, as reference is made to a very large number of trade union organizations, abbreviations have sometimes replaced full names. These are referred to more fully in subsequent chapters and in the list of abbreviations.

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2 In his book Working Class and the Return to Democracy in Spain (1996), Professor Robert Fishman develops an interesting analysis of the challenges faced by Spanish trade unionism during the transition. He identifies the political transition and the development of effective organization as the two principal challenges faced, particularly the latter. 3 We could also mention a fourth level of collective bargaining, concertation at national level. However, because in the countries studied it no longer embraces pay bargaining directly, we have decided not to include it here.

52

4 Electronics Mike Rigby

Introduction This chapter examines how unions have responded to a rapidly changing environment in the electronics sector. As electronics has been more subject to technological change and market globalization than the other sectors of the study, one would expect it to be a fertile arena in which to observe a developed, if not radical, trade union response. One also might expect to be able to identify a greater degree of convergence than in other, less globalized sectors. The appropriateness of such expectations is examined here. The chapter first considers the economic environment of the electronics sector. It then examines the management agenda for human resource management which is being driven by this environment. There follows an analysis of the industrial relations context in which the trade unions are operating. Finally, there is a discussion of trade union responses to the problems they face in the sector. Perhaps surprisingly, in view of its importance in advanced industrialized economies, electronics has not been established as a distinct sector within the Standard Industrial Classification (SIC). Its subsectors can be found in a number of different SIC locations.1 In practice, most of the discussion in the chapter relates to the consumer electronics, telecommunications, and radio and capital equipment subsectors. The other subsectors do not figure prominently because of the scarce presence of collective industrial relations in them. The chapter focuses upon manufacturing companies in electronics; it does not therefore include the distribution sector of the telecommunications or data-processing industries. The absence of a single classification for the sector inevitably has presented some difficulties in identifying and presenting economic data. This has often had to be aggregated to create an overall picture. On occasions data is only available for part of the sector or is aggregated into a wider sector such as electrical engineering. We have tried to be as explicit as possible in the text when these problems have occurred. However, this type of problem has not only existed in relation to economic data. Indices of industrial relations activity such as collective bargaining coverage and trade union density have tended to present similar problems, with the data for electronics

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Table 4.1 Production value (m.US$)

Source: Yearbook of World Electronics Data 1998, Volume 1—West Europe.

sometimes being insufficiently disaggregated from data on the engineering industry. Again, reference is made in the text to specific problems of this nature. The economic environment of the sector European electronics in a world context World production of electronics goods is dominated by the US, Japan, and Europe. The EU market for electronics is second only to that of the US in size. However, Europe is ranked behind both the US and Japan in respect of volume of production. The sector is extremely fast growing and, by the end of the century, food and allied products is likely to be the only manufacturing industry to rival it in size in the countries included in the study. The triad of major electronics producers each have their strengths and weaknesses. Japan specializes in the production of office machinery and dataprocessing equipment, components, and consumer goods. The US is strongest in the production of office machinery and data-processing and military equipment. Europe’s strongest subsectors are telecommunications and professional electronics, including defence and military equipment. Data processing and consumer electronics are thus dominated by Japan and the US. The Japanese volumes of production of consumer electronics and of semi-conductors are three and five times, respectively, those of Europe while, in respect of computers, European production is only at 60 per cent of the level of the US (Lázaro Lafuente 1994). Table 4.1 shows the comparative production value of the five countries in the study. It reveals the weight of the German economy in this sector, followed by the UK. In the global electronics league, Germany is in third place behind the US and Japan (with the UK in fifth place behind France). Denmark and Spain are relatively small contributors, with Italy occupying an intermediate position. In Siemens, Germany has the sixth largest enterprise in the world in the sector and, through Siemens and other large companies such as Bosch, it has been able to maintain a strong presence in the telecommunications and capital goods sectors. Germany is

EUROPEAN TRADE UNIONS 55

the world’s second largest exporter of telecommunications equipment. However, in consumer electronics, computing, and components, German enterprises have not proved to be as competitive globally. Many of the older East German companies have gone out of business. An exception to this is the microelectronics industry, which has been privatized. The German electronics industry as a whole has had a difficult time in the 1990s: in the early period of the decade it suffered from the ending of the post-reunification boom, recession, and the disruption of rebuilding the industry in the East, and production fell over the period 1990–93. From 1994–96 the sector returned to modest growth (World Yearbook of Electronics Data 1998). The second most important country in Table 4.1 is the UK, where electronics has been consistently the most rapidly expanding industrial sector, and, during the 1990s, has grown at around 20 per cent per annum, well above the European average (Federation of the Electronics Industry 1997). The UK is the European manufacturing base for PCs and an increasingly important semi-conductor source. These areas are dominated by North American-owned companies. The consumer electronics sector has been in trade surplus from 1989 onwards and provides 12 per cent of European exports. This subsector is dominated by Japanese companies. The UK has been a particular beneficiary of Japanese and US investment in the computing, components, and consumer electronics subsectors. This has occurred for a number of reasons, including the absence of barriers to inward investment, the existence of a good industrial infrastructure, a skilled labour force, relatively low wage rates, and good industrial relations. For the Japanese, the English language was also an attraction. The capital goods and telecommunications subsectors are also traditionally strong areas of the industry in the UK. The UK, for some time, has been the world’s third largest exporter of defence equipment and three of the top ten producers are UK owned. A particular feature of the electronics industry in the UK is its regionalization. Four regional concentrations of the sector can be identified. Silicon Glen, as the Scottish electronics industry is known, employs 55,000 people and in 1994 produced 30 per cent of Scottish manufacturing output. Wales, the M4 corridor, and, to a lesser extent, the North East are the other areas of concentration. In Italy, the two most important subsectors are data processing, with 28.8 per cent of the sector’s production, and telecommunications with 24.5 per cent. Data processing, however, underperforms in comparison with other EU countries. The difficult budgetary situation of the Italian government, which has curtailed one of the largest potential domestic markets for computers, and, more generally, weak demand from the rest of Italian industry, have restricted growth potential. The telecommunications subsector has been dominated by the merger of Italtel and Siemens, giving the new company half of the market share. Spanish electronics production represents 5.5 per cent of European production while Spain represents almost 9 per cent of the European market. Distinctive features are the dominance of small firms in the sector and the absence of any genuine Spanish multinationals. Telecommunications companies have formed the most significant subsector in Spain, being responsible for a third of total production

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in electronics as a whole. The subsector has been hit, however, by an increase in competition and a reduction of investment from public operators. Only one of the four major companies in the subsector, Amper, has Spanish capital (the others being Alcatel, AT&T, and Ericsson). The next most important subsectors are computer equipment and capital goods, including defence. The computing sector has, for some time, been in major decline in Spain. The European companies which did exist have disappeared, while North American and Japanese companies have reduced their commitment to a nominal level. The defence sector has been hit by a reduction in public investment. In consumer electronics, only one of eleven manufacturers had Spanish capital, the rest being companies of European, Japanese, or Korean origin. The Danish electronics sector is the smallest of the five countries included in the study. Until the end of the 1950s, the most important subsectors were radio and television manufacture and components. Since then, domestic production has been dominated by the professional electronics sector which in 1995 accounted for 61 per cent of goods produced (of the rest, 30 per cent was attributable to components and the remaining balance of 9 per cent was accounted for by consumer electronic goods). Lacking significant domestic markets and producers on a European scale, Danish electronics became subject to internationalization pressures at a relatively early stage of its development. Domestic companies, nearly all small, have tended to become geared towards niche products. For example, three Danish manufacturers have a 25 per cent share of the world market for hearing aids. Bang and Olufsen, the main domestic consumer electronics company, specializes in upmarket products sold on the basis of quality, craftsmanship, and design. In telecommunications, there is a strong presence in mobile telephones and modems. Another major area is control, test, and measuring equipment, which accounted for 20 per cent of total production in 1995. Globalization Globalization refers to the ‘growing economic interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology’ (World Economic Outlook 1997: 45). The globalized nature of the environment of the European electronics sector can be displayed in a number of ways. First, in each country, the sector is a major export contributor. Second, there is a high penetration of the domestic market by imports in all the

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Table 4.2 Electronics imports/exports, 1996 (m.US$)

Source: Yearbook of World Electronics Data 1998, Volume 1—West Europe. Table 4.3 The ten principal companies in the European electronics market, 1994

Source: Comisiones Obreras 1994. Table 4.4 Japanese production facilities in Europe

Source: EIAJ survey of full member companies as of 30 June 1997 (Electronic Industries Association of Japan 1998). Note: *Some production facilities are involved in more than one category.

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countries in the study. Table 4.2 displays the balance of imports and exports for 1995. All countries have a negative balance. In addition, only four of the ten principal companies in the European electronics market are of European origin, as Table 4.3 displays. This penetration of the European market by non-European multinationals has been accompanied by a high degree of foreign investment in the sector in the countries studied. Table 4.4, for example, indicates the distribution of Japanese production facilities in four of the countries and for Europe overall. Inward investment has been far more significant in the case of the UK, Spain, and Denmark than in the other two countries of the study. A further indicator of the globalized nature of electronics is the global transfer of new technology which has become a strong driving force in the sector. The short life cycle of products necessitates a high rate of innovation and therefore a high rate of investment in research and development (R&D). Whereas in the early 1990s, a new line of PCs could be expected to stay in production for two to three years, in the current fast-moving market, a notebook PC has a life of around six months. Companies have to develop new technology to survive and thus investment in R&D is a major area of expenditure. If companies cannot develop new technology themselves, they must obtain it through acquisition and merger. In this respect a significant development has been the formation of strategic alliances in specific projects to enhance the individual strengths of the parties involved and to save on the enormous development costs of leading-edge technology. The countries in the study tend not to be at the forefront of technological innovation in the sector, except in a limited number of cases. Germany, for example, the strongest of the five countries, has only one company, Siemens, among the twenty most important companies in the world in respect of innovation in electronics. Notwithstanding the fact that electronics in Europe tends to benefit from more investment in R&D than other industrial sectors, it still receives less than its main global competitors. An associated problem is that much of the inward investment in the sector in Europe is associated with assembly plants. The nonEuropean multinationals spend a relatively small amount on R&D and product design in Europe, and thus do not add a great deal to its technological base. This situation results in a high degree of dependency on technology from competitor countries, particularly in areas such as components, thus reducing the local sourcing of production. In Scotland, for example, only about 20 per cent of spending on subcontract work goes to companies based there. The globalized nature of the electronics sector has been emphasized by the concern which has arisen as a result of recent economic problems in Asia. In practice, the impact of the Asian currency crises may vary greatly according to subsector. Components manufacturers based outside the area will face increasing competition from producers whose costs, measured in dollars, have dropped sharply. However, manufacturers of personal computers, who can take advantage of

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Table 4.5 European electronics imports/exports by subsector, 1996 (m.US$)

Source: Yearbook of World Electronics Data 1998, Volume 1—West Europe.

the lower cost of components built in Asia, may benefit. On the other hand, manufacturers of capital equipment who have been accustomed to receive a considerable proportion of their revenue from the area could suffer significantly. Subsectoral differences So far we have emphasized, in general, the difficult competitive situation faced by European electronics companies, operating in a globalized environment, handicapped by a smaller market share and a lower technology base than Japanese and North American competitors. However, there are important differences between subsectors in this respect. Table 4.5 provides the ratio of extra EU exports to imports by subsector, showing that telecommunications and electronic instruments are the only subsectors with a positive balance of trade (although the size of this positive balance has been steadily deteriorating). Alcatel and Siemens are the two biggest telecommunications companies in the world, whilst seven European companies figure in the top twelve (Prieto Cuerdo 1994). Capital goods is the only other subsector with a similar profile. These subsectors have tended to be less globalized and where foreign capital has penetrated in a particular country it has been more likely to be European capital than North American or Japanese, e.g. Siemens in the case of Italy and the UK, or Alcatel in the case of Spain. Telecommunications is a subsector in which public sector procurement and government subsidy of national champions have played a significant role. However, the subsector is now subject to deregulation and its more protected position is changing rapidly, encouraging major restructuring exercises. For example, Ericsson, the Swedish group, announced in 1997 a reduction of 10, 000 jobs after seeing profits squeezed by deregulation and increased competition. The capital goods subsector is also coming under pressure because of the decline in demand for defence products. Consumer electronics, computing, and components all have extremely globalized profiles. In the consumer electronics subsector it is the Japanese companies (e.g. Sharp, Panasonic, Matsushita, Toshiba) which have been the main competitive

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Table 4.6 The ten leading computer/office equipment companies, 1996–97

Source: Financial Times 1998.

force both in respect of imports and inward investment. In the 1980s, in the face of this competition, a severe restructuring took place from which emerged two major EU-based companies, Philips and Thomson. One hundred factories throughout the subsector were closed, leaving only 165 still functioning, of which 113 are European owned (Miralles de Imperial Hornedo 1994). Companies with European capital represent 75 per cent of the production value but only 45 per cent of sales in the EU. In the computing sector, North American and, to a lesser extent, Japanese companies dominate. Only three European companies have consistently appeared in the top fifteen in the world—Siemens Nixdorf, Olivetti, and Bull—and, as Table 4.6 indicates, none of these are currently in the top ten. There was a marked slowdown in demand for data-processing equipment during the 1990s and this was not only a result of recession. The underlying growth rate lies considerably below the double-digit figures experienced during the 1980s. Two principal factors for this can be put forward: first, the saturation of the main markets which fostered growth, for example desktop PCs; second, the increase in add-on technology which has allowed users to increase performance without purchasing new machines. European manufacturers have found themselves squeezed between North American and Japanese manufacturers, with the former dominating the downstream market (systems and the expanding software area) and the latter dominating the upstream market (components). The European components subsector is weak in global terms. Less than 40 per cent of domestic demand is supplied by European manufacturers. It is important to distinguish between active components (semi-conductors, integrated circuits) on the one hand and passive and electro-mechanical components on the other. The latter represent more mature markets than the fast-growing sector of active components. European-based production of active components is dominated by multinationals such as Siemens, Philips and Thomson, whereas production of passive and electromechanical components is much more fragmented. South East Asia has become the

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most important location for the establishment of new manufacturing facilities in the subsector. There was an improvement in European performance in the components subsector in the mid-1990s. Year-on-year sales grew steadily, although the share of the global market did not noticeably improve. The gap in technology with the rest of the world was reduced, helped by the development of strategic alliances between European companies and partners from Asia and the US. The most important of these included Philips with NEC, SGS-Thomson with Hitachi, and Siemens with Toshiba, IBM, and Motorola. However, the fragility of this improvement was emphasized by Siemans’ announcement in November 1998 of its decision to sell all its semiconductor activities because of losses being incurred. Employment Despite the growing importance of electronics in Europe, the profile of employment in the sector is by no means one of sustained growth. Employment levels have, however, held up more than in manufacturing industry as a whole. Employment in all subsectors was negatively influenced by the recession at the beginning of the 1990s. As already indicated, there have been restructuring exercises with associated mergers and consolidation in operation in most subsectors. Table 4.7 indicates the labour force by country. Apart from the impact of recession and restructuring, employment in the sector has been particularly affected by the displacement of labour by technological innovation. It has been estimated that advanced technology regularly replaces 12 per cent of the labour content of products annually. In addition, the composition of the labour force in the sector has been changing significantly. The proportion of skilled manual workers has been declining and now tends to be below the average for manufacturing industry generally. Both the semiand unskilled manual and technical/professional sections of the labour force, however, have been expanding. In consumer electronics, for example, the typical employee is semi-skilled, often young and female, and involved in assembly work. In telecommunications and capital goods, on the other hand, as the emphasis on R&D and software has increased, so the proportion of manual workers has declined significantly and the typical employee is now more likely to be a graduate engineer. In a sense, therefore, a polarization of skills has been taking place within the sector which has, as we shall see, presented a major challenge for the trade unions. Conclusion This brief discussion of the economic environment of the electronics sector has identified a number of features common to the countries involved in the study. These include a highly competitive market in which non-European-based companies are often the strongest players, a need to be constantly involved in

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Table 4.7 Electronics employment by country

Source: Yearbook of World Electronics Data 1998, Volume 1—West Europe. Note: The German figures are revised from earlier editions of the Yearbook due to the introduction of the ‘Prodcom’ statistics which more accurately define the electronics industry.

technological innovation to add value to products, and a labour force which is subject to rationalization and a degree of polarization in respect of skill level. These variables affect all subsectors and countries, but to varying degrees. For example, the telecommunications and capital goods subsectors have proved to be stronger European global players (although liberalization may be modifying this situation). The strongest countries by a considerable margin are Germany and the UK, but they have different profiles. Whereas German strength has been built upon the telecommunications and capital goods sector and has been less dependent on inward investment, UK electronics has increasingly become dominated by foreign investment in the consumer electronics, computing, and components subsectors. Denmark, with its emphasis on niche production, and Spain, which has suffered from a high proportion of marginal plants, are relatively minor players. The Italian electronics sector has tended to be more highly protected and, consequently, is experiencing major restructuring later than in the other countries. The management human resource agenda The globalized and competitive nature of the electronics sector inevitably means that management’s human resource agenda is driven by priorities such as maximizing efficiency, eliminating wastage, and reducing costs on the one hand, and investment in human capital, skill enhancement, and R&D on the other. In practice, it is suggested, the emphasis in Europe sometimes tends to appear to be more on the former than the latter, and this is reflected in the commentary below. The concentration of inward investors on assembly work rather than design and development is partly responsible for this. This section seeks to summarize the human resource agenda of management in the sector and it is based upon relevant literature, the interviews with union representatives, and control interviews carried out with human resource managers.

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Flexibility Flexible working practices have increasingly been seen over the past fifteen years as a necessary condition for enhancing efficiency and reducing waste. Rigid demarcation in manufacturing industry, particularly between craft and unskilled workers, traditionally channelled different employee groups into fixed tasks, with little or no room for manoeuvre. A flexible workforce reduces the distinctions between different groups of employees and allows companies to devolve a number of previously ‘specialized’ tasks, such as inspection, to operator level. A UK survey suggested that a mix of multi-skilling and cross-skilling, where employees perform a limited number of different tasks within their own work area, is common in electronics (IRS 578 1995). Of thirty-three electronics companies surveyed, seven reported that all their production staff were completely multi-skilled (defined as meaning that every shop-floor worker was able to do any production task). Another seventeen respondents reported that some of their staff were multiskilled. There seemed to be no clear indication from the survey that a particular product or production method might necessitate a multi-skilled workforce more than any other. As well as task flexibility, hours and contract flexibility are becoming increasingly important for electronics companies. The maintenance of a large, permanently employed labour force working a standard hourly week is not attractive for companies in a competitive situation facing seasonal patterns of demand. A variety of strategies have been adopted by companies to introduce more flexibility into this area. They include annualized hours, which allow companies to require more work from permanent employees to meet production peaks without any need for overtime payment, as long as, at the end of the year, the hours do not exceed the contractual commitment. The reduction of the number of permanent employees and the use of temporary staff to deal with peaks of production demand is another common approach. There is also an increasing trend towards outsourcing in the electronics sector, with companies subcontracting work which previously would have been carried out by in-house staff, thus increasing flexibility. In 1997, for example, Siemens’ programme of outsourcing embraced 30,000 jobs in Germany alone. A final element of flexibility on the management agenda is in respect of pay. The replacement of collectively negotiated pay levels by individual, performance-related pay (PRP) has been another developing feature of the employer agenda. It is however much more common among non-manual than manual workers. It can also be a problematic strategy. A study of the implementation of PRP in a UK electronics company emphasizes the difficulty of using it as a means of effecting a change in a company’s culture (Proctor et al. 1993). Even in a situation in which trade union organization was very weak, the company was unable to persuade its workforce of the benefits of a system in which individual pay was based on individual performance. In addition, as well as employees’ lack of confidence in the system, it was also proving to be a costly exercise to administer. These reservations

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are leading some companies to re-evaluate the usefulness of PRP systems. Honeywell, Marconi, and Motorola, for example, are replacing PRP systems with competency-based structures (IDS 764 1998). The nature of the emphasis on flexibility varies in the countries studied. The most extreme positions can be found in Spain and the UK where one can find all of the above strategies in operation. In the more regulated environments of Denmark, Germany, and Italy, companies have appeared to focus primarily on task flexibility and outsourcing. Nonetheless this situation may change. For example, Gesamtmetall, the German engineering employers’ federation which also embraces the electronics sector, is seeking to introduce a flexible working week of between thirty and forty hours, while Siemens, as part of its cultural change programme, introduced, in 1996, PRP among 27,000 managers (IDS 433 1998). Production methods Part of the search for greater efficiency among electronics companies has involved other changes in production methods, in addition to increased flexibility. The IRS survey (578 1995) shows that the past fifteen years have been a period of rapid change for many electronics companies. Teamworking is the most common production method used and its introduction seems to date from the mid- to late 1980s. Generally, team composition reflects the type of product produced. For example, companies manufacturing consumer electronics tend to have teams that are semi-skilled. Companies involved in the manufacture of components are inclined to use teams with a skilled and semi-skilled mix or a blend of unskilled, semiskilled, and skilled employees. The size of team varied considerably in the IRS study with some companies having a range of three to twelve members, while in other cases the range was as high as sixteen to twenty-five and twenty to fifty. The typical company structure among the respondents operating teamworking included five or six layers between a shop-floor worker and senior management. As well as teamworking, other changes in production organization introduced by electronics employers include just-in-time (JIT) production, cellular manufacture, quality circles, and total quality management. The use of such techniques was not particularly influenced by subsector, but Spanish companies appeared to be less advanced in their use than the other countries in our study. Individualism v collectivism A third development in respect of the employer human resource agenda is a movement towards a more employee-centred and individual approach to employee relations. One feature of the individual approach is the introduction in some companies of PRP, discussed above. Other aspects include the development of more methods of communication, consultation, and participation which do not depend on trade union involvement but emphasize the direct relationship between line

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managers and their staff. Examples of such methods are regular briefing meetings between managers and staff, consultative committees, suggestion schemes, employee surveys, and newsletters. Such developments sometimes, but by no means always, go hand in hand with a movement away from collectivism, and therefore from trade union recognition, as a way of regulating employee relations. In this respect they can be seen as another example of the search for flexibility typical of the sector. However, there are considerable differences in the degree of movement away from collectivism. These differences are related to country of location, size of company, country of origin, and subsector. A movement away from collective regulation to the extent of union de-recognition was only discernible at a formal level on a wide front in the UK. Even in large organizations in the UK, such as ICL/Fujitsu and Siemens, a strategy of removing, or at least reducing, the formal role of the trade unions could be identified. In the other countries where, as indicated in Chapter 3, the institutionalization of trade union recognition is much stronger, most significant companies continued formally to recognize the role of trade unions, even if they sought to extend management’s prerogative. Small companies in all countries, with the exception of Denmark, appear to be far less likely to recognize trade unions. Such companies tend to be components producing firms of two types—those engaged in low-level manual assembly with relatively high labour costs, and those with a high level of R&D, concentrating on low-volume, non-standard products. An increasing number are the result of the outsourcing policies of larger enterprises. Their hostility to unionization may stem from concern about their ability to meet union wage claims or about union interference with their small-enterprise culture and the management prerogative. Often union exclusion is pursued by emphasizing the disadvantages of unionization, such as a negative effect on job security. In Germany, the movement away from union recognition via resignation from the employers’ association has been largely dominated by small companies. The question of employers opting out of collectively agreed provisions has for some time been identified as a problem which needs addressing by the social partners. It is in the East, however, that it has become an issue of wider dimensions. Two studies in Saxony in the engineering and electronics industry found evidence that employers were evading collective regulation by opting out of membership of employers’ associations or undermining/deviating from the conditions set by industry-wide collective agreements (EIRR 286 1997). The Saxon employers’ association lost 17.7 per cent of its membership through resignations between 1991 and 1994. However, by far the largest proportion of firms resigning from the employers’ association were small, independently owned, East German-based companies, with the level of resignations inversely proportional to the size of firm. Thus the reduction in the proportion of employees formally covered by collective bargaining was only 9.4 per cent. In a more recent development, employers in three eastern states, Saxony, Thuringen, and Saxony-Anhalt, broke away from the central employers’ organization, Gesamtmetall, in March 1998 and concluded an agreement with the Christian Engineering Union (CGM). This followed the breakdown of negotiations

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with IG Metall, the main obstacles being the latter’s wish to see the introduction of a thirty-five-hour week. It has been estimated that around 50 per cent of workers in the sector in the East are not covered by collective bargaining (EIRR 293 1998a:7). In Italy and Spain, similar, albeit more anecdotal, evidence exists of the propensity for small firms to evade collective agreements reached at multi-employer level. In the UK, the issue of recognition rarely arises for small firms, in the absence of multiemployer bargaining. The variables of country of origin and subsector appear to be associated. USowned companies seem to be more likely to pursue a clearly non-collectivist approach to employee relations. In the countries studied, these companies tended to be located in the computing and components sectors. They exhibit a strongly individualist culture without any concept of separate employee interests. They fear employees would be less open and more defensive if there was trade union presence. Management put considerable effort into convincing employees that the relationship between worker and manager is much more direct, healthy, and conflict-free without unions. IBM is perhaps the best example of this approach. Its non-collectivist strategy does not only depend on attractive reward packages, but also traditionally has included: • a high proportion of managers, thus improving career structures, as well as making line managers more available to deal with employee issues • the right of workers to take up problems with the next line manager in the hierarchy if they do not get satisfaction from their immediate line manager • a job security commitment, however implicit (although this has proved difficult to meet in the 1990s) • single status of employment conditions • an emphasis on training opportunities for employees • the establishment of consultative councils. (Dickson et al. 1988) In Scotland, IBM has been one of the main movers in the establishment of a nonunion cartel amongst a significant group of electronics companies. However, it is not only in the UK that the company pursues this approach. Even in the more unionfriendly environments of the other countries studied, significant union recognition does not exist in the company. In Spain, although the company observes the legal obligation to hold works council elections, it has normally managed to engineer a situation where no union members stand for election and employee representatives are ‘not affiliated’. In Germany, IBM has sought to avoid dealing with the main trade union, IG Metall, via the use of outsourcing and the transfer of parts of the company into the service sector, where negotiations could be with a more acceptable union. Other US companies in the computing and components sectors, such as Motorola and Hewlett Packard, tend to follow the IBM pattern. A study of greenfield sites in Ireland confirms this trend. Only one of twenty-three US-owned firms in the computer/software/information/data-processing sectors recognized a

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trade union (Gunnigle 1995). Investigations of the management practice in nonunion firms found that the decision to adopt a non-union approach was determined at corporate headquarters. The only US-owned companies which appeared likely to recognize trade unions were those which were established before the 1980s. The degree of non-unionism among European and Japanese companies, more concentrated in the telecommunications/capital goods and consumer electronics subsectors, is considerably lower than in US-owned enterprises. For example, of the fourteen Japanese companies in the IRS survey, eleven recognized trade unions. In the Irish study all European-owned companies and the majority of Japanese-owned companies recognized trade unions. In the case of the major European companies in the sector, such as Siemens, Philips, and GPT, there is a strong tradition of trade union recognition (although this did not mean that recognition meant as much as previously, as we have already discussed). Japanese-owned companies appear to adopt a pragmatic and calculative approach to trade union recognition rather than an ideological one. If they consider it will be difficult to avoid recognition, they are likely to react positively to it. However, when possible, they seek to ensure it is compatible with the model of trade unionism to which they are accustomed in Japan, based on a single union agreement. Enhancement of human capital The development of a more skilled and technically educated labour force has inevitably been a priority for companies in the sector. However, as we have already pointed out, the emphasis in Europe upon assembly rather than development and design work imposes limits upon investment in this area. In the consumer electronics sector, dominated by assembly work, the priority is to provide job specific training to develop the limited skills needed to meet production requirements. The labour recruited tends to be young and untried in the case of greenfield sites. In the other main subsectors the recruitment focus is more and more on graduate-level staff. In telecommunications and capital goods this is part of a radical process of changing the labour force profile. Conclusion This examination of company human resource strategies in the electronics sector has emphasized how companies are showing a considerable degree of convergence in their reactions to an increasingly competitive environment. Above all they have had recourse to flexibility (in its various manifestations) to improve efficiency and increase their control of the production process. The implications of this for the collective regulation of employee relations does, however, vary a great deal according to variables such as country of location, country of origin, size, and subsector.

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Table 4.8 Principal trade unions in the electronics sector

The industrial relations context Trade union organization and density The pattern of trade union organization in the electronics sector largely reflects the issues raised in relation to national trade union structures in Chapter 3. Table 4.8 summarizes the principal unions established in the electronics sector in the five countries studied, with the main categories of employee in membership. In none of the countries studied is there a significant trade union which recruits members exclusively in the electronics sector. The typical pattern is for union membership in the electronics sector to form part of a larger union or federation which focuses primarily on the engineering industry. This is certainly the case in Germany, Italy, and Spain. In Germany, IG Metall plays this role. There is also another, specialist union involved in the sector, the white collar trade union DAG, but it plays a minor role. We have also commented on the role in the East of the CGM. The CGM

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claims to have 110,000 members, but this is challenged by IG Metall which also points out it has achieved few delegates in works council elections. In Italy and Spain the engineering federations have tended to dominate the respective national union confederations (although the growth of public sector federations is changing this). The situations in Denmark and the UK are more complicated. There are more significant unions involved in the sector and the unions involved recruit in various sectors in addition to electronics, tending to specialize in particular grades of worker. However, the appearance of multi-unionism in Denmark is misleading when we examine in more detail how the unions operate in the sector. A cartel (or federal) structure has developed which groups together trade union members in one sector across traditional union boundaries. The cartels effectively take on the role of an industry-based union for negotiating purposes and provide a vehicle for the coordination of the activities of the individual unions. CO-Industry is the cartel which provides such a focus in the manufacturing industry, including electronics.2 Of less importance and outside CO-Industry are a number of professional trade unions which recruit in electronics. In the UK, all three trade unions recruit across a wide range of sectors. Only the AEEU can be characterized as primarily a manufacturing-based union. Both of the other unions have significant strength in non-manufacturing sectors, e.g. MSF in the finance sector and GMB in local government and public utilities. The AEEU is the union with most involvement in the sector. It is, by tradition, a manual-worker union with an original membership base among electricians. In telecommunications and capital goods it is present in most companies, but is rarely the majority union, having little strength among non-manual workers. In the consumer electronics sector, on the other hand, it is the majority union by some distance. The majority of MSF members in the sector are found among the white collar staff of the more established companies, e.g. Siemens, GPT, ICL. GMB/APEX was formed by the absorption of a white collar/administrative workers’ union (APEX) into a primarily blue collar union (GMB). Thus the union straddles both manual and non-manual workers. Its membership in electronics is concentrated among production workers in traditional areas such as defence and telecommunications, although it is also involved in a limited number of consumer electronics firms, e.g. Panasonic, often reflecting the regional strengths of the union. The fact that the unions involved in the electronics sector in the countries studied have a membership primarily outside that sector means that it is important to understand the strength of these unions as a whole, as part of the process of building up a picture of union organization in the sector. Inevitably, the fortunes of the

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Table 4.9 Union density in the electronics sector

Source: With the exception of the UK, the figures are based on 1997 union estimates. The UK figures are derived from the 1997 Labour Force Survey.

unions in their totality can have an impact upon their responses in relation to a particular sector of their membership. IG Metall, with 2.8 million members in 1996, is the largest trade union within the EU, with an organizational density in engineering of 46 per cent. This represents a decline of some 300,000 from the membership in 1992. The union’s financial position has necessarily become more difficult in the light of this pattern of membership decline. For example, membership subscription income declined in one year, between 1992 and 1993, by 40 million Deutschmarks. Strike pay commitments were able to be met but only by drawing on capital. Despite these difficulties, the overall financial position of the union is relatively stable, although mergers with the small and poorly resourced textile and woodworking unions will constitute an additional budgetary burden. The major unions in Italy, Spain, and the UK are facing similar problems to IG Metall. Only in Denmark is there a stability in relation to membership figures. The measurement of union density in the electronics sector is inevitably a problematic process. In addition to the normal problems of accuracy of union membership figures, we face the complication that in most cases the electronics membership is not disaggregated from larger groups, typically the engineering industry. Table 4.9 therefore must be interpreted cautiously. There is, however, reasonable certainty about one important feature which the table reveals—that, with the exception of Denmark (the particular membership characteristics of which have been discussed in Chapter 3), density in electronics is significantly lower than in comparable industrial sectors (engineering in all cases except the UK, where the data is for private sector manufacturing as a whole). There are important differences between subsectors in respect of membership. The computing/data-processing and components subsectors were associated with the lowest density of union membership. The estimates of density for this subsector were: Italy and Spain 10 per cent, Germany 12 cent, and the UK below 15 per cent. At the other extreme we have the telecommunications, defence, and capital goods

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subsectors where density figures were much nearer to engineering and manufacturing averages; in the case of Italy and Spain, for example, estimates of 40 per cent and 25 per cent respectively were given. Consumer electronics seemed to occupy an intermediate position between these two extremes. However, a feature of density which was emphasized by respondents was that, within the same company, there could be considerable differences, with one plant having high density and another negligible union membership. The differences between subsectors are consistent with the different approaches to collectivism which were commented upon in the previous section. Apart from subsector, the other major variables associated with differing union densities are occupational status and size of company. The higher the grade of employee, the less likely it is that they will be a union member. For example, of IG Metall members, 83 per cent were blue collar and 17 per cent white collar workers. In the UK, the 1996 Labour Force Survey reveals a density of 11 per cent for nonmanual workers and 28 per cent for manual workers in the sector. The process of change in the composition of the labour force in the sector therefore has serious implications for union density. In telecommunications, for example, the move from electro-mechanical to electro-digital plants has meant that a typical company profile is now of 75 per cent non-manual and 25 per cent manual workers. This development alone can explain a significant part of the density differential between electronics and the engineering industry, where manual workers still make up the majority of the labour force. Density is also likely to be significantly lower in small firms, which is particularly important in countries such as Spain which have a high proportion of smaller companies. Male workers are also more likely to be unionized than female workers, but the differential here is not particularly great. For example, in the UK, density among men was 20 per cent as against 17 per cent for women, according to the 1996 Labour Force Survey. The prospects for union density in the electronics sector are not good, given the particular configuration of variables and trends referred to above. As Findlay (1992) pointed out in her study of the electronics industry in Scotland, the subsectors which seem to be expanding—smaller, greenfield enterprises, data-processing and components companies—are associated with low union density. The subsectors with traditionally higher density, on the other hand, such as telecommunications, are more likely to be suffering from restructuring as well as experiencing a change in labour force composition from manual to technical/professional workers. It is important not to measure the strength of union organization only by membership density. In three of the countries, Germany, Italy, and Spain, works council elections are also important measures of union organizational strength and support. Here the situation of the unions in the electronics sector is more encouraging. In Italy, the three main federations obtained 90 per cent of both the votes cast and the delegates elected in 1994. Table 4.10 shows their dominance in major companies. In a minority of plants the COBAS (Italian rank-and-file worker

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Table 4.10 Italian works council elections, 1994 (percentage of vote achieved by major Italian federations in plants with more than 1,000 employees)

Source: Institute for Economic and Social Research (IRES), Rome.

committees) have had a significant impact. For example, at Sogei in Rome and Alcatel in Milan, more than 50 per cent of employees voted for COBAS candidates. In Germany, over 80 per cent of works council delegates were union members in 1995, while in Spain the federations of the two main unions, CC.OO and UGT, dominate the works council elections with the exception of the Basque country where the ELA-STV, a union only organizing in this region, is also significant. However, an important qualification to this picture must be introduced in relation to small firms. For example, in Germany, works councils must only be established where the workforce numbers more than fifty. Since a significant number of electronics companies, particularly in the East, fall below this trigger point, the electoral strength of IG Metall is not quite as impressive as it might appear (nearly half of all employees in the electronics sector in the new federal states work in companies with less than twenty employees). There is a similar problem of absence of elections in small firms in Italy and Spain. This discussion of union organization in the electronics sector has established that, in all the countries studied, it tends to be weaker than in other sectors such as engineering or manufacturing industry as a whole, albeit with important differences between subsectors. It also suggests that, given trends such as the increasing proportion of non-manual workers in the sector and the growing importance of subsectors where the trade unions tend to be weak, such as small firms and components, the future prospects for union organization are not favourable.

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Collective bargaining coverage Multi-employer collective bargaining with strong institutional, if not legal, support is the normal mechanism for regulating basic pay and conditions in the electronics sector in all the countries studied with the exception of the UK, although there are significant differences in the form of implementation. It should be stressed, however, that the coverage of multi-employer agreements is by no means comprehensive. In all countries, significant groups of employees and enterprises remain outside the scope of such agreements—a theme which is developed below. Typically, the multi-employer arrangements cover the engineering industry as a whole. Thus, in Denmark, a national sectoral agreement for the engineering industry also covers electronics companies. In 1995 a two-year agreement was signed with CO-Industry which provided for increases of 3.5 per cent per year. Respondents did not report any significant problems in company acceptance of this agreement, but one should be cautious about assuming near total coverage of the sector, despite the high union density. A survey carried out in 1994 estimated that only 52 per cent of private sector employees were covered by collective agreements, the shortfall being explained largely by the lower than expected organization of employers (Scheuer 1998). The current Danish sectoral pattern reflects a degree of decentralization in comparison with the pattern of collective bargaining typical until the early 1980s involving comprehensive, all-sector national agreements. This represents a return to the more decentralized forms of bargaining which were common in Denmark during the 1950s (Scheuer 1992). In addition, within electronics, enterprise-level union branches have become increasingly active within the bargaining process. Whereas standard working hours, pension schemes, minimum wage levels, and health and safety-related issues are resolved in national sectoral agreements, actual pay levels tend to be determined by local bargaining. As in Denmark, the German electronics sector is included within agreements for the engineering industry. Such agreements are concluded at state or regional level by IG Metall and the relevant employers’ association and are binding for all firms belonging to the employers’ association. A particular feature of the electronics sector for some time has been the existence of some larger company agreements which do not observe regional negotiations. In addition, electronics has also been part of the process of decentralization which has affected the engineering industry as a whole from the mid-1980s. As early as 1985, the trade union concluded a framework agreement which provided greater powers to works councils. Although the determination of basic pay is still within the scope of regional negotiations, issues such as supplementary pay awards and the organization of working time are now typically progressed via the works council. In 1996 it was estimated that between 80 and 90 per cent of employers in the engineering industry were covered by regional or company agreements (EIRR 286 1997). Commentators concur in suggesting that such a high level of coverage is under pressure. Opting out and deviation from collectively agreed provisions by employers

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has been the subject of a good deal of study. The fact that some employers are choosing to do this has led to calls to reform the current system which is seen as too rigid, particularly by small and medium-sized firms. In this context, we have already commented on the increasing trend for small firms in the East to opt out of collective bargaining arrangements. This is despite the existence of a hardship clause which recognizes the problems companies may experience in meeting the conditions established in collective agreements, and represents an attempt to stop resignations from the employers’ association and control deviation from collective rates. It is important, however, not to get the threat to the multi-employer bargaining structure out of proportion. German employers in the sector as a whole (if we consider the views of the employers’ organizations as still representative) are committed to upholding the present system of collective bargaining and are looking for ways of reforming it from the inside, such as trying to avoid the kind of confrontations seen in recent years by establishing a timetable for negotiations, conciliation, and arbitration. Detailed estimates for collective bargaining coverage in the electronics sector specifically have proved impossible to obtain. However, there seems to be a consensus that coverage for the electronics sector is significantly lower than that for engineering as a whole. This is for two reasons. First, there is a preponderance in the sector of the type of small and medium-sized companies most likely to opt out of employers’ associations. Second, there is a considerable degree of hostility towards collective bargaining in parts of the sector, particularly computing/data processing, e.g. IBM. The Italian electronics sector is covered by national collective agreements for the engineering industry. Three of these are relevant to electronics. The agreement drawn up by the trade unions with Federmeccanica, the employers’ organization representing the major private sector companies, is the most important, but there is also an agreement with Confapi, representing primarily small and medium-sized companies, and an agreement with Intersind, covering state holding companies. Via one or other of these three agreements most workers in the electronics sector are covered by collective bargaining. However, a less healthy situation as far as collective bargaining is concerned emerges when we examine the incidence of enterprise-level bargaining, provided for under the Tripartite National Agreement of 1993 to supplement national sectoral bargaining. Whereas in the engineering industry, as a whole, it is estimated that 52 per cent of companies, covering 90 per cent of workers, practise enterprise-level bargaining, respondents considered the coverage in electronics to be significantly less because of the presence of more small and ‘difficult’ companies in this sector (bargaining in enterprises with less than fifty employees is almost non-existent). No longer does the bargaining model associated with the larger company get transferred to smaller firms, as used to be the case. The employer agenda as far as enterprise bargaining is concerned is, in any case, extremely narrow. For example, the guidance of Federmeccanica, the employers’ organization for engineering, to its affiliates stresses that enterprises not previously

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involved in enterprise bargaining should not initiate it, while those already involved should limit bargaining to profit- and attendance-related pay. In Spain, the electronics sector is covered by engineering agreements negotiated mainly at a provincial level, which have legal force. In practice, it tends to be only small and medium-sized companies which directly implement provincial engineering agreements. Larger firms, typically with more than 150 employees, negotiate their own company-level agreements with the relevant trade unions and these usually improve upon the provincial agreements. The non-implementation of provincial agreements by smaller firms is seen as a problem in the sector, although the evidence is anecdotal rather than statistical. A more widespread issue is the exclusion of certain categories of employees in companies from collective agreements. Technical/ professional staff and temporary contract workers are two collectives often paid outside the terms of the collective agreement on a more individual basis. For example, one respondent estimated that in Alcatel, one of the most important companies in the sector, 3,800 out of 5,000 employees were employed on individual conditions. Contrary to the other countries considered so far, in Spain there is a discernible effort to introduce more centralization into collective bargaining, by the development of a national sectoral-level agreement for engineering, which would also include electronics. The absence of multi-employer bargaining distinguishes the UK from the other countries studied. Bargaining coverage in the UK depends on union organizational strength and employer attitude, in the absence of institutional or legal support for collective bargaining. The 1997 Labour Force Survey found that only 23.5 per cent of workers in electronics were covered by collective bargaining (as against a manufacturing industry figure of 33.4 per cent). This represents a considerable decline from the WIRS survey of 1990 which found 28 per cent coverage for electronics and 52 per cent for manufacturing (Millward et al. 1992). The collective agreements which do exist in the sector are mainly located at plant level. What company-level agreements did exist, for example in telecommunications, have been discontinued. Bargaining has been devolved, but only to those plants with strong unionization, to produce an extremely fragmented panorama. The sector tends to be a leader of pay in manufacturing industry (IDS 764 1998). The highest degree of coverage is found in Wales because of the strong union tradition in this region, the predominance of consumer electronics with its high proportion of manual workers, and the absence of US firms. At the other extreme is the M4 corridor, where small, high-tech firms predominate in a region with little union tradition. Scotland and the North East occupy a position between these two extremes. As in other countries, computing/data processing, components, and small firms are the sectors with least coverage (which in a UK context means hardly any). An important development in pay bargaining in the UK has been the development of individual PRP and the growing tendency for conditions to be attached to pay increases. Initially, employers tended to introduce PRP as a supplement to increases in basic pay but subsequently it has often replaced collectively negotiated pay increases, particularly among white collar staff. A

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variation of the conventional PRP scheme is the linking of pay increases directly to indicators such as a worker’s absenteeism record or length of service. This type of extension of the management prerogative is also evident in other areas. A useful discussion can be found in Findlay’s study of participation in electronics companies. In relation to the introduction of new technology, for example, few companies consulted with the unions prior to the implementation stage and only 6 per cent of companies had any formal agreement on technology with the unions (Findlay 1992). This examination of collective bargaining in electronics has established that, with the exception of Denmark, coverage is significantly lower than in other sectors. Even in countries with traditionally strong institutional support for collective bargaining such as Germany, collectivism is under some pressure. Summary of the problems faced by the unions in the electronics sector A common economic and technological environment has contributed to a high degree of convergence in the problems faced by the trade unions in the electronics sector in all the countries studied, although the intensity with which these problems have been experienced varies significantly. Four particular issues have created a very difficult operating environment for the trade unions. First, in most subsectors there have been periods of rationalization and restructuring which have resulted in a loss of employment and have put the unions on the defensive. The threat of job loss has tended to vary between subsectors and periods according to cyclical factors, technical change, and the presence of new competitive pressures such as those resulting from deregulation processes. In this context the follow-up interviews in 1997 and early 1998 took place at a time when union representatives were somewhat more relaxed on this issue than they had been in 1995. In addition, the unions have been faced with an increasing proportion of the labour force being employed in non-manual, professional and technical jobs in subsectors such as telecommunications, capital goods, and defence. As Italian respondents emphasized, as a result of this trend the traditional union leaders of the 1970s, nearly all manual workers, had either lost their jobs or represented minority groups within the enterprise and thus were unable to exercise significant influence. The non-traditional, often graduate, section of the labour force, many from a middle-class background, is proving very difficult to organize. Their work goals emphasize individual and corporate attainment and to achieve them they are willing to work long hours, enjoying considerable autonomy within a loosely structured hierarchy. They do not, therefore, respond readily to a collectivist approach to employment issues. Even in those areas where manual work still predominates, such as consumer electronics, the unions face problems of organization because of the youth of employees and the growth of atypical contracts (part-time and temporary).

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There has also been a significant decline in employer enthusiasm for the collective regulation of pay and working conditions. In some cases this is expressed formally in a desire not to negotiate with unions, as with IBM and other computing companies, or with small firms in Germany which have opted out of employers’ associations. In other cases, unions are being threatened with increasing marginalization by employer strategies such as individual PRP and outsourcing. The degree to which these problems are experienced varies considerably between the countries in the study. At one extreme we have the UK, where the situation has become acute for the unions in the absence of significant institutional or legal support for collective bargaining, and with a large number of inward investors not committed to collectivism. At the other extreme we find Denmark, where the institutions of collectivism are so firmly embedded that the unions do not really feel threatened. Germany, Italy, and Spain lie between these two extremes. Although at a formal level collectivism is still strong in all three countries, union representatives have commented that the reality is often very different as far as dayto-day industrial relations are concerned. In Spain, particularly, there is concern about the increasing number of employees whose conditions are not directly determined by collective agreements (whether non-manual staff, temporary workers or employees in small firms). In Italy and Germany, despite two-tier bargaining systems which seek to satisfy both employer demands for flexibility and the union need for collective minimum standards, and a stronger acceptance of the role of trade unions in the respective business cultures, collectivism is perceived to be under threat. Italian respondents emphasized that the reluctance of a large number of employers to engage in enterprise-level bargaining is a major preoccupation, particularly in the case of small firms and firms in southern Italy. Even where enterprise bargaining occurred, employers sought to restrict it to a narrow quantitative agenda, as discussed above. The unions were unable to make progress on issues such as work organization and the working environment. German respondents stressed the difficulty of extending collective conditions to the high proportion of small firms in electronics and to computing companies, as well as the difficulties created by employer strategies of flexibility and outsourcing. Finally, there was a consensus among respondents that a major reason for the sector’s weakness in global terms (and therefore the defensive position in which the unions found themselves) was the lack of government support, particularly in relation to research and development. Given the importance of technological innovation in the sector, the lower investment in R&D of European companies has been seen as inevitably creating a dependency on foreign technology, which has been a major factor in the structural weaknesses of the sector. Respondents tended to attribute considerable responsibility to governments for not being more interventionist and not taking a more strategic view of the importance of the sector, in order to avoid the development of such a technological gap. In particular, the need for governments to have concentrated on the development of more national industrial leaders such as Alcatel and Siemens was emphasized.

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For some respondents the unions were potentially involved in a vicious circle. Their weakness, as a result of a declining traditional membership base and increasingly hostile employers driven by the need to be competitive in a globalized environment, was reducing their ability to defend their members. This ineffectiveness, in its turn, was creating a crisis of credibility among the membership. Respondents tended to emphasize the isolation of the electronics sector from engineering as a whole and its very different culture of industrial relations. Nor did it seem possible to capitalize on the union strength in engineering (in most cases the strongest private sector union federation) to make advances in the electronics sector. Trade union responses In the final section of the chapter we consider the responses of trade unionists in the sector to the challenges they face. The material is structured according to the models of trade union response discussed in Chapter 2. The employer relationship In all countries the development of a constructive, dialogue-based relationship with employers is seen as an essential part of consolidating recognition and establishing a stronger role and credibility for the unions in the sector. Implicitly, therefore, there is less leftism and confrontation in the unions’ approach. With the exception of Spain, respondents also identified with an increasing decentralization of collective bargaining. In these respects, therefore, there was a significant degree of convergence in responses. However, within an overall pattern of convergence, interesting variations in response emerged. For Danish respondents the focus on a dialogue-based relationship with employers was not seen as a new departure. The emphasis was on continuity. The industrial relations system has been traditionally highly institutionalized and consensus oriented. The recognition situation of the trade unions was so secure that respondents did not perceive the need for change. In the other four countries, on the other hand, there was an acceptance that the union approach had evolved. In the German and Italian cases, respondents stressed co-management as being the ultimate objective being pursued at enterprise level. In Germany, from the 1980s, IG Metall has increasingly concentrated on building up the role of the works council. As early as 1985 the union concluded a framework agreement with employers’ representatives which provided greater powers for works councils. In part, this was a result of organizational necessity. Lay union representatives at enterprise level became difficult to identify, whereas employees have been more willing to take on the duties of works councillor. However, the union also believed that by creating a representational structure which was more firm specific, codetermination would be enriched. It hoped this development would result in the emergence of co-management models similar to those found in companies such as

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VW, Mercedes, and Ford, which it considered had resulted in a stronger partnership between management and worker representatives and had delivered higher productivity, improved working conditions, and job security. Respondents did, however, point out the difficulties of implementing such an approach. Lean management techniques and the increasing use of outsourcing were making the further development of co-management very difficult, while in the East a particular organizational problem existed. The close ties forged between management and employees before reunification (strengthened in some cases by shareholding schemes), combined with high levels of unemployment, have convinced many works councillors that their interests are more closely linked with those of management than with IG Metall. Italian respondents also emphasized the need to press for more participation and co-management at enterprise level. They gave examples where they had successfully sought agreements at company level which contain declarations on the value of industrial relations founded on participation, such as the following: The parties have recognized the necessity to reform the model of industrial relations in order to introduce elements to significantly widen and develop the participation of workers, through their representatives, in the decisions of the firm and in the achievement of objectives of common interest. However, as in the case of their German counterparts, Italian respondents stressed the problems in implementing this approach. Companies were under such market pressure that short-termism often over-rode formal agreements on participation. Union representatives needed to be better equipped with the necessary technical skills to be able to discuss micro-economic issues with the employer. Respondents of the UIL considered that legislation was necessary to establish union participation in enterprise management structures. In the UK, the union response was more complicated. The efforts by the trade union movement to develop a more partnership- and dialogue-based ‘New Unionism’ at national level are well documented. The TUC has been seeking to establish closer relations with the Confederation of British Industry in areas such as education and training, equal opportunities, preparation for UK membership of European Monetary Union, and labour market flexibility and employability. In the consumer electronics subsector, particularly in the case of greenfield sites, the unions, and especially the AEEU, were seeking to establish consensus-based agreements with the employer which typically featured limitations on the use of strike action (with the use of mechanisms such as pendulum arbitration), commitments to flexibility and efficiency on the part of the union, recognition of only one union with explicit support for union membership, and an employee advisory council meeting regularly with management. Respondents stressed that such an approach was the only means of achieving union recognition in the type of inward-investing company typical of this subsector. However, the emphasis in such

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agreements tended to be on institutionalizing consensus rather than establishing a framework for co-management. In the other subsectors in the UK where there is union presence, telecommunications, capital goods, and defence, the union response is less developed. Although national-level respondents emphasized the need to develop a partnership model with companies, this was often divorced from the reality faced by enterprise representatives who were involved in a concession bargaining situation, seeking to maintain a union presence in the face of often continual management infringement of their traditional areas of influence. An example of this is the introduction of PRP instead of union-negotiated collective pay increases. The union response initially has been to seek to oppose PRP directly but this has only tended to be a successful response in the case of manual workers. If direct opposition fails, the unions have sought to represent their members by seeking to influence the nature of the PRP scheme (as well as emphasizing the other services they can offer to members if they cannot negotiate collective pay increases, e.g. offering legal advice and individual representation). In the worst-case scenario, in the absence of a stable relationship with the employer, union representatives are reduced to guerilla action to discomfort management, e.g. calling in the health and safety inspector. UK respondents emphasized the importance of legislation being enacted by a Labour government to strengthen the union position in relation to recognition. The legislation subsequently proposed by the government, although by no means fully meeting trade union aspirations, does go some way towards creating a more favourable climate for union recognition. In the case of Spain, respondents suggested that the unions have changed their approach from confrontational trade unionism to one based on negotiation wherever possible. However, this change is not perceived in the same way by respondents at different levels within the union organization, especially in CC.OO. At national level it is seen as part of the process of maturation of the trade union movement, facilitated by the degree of recognition afforded by employers. Enterprise-level respondents, on the other hand, interpret the change as resulting from trade union weakness because of the difficult circumstances faced within the sector. In Spain, comanagement does not yet appear to be on the union agenda. As well as the emphasis on moving to a more dialogue-, if not co-management-, based relationship with employers as a means of consolidating the union position, a number of other practical approaches were used to deal with actual or potential nonrecognition situations. IG Metall, in the face of the outsourcing threat, in those situations where works councils were largely ‘unionized’ before outsourcing occurred, has sought, with some success, to establish that the terms and conditions of the sectoral agreement should be applied to employees in the outsourced company. As an example of this approach, an agreement was concluded in 1998 with Siemens which provided for 6,500 employees in independent business divisions to enjoy terms and conditions in future following the engineering agreement, albeit with a six-month delay (EIRR 293 1998a). The union has also

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sought to bind new companies to sectoral agreements by persuading employers’ associations to put pressure on them to affiliate. In Italy, FIOM-CGIL is in the early stages of developing the concept of one agreement for one product, as a counter to outsourcing and the fragmentation of agreements within the same company. This is on the basis that if the originating company can control the whole production cycle, regardless of the formal distinction between enterprises, it can also negotiate an agreement with the relevant unions which could have a general application to all companies involved in the product. This initiative would involve constructing a ‘union side’ for negotiating purposes, reflecting the stages of the production cycle. The Piedmonte Branch of the FIOM-CGIL, which covers Olivetti as well as a high concentration of engineering companies, has proposed creating product-based union coordinating bodies to pave the way for a single agreement for all who work on the same product. In the UK, as well as seeking a legal solution, respondents stressed the importance of approaching inward investors at an early stage, even before the construction of their factory, to discuss the union’s role. Often this involved seeking the help of development agencies and local politicians in arranging such meetings. Only in Spain was there a focused response to the problem of lack of recognition in small firms. The Spanish unions have established teams of officials at local level to specialize in approaching and seeking to organize small firms. In order to make involvement with a union more attractive to the small firm, the trade unions have increasingly sought to offer them advice and help as part of their approach. Training is an area of strategic importance in this respect. The Tripartite National Agreement on Continuous Training enables the unions to initiate occupational training schemes which officials approaching small firms can then offer to make available to their employees (such an institutionalized involvement in occupational training helps to consolidate the union role with employers more generally by providing a mutually advantageous area of activity). In addition, the Spanish unions’ efforts to establish a national sectoral agreement for engineering, including electronics, can be seen in part to be motivated by the need to strengthen the authority of multiemployer bargaining in relation to small firms. Inevitably, an emphasis on dialogue in union-employer relations has had implications for negotiating tactics. Respondents indicated it was harder to convince workers of the necessity for strike action than previously. Although in Germany, Spain, and the UK, it was stressed that the threat of sanctions was still used by the unions, usually action was limited to demonstrations rather than sustained action. Respondents considered they were more likely to have recourse to legal and procedural mechanisms. For example, in consumer electronics in the UK, union representatives used the threat of pendulum arbitration at the final stage of procedure as a means of applying pressure on management to reach agreement earlier. A greater decentralization of collective bargaining was seen as inevitable except in the case of Spanish respondents (as noted earlier). However, interesting differences emerged in respondents’ evaluation of this process. For Danish and Italian respondents it was seen as an opportunity to be exploited. Thus, in Denmark, a

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division of labour has been developed between enterprise-level union branches and national sectoral negotiators. Enterprise-level representatives are encouraged to take the initiative. While standard working hours, pension schemes, and minimum pay are negotiated at sectoral level, basic pay is agreed at company level and relatively few employees receive the sectorally determined minimum rate. Similarly, in Italy, the facility for enterprise-level bargaining established in 1993 is seen as providing an important avenue for improving on the results of the national/ sectoral agreement. A recent agreement covering more than 6,000 employees at Candy (the consumer durables manufacturer) illustrates the kind of enterprise-level agreement the unions are aiming for. The agreement provided for the company pay award to link increases to the achievement of targets aimed at improving quality and productivity, and for the strengthening of joint consultation procedures, as well as changes in the grading structure and an increase in the number of part-time contracts. The unions are seeking to extend enterprise bargaining to as many companies as possible and want to make it obligatory in companies where it is requested by union representatives (a development which is consistently opposed by employer representatives). German respondents, although they appreciated the need to make some response to employer needs for flexibility, viewed with more anxiety the further development of a two-level bargaining structure. As indicated earlier, respondents saw the need to strengthen the role of the works council in the enterprise as a means of consolidating the union position and extending co-management. Following framework agreements at sectoral level, the works council has become increasingly involved in plant-specific issues such as the organization of working time and supplementary pay awards. A recent union proposal has been to agree at multiemployer level a raft of different agreements—companies could then choose from these ‘building blocks’ according to their needs. However, respondents were also concerned to protect the multi-employer bargaining structures, weakened because of resignations from employers’ associations and outsourcing. The scarce presence of works councils in many smaller companies emphasizes how weak collectivism would be in the absence of multi-employer bargaining (Addison et al. 1997). Respondents in the UK were in a different situation. In most cases plant bargaining was the only level which existed. It was not seen as realistic to aspire to other levels, including company bargaining. Indeed, some lay representatives were concerned that company-level bargaining might result in the conditions of their members being diluted to the level of workers in the more weakly organized plants of their company. Others preferred to negotiate with managers they knew and trusted rather than corporate-level executives (there was, however, perceived to be a need to coordinate union policy between plants within a company via regular meetings of representatives). In consumer electronics, the employee council often had a significant role and respondents emphasized the importance of ensuring that employees elected on to such bodies were also active trade union representatives. Unlike in the other countries, respondents in Spain were seeking to introduce a greater centralization to collective bargaining structures. Union policy was to

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establish a national sectoral agreement for engineering (including electronics) in order to set a framework of minimum conditions. This would enable them to avoid the duplication of effort associated with the current provincial-level structure. The unions would then seek to improve on national minimum conditions through more localized negotiations at company, regional, or subsectoral level, e.g. electronics. In 1998, this policy reached initial fruition with the signing of an agreement with the engineering employers’ federation which established a national sectoral negotiating structure. Among the issues within the competence of the new structure are types of employment contract, the scheme of occupational/ professional classification, geographical mobility, health and safety regulations, training, working hours, and issues stemming from legislation. In relation to pay, the agreement provides for general principles to be established which can then be applied in negotiations at provincial and enterprise level. A priority of the unions is to seek to establish, through the new structure, salary minima for each of the seven professional categories in the sector, and to make progress on reducing working hours. The new agreement is seen as a first step towards the achievement of a full pay and conditions agreement for the sector. The desire of the employers’ federation to consolidate its own role has facilitated this process so far. The bargaining agenda The literature reviewed in Chapter 2 suggested a change in emphasis from quantitative to qualitative bargaining issues. To what extent is this visible in the electronics sector? A measured assessment of responses would suggest that such a change in emphasis is occurring, but only to a quite limited degree. Again we found a relatively high degree of convergence in responses. Most respondents agreed that the traditional bargaining agenda had become much more restricted with a focus primarily on pay and employment security. No longer do the unions normally present a long ‘shopping list’ to employers. In addition to pay and security, the other principal issues put forward are pensions, training, working hours, and equal opportunities. The narrower focus of the unions in the presentation of claims was partly related to the more difficult climate in which negotiations were taking place. A shorter list also fitted in with a more dialogue-based approach to employer relations because it reduced the number of potential areas of friction. In respect of wages and salaries, there appeared to be a greater recognition of the need to take into account the employer’s ability to pay at the point of settlement, in addition to factors such as the level of price inflation and the ‘going rate’. An example of this in Germany has been the hardship clause included in proposals to harmonize pay between East and West by a staged process. The hardship clause acknowledged the difficulties firms were experiencing in meeting the conditions set in collective agreements and enabled a temporary deviation from the conditions of the collective agreement to be negotiated at the request of an employer or works council (EIRR 286 1997). Respondents in the UK indicated that negotiators had to

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be more sophisticated in their arguments and general approach than previously. More emphasis was placed upon producing detailed documentation to support claims and negotiations were not as ritualistic as previously, with a more open dialogue with employer representatives and more information available about company plans and performance. Spanish respondents referred to the need to make pay sacrifices in order to save jobs. The unions’ recent agreement with the telecommunications company Sintel is an example of this, providing for pay increases equal to 50 per cent of forecast inflation for 1998, as well as improvements in productivity and flexibility. A major pay issue for the unions was the need to control incentive/bonus schemes. In general, the unions sought to ensure they were organized on a group basis. The Italian unions were particularly keen to encourage such schemes, both to enhance earnings and as a way of encouraging companies to engage in enterpriselevel bargaining, provided they were based on productivity and not profitability, the latter being more susceptible to influences which are beyond workers’ control. For example, when Olivetti introduced in 1988 an incentive scheme based on the group’s profitability which, after a fall in profits, negatively affected pay, the unions were eventually successful in getting the scheme withdrawn. They have been less successful in the case of Bull and Italtel where a relationship between pay and market trends has also been established. It was the UK and Spanish respondents who faced the most concerted employer pressure in relation to individual incentive schemes and terms and conditions. We have already noted the difficulties which the UK unions had in rolling back PRP schemes for non-manual workers in sectors such as telecommunications, capital goods, and defence. Respondents could only try to influence implementation by seeking to ensure every employee received a minimum increase, increasing the size of the global sum available, negotiating the procedures for allocating increases, and supporting appeals by members against the increases awarded to them. In Spain, respondents had no obvious answer to the growing number of employees appointed on terms not provided for in the collective agreement, although it was hoped that achieving a national sectoral agreement would put more moral pressure on employers to observe collective conditions. The restructuring which has affected much of the electronics sector has elevated job security to the top of the bargaining agenda for many respondents. The establishment of a partnership-based relationship, which meant the unions were involved in strategic decisions on products and markets, was an important part of the trade union strategy for protecting jobs. It was hoped that, by being involved in such decisions from an early stage, the threat of job losses could be avoided. As a vehicle for strategic discussions, in Italy, the unions have established national and regional economic observatories in conjunction with employers. In Denmark, the unions have commissioned a series of studies and seminars jointly with the employers’ federation to evaluate the strategic position of the sector and its future. German respondents emphasized the importance of developing further the involvement of the works council in strategic decision making within the enterprise

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and quoted examples of this happening, particularly in larger companies. In the UK, unions stressed the importance of involvement in discussions with employers on product development, future investment plans, and diversification from defence. In practice, however, representatives were disappointed with their progress in this area. Danish respondents pointed out the difficulty of engaging in dialogue with smaller firms whose overall strategic capacity is, in any case, extremely limited. A similar point was made in Italy where the results of the economic observatories have been disappointing so far: ‘the intensification of processes in this sector has reached such a point that the firms themselves are not able to make real, concrete plans.’ As well as involvement in strategic discussions with employers, Danish, German, and Italian respondents particularly emphasized the importance of taking part in economic development discussions with local/regional governmental agencies. In Germany, this typically involved the establishment of regional study groups to draw up regional development plans. The pressure for these groups tended to come from the local level of the union. Training and flexibility were two issues which respondents mentioned as being particularly important for the protection of employment. Continuous training was seen as promoting greater stability of employment, by enabling workers to adapt to technical change. The development of multi-skilling was perceived as an important insurance policy for workers in the sector (the union involvement in training is taken up in more detail later in this section). The unions also recognized the importance of contributing to the efficiency of the enterprise by facilitating flexibility. In the view of one of the UK HRM managers interviewed, the degree of cooperation forthcoming from the unions in the area of flexibility was ‘incredible’. An example of this was the willingness to accept annualized hours. When more directly faced with the threat of job loss, a partnership-based approach to managing the situation with the employer still typifies the union approach. Most representatives considered direct opposition no longer practical. The Danish metalworkers’ union has traditionally taken an active role in helping firms in difficulties to restructure and has provided help directly in the rescheduling of debt and the extension of credits. Joint external approaches with the employer to external agencies to secure orders, and thus employment, were often mentioned as examples of this approach. In Italy, the management and unions of the main telecommunications companies had jointly approached STET, the public telephone monopoly, for new orders and investment. In Denmark, joint approaches had been made to secure public procurement contracts for threatened firms and investment pledges from employee-controlled pension schemes. Generally, the use of legislative remedies to compel employers to adopt less traumatic methods of cutting their labour force, such as natural wastage, early retirement, and voluntary severance, has also increased. Notwithstanding the similarities in response noted above, interesting differences in emphasis emerged between countries. In the UK, respondents increasingly favoured seeking some form of job security agreement from the employer to ensure that any cutbacks are not too traumatic. It was considered that, after several years of

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restructuring, companies were now reduced to their core labour forces and should be able to avoid drastic action in a time of difficulty. A job security agreement, involving a more planned approach, would typically include provision for training and retraining, a no-compulsory redundancy commitment, a good package of incentives for voluntary severance and early retirement, and an agreement on the use of temporary workers. In the consumer electronics subsector, the view was put forward that the stronger relationship between management and unions which had developed in the context of consensus agreements would result in redundancies being introduced as a last resort and cutbacks being handled more humanely than before. The concept of work-sharing as a means of protecting employment only figured in German responses. In particular circumstances respondents were willing to contemplate firms reducing working time and pay with union agreement. An engineering sector agreement in Baden-Württemberg in 1997 on phased retirement fits in with this approach. The agreement took place in the context of the 1996 framework legislation to promote a phased transition to retirement (IDS 431 1997). The agreement provides for employees aged at least fifty-five to work part time for up to five years before they retire, with pay averaged over the whole period at 82 per cent of their previous net full-time pay. Implementation of the scheme is dependent on the conclusion of a voluntary agreement between individual employers and works councils. Poorer conditions can be agreed at plant level if this will preserve jobs. Where no voluntary agreement has been reached, employees still have a right to phased retirement, but under the less favourable statutory minimum provisions which means that employees can begin phased retirement from the age of sixty-one. Respondents in Germany also continue to see an overall reduction in hours as part of their strategy for protecting employment. IG Metall is seeking movement towards a thirty-two-hour week. Spanish respondents were particularly concerned to stem the considerable growth of temporary contracts which had occurred during the last decade. The unions agreed in 1997 a reform of the labour market which, in return for concessions which made dismissal less expensive for employers, created a new form of indefinite contract. A priority of respondents was to use the new agreement in the sector to reduce the number of temporary contracts, by converting existing temporary contracts into indefinite ones and ensuring that new contracts were offered on an indefinite basis. Government incentives to encourage employers to use the new form of contract were seen as an important factor in this process. Early evidence points to the reform being successful. In the first year following implementation, almost a million indefinite, open-ended contracts were created (EIRR 293 1998). Like the German respondents, Spanish representatives also prioritized a reduction in the working week and the creation of new work opportunities via reductions in overtime and early retirement. The approach to job protection of UK respondents could be contrasted with that of other countries. It tended to focus more exclusively on the protection of the existing labour force. For some respondents, for example, it was seen as a useful

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strategy for companies to operate with a significant margin of temporary staff, e.g. 10 per cent, because this provided a cushion to safeguard the employment of permanent staff in periods of low demand. The German and Spanish respondents, on the other hand, were also concerned about the creation of new employment opportunities and the interests of the unemployed. Thus campaigning on creating employment across the sector and preserving unemployment benefits formed an important part of their responses. Of the more qualitative aspects of the bargaining agenda, occupational training was the area which figured most prominently, and it had a number of dimensions. As we have already noted, training was considered of strategic importance in the protection of employment by making workers more flexible and adaptable. Access to training extended the promotion and career opportunities of workers. Importantly, it was also a manifestation of the more partnership-based approach to relations with employers. It was an area where conflicts of interest between unions and management were not as inevitable and where unions could become ‘embedded’ in a collaborative relationship both at sectoral and enterprise level. In most countries the unions have become directly involved in the organization and delivery of occupational training. In Spain, the two major unions deliver a significant proportion of occupational training for the unemployed and also manage jointly with employers the implementation of the Tripartite Agreement on Continuous Training. The engineering federations (including electronics) are most active in the area of continuous training. At enterprise level, management have to consult union representatives about any training plan within the remit of the Tripartite Agreement for which they require external financial support. In Italy, both at national sectoral and regional level, the unions have given considerable priority to occupational training, and bilateral agreements with employer representatives to improve the training on offer to workers have become more common. Even in the UK, where institutional training arrangements directly involving the unions at sectoral level are largely absent, training was still considered to be of strategic importance by respondents. The AEEU had established a training college to provide courses for members to enable them to update their skills—a provision which it also offered directly to employers in the sector. The GMB was seeking the reintroduction of a training levy on employers to finance continuous training. MSF considered training to be a particularly important issue for its primarily non-manual membership because of the relationship between training and promotion and future career possibilities. However, an area of potential conflict with employers in respect of training was access. Representatives emphasized the need for access to training opportunities to be as wide as possible within the enterprise whereas the employer approach tended to be more restrictive, particularly where older workers were concerned. There was also evidence that the expectations of the training area held by some respondents sometimes did not match reality. The developed view articulated by full-time officials had not always been translated into concrete activity and agreements at enterprise level.

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The second qualitative area of importance to respondents was the development of various new management techniques. Respondents typically divided such techniques into two categories: ‘soft’ techniques embraced such practices as teamworking, quality circles, autonomous work groups, and improved communications, while ‘hard’ techniques included PRP and individual contracts. We have already noted the hostile response given by representatives to ‘hard’ techniques. In relation to ‘soft’ techniques, on the whole, positive views were put forward (although the experience of them in Spain was limited). Respondents in Denmark, Italy, and Germany typically welcomed such initiatives as benefiting employees. The introduction of teamwork was seen as having an affinity to union demands of the 1970s for the humanization of work. If anything, there was regret that companies did not have the courage to implement fully some of the more progressive techniques. For example, in the case of autonomous work groups, companies did not sufficiently modify the role of middle management and increase delegation. In the UK, representatives were more sceptical about the value of ‘soft’ techniques and were concerned that management would use them to weaken the relationship between the trade union and its members. All respondents emphasized the importance of engaging with employers in the development and implementation of ‘soft’ techniques. Among the important issues for representatives in respect of teamworking were ensuring that team briefings are two-way communication exercises, negotiating that the team brief should be given to union representatives in advance, so that they can raise any problem before it is passed on to line management, and establishing that representatives could attend and make inputs into team briefings. Respondents were also interested in team leaders being elected. IG Metall initially attempted to put forward union representatives for the job of team leader, but the marked decrease in the number of lay representatives has made this approach unworkable. There was an acknowledgement that the implementation of ‘soft’ techniques had brought home to the unions the need to improve their own communications with members to counter the impact of the management initiatives. The approach of the Italian unions to teleworking in Alcatel and IBM displays union efforts to influence the impact of new techniques and the effect of the latter upon communications with members. In the case of Alcatel, the union reached agreement with the company that teleworking (which initially involved only thirteen employees) should be voluntary and that the reference for working hours should be the national sectoral agreement. Workplace representatives are allowed to communicate with the teleworkers by fax and e-mail and regular meetings are arranged between the works council and company to monitor the development of this type of work. The IBM exercise involved 4,000 employees. The unions carried out a survey of members’ working conditions and are now seeking to reach a comprehensive agreement on teleworking with the company, including more acceptable working hours (which averaged forty-five hours in the survey but in some cases reached fifty hours per week). The company has agreed to the establishment of an electronic noticeboard for teleworkers, containing information on union

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activities. The Italian unions are now seeking to set such enterprise agreements within a national framework agreement on teleworking. In addition, CGIL has organized a series of meetings throughout Italy to brief its officials and delegates on the subject. This consideration of the bargaining agenda has examined respondents’ perception of quantitative and qualitative issues. Quite a high degree of consensus on priorities has been evident. The discussion has noted the increased significance of job security and employment protection among trade union priorities. The emphasis on job security has been related to a more ‘realistic’ approach to pay demands. The data provides evidence of an increase in interest in qualitative bargaining issues such as training and management techniques, but not to the level of involvement discussed in Chapter 2. It would seem that caution is appropriate in this area. Certainly there was no indication that qualitative issues would displace pay and job security as priorities, particularly given the threats to employment existing in the sector. It was also interesting to see the inter-relationship between quantitative and qualitative issues. Progressing training objectives was perceived as being functional for job security and a vehicle for developing a more partnershipbased relationship with the employers. The approach of respondents to issues in general reflected the more dialogue- and partnership-based bargaining relationship identified in the previous section, and representatives seemed to be seeking ways of handling issues such as job security which maximized the potential for problems to be managed jointly with the employer. Political involvement The literature discussed in Chapter 2 emphasized the need for contemporary unions to complement the focus on the enterprise with active political engagement both to ensure a supportive legal context for collective bargaining and establish a role in national economic management in order to safeguard the interests of their members. Within the countries studied we find very different traditions in this respect, as noted in Chapter 3, and this was reflected in the responses in this area. The main interest of UK respondents in political involvement was to achieve legislation which would improve the situation of the trade unions as far as recognition was concerned. Their emphasis was very much on using political involvement to attain legislation which would enable them to engage in decentralized collective bargaining independently. We found little aspiration for a corporatist relationship with the government which would involve the unions in a wider management role within the economy. This is not to say that respondents did not see relations with political representatives as important; for example, the AEEU had formal relations with nineteen members of Parliament and six members of the European Parliament whom it sponsored (all from the Labour Party). However, these relationships were still perceived rather instrumentally as facilitating the achievement of relatively narrow union objectives in the legislative area or preserving threatened jobs.

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In the other four countries there was a wider perspective on political involvement. The German, Italian, and Danish respondents identified the need for a more comprehensive and consistent form of political intervention at both regional and national level. In Italy, representatives pointed to the tripartite agreement of 1993 which established a national framework for collective bargaining, the trade unions’ role in pensions reform and establishing national budgets, as well as the involvement of the government in the amelioration of labour force cutbacks, as examples of such intervention. As Locke and Baccaro (1996) indicate, the unions had committed themselves to working with the government and organized business on a broad front. German representatives particularly emphasized political involvement at the level of the Länder and saw it as important to hold regular meetings with ministers in the economic and social affairs areas. Economic development was seen as a particularly important area. In Denmark, also, wideranging political involvement was viewed as being important. Regular meetings between the president of CO-Industry and senior members of the cabinet are seen as quite normal. In Spain, we also found a recognition of the need for political engagement, but there seemed to be less stability and mutuality in union-government relationships than in the three countries previously discussed. The organizational weakness of the Spanish unions seems to make them more dependent on government support than in other countries, and this would appear to have shaped the pattern of political involvement. In recent years this has been dominated by supply-side issues such as training and labour market reform, within a largely government set agenda (a relationship which has been characterized as fragmented corporatism (Lawlor and Rigby 1994)). A number of respondents noted a distancing of relations with the traditional parties of the left: in the case of the UK with the Labour Party, in Germany with the SPD, and in Spain with the Socialist and Communist Parties. To a considerable extent this distancing was promoted by the political parties themselves, which were seeking to occupy the middle ground of politics and saw very close union links as an embarrassment in achieving this objective. Representatives in the UK wanted the Labour Party’s help in government in creating a more favourable climate for union activity, but noted with dissatisfaction some current developments in the party and its lack of consideration for and consultation with the trade unions. A recent development in this context has been the ending of the tradition of union sponsorship for Labour members of Parliament, following a decision by the party’s national executive to eliminate direct sponsorship of members of Parliament by outside bodies (although unions will no longer be able to sponsor individuals, they will still be able to offer support to a Labour-controlled constituency). In Germany, a similar trend could be identified. Divisions within the SPD, reflected in the very different attitudes to industrial relations and social policy of the prospective candidates for the Chancellorship, illustrate the fluid nature of union-party relations. The distancing of parties and unions in Spain has passed through a more overt process. In the aftermath of the ‘divorce’ of the UGT from the Socialist Party and of CC.OO

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from the Communist Party, union officials were discouraged from holding office in the parties. An important factor in the Spanish situation was the view in the unions that they needed to show they had independence from the parties in order to establish their credibility with the workforce. This is not to say that there is not some uneasiness in the Spanish unions about the extent to which the ‘divorce’ has progressed (particularly in CC.OO where a significant minority want closer links with the United Left). The responses from Denmark and Italy however are different; Danish respondents felt that, if anything, relations with the Social Democratic Party had become stronger, while in Italy, strong relations existed with the parties of the centre-left coalition, albeit based on the principles of union autonomy (which were established from the beginning of the 1960s and exclude formal links and the mixing of union and party responsibilities). Inevitably the nature of the government in power can affect the ability of the unions to intervene politically. Thus IG Metall tends to find it easier to exercise influence in those Länder governed by the SPD. During the 1980s, the UK unions were faced with governments with little interest in collaboration. However, respondents in all countries emphasized their recognition of the need to work with a wide spectrum of political parties, not only the parties of the left. IG Metall, for example, maintains relations with a wide-ranging network of political contacts which extends from the Christian Workers’ Committee within the CDU to the PDS, the party of former communists in the new federal states (although it has experienced some ideological difficulties in maintaining this latter relationship). In Spain, there existed the view among some representatives that union relations with the new Popular Party were more effective than they had been with the Socialist Party. It was felt that the new government was more able to engage in social dialogue than its predecessor (which had experienced four general strikes). In Italy, the break up of the Communist Party had facilitated a more pragmatic approach to political relations on the part of the trade unions, while CO-Industry in Denmark had managed to maintain more than tolerable working relations with right-wing coalition governments as well as with those of the left. Even in the case of the UK, where relations with the Labour Party were formally still strong, a recognition among respondents of the need for pragmatism in party political relations was evident. Although we have noted a recognition of the importance of political intervention in all countries studied, this tended to be seen in narrower terms by UK respondents. The history of voluntarism in the UK and the difficult relationship which had been experienced with Conservative governments of the 1980s clearly contributed to this difference. However, the fact that the UK unions are not knitted into a strong confederal structure also limits the national political focus of respondents. Relations with the membership The literature discussed in Chapter 2 stressed the need for unions to reexamine their relationship with the membership. Three particular issues were highlighted: the

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need for decentralization, the importance of organizing non-traditional groups of workers, and the desirability of representing the non-work interests of members as well as those directly associated with the workplace. A strong focus on membership issues was evident in all the countries except Denmark where membership density was so high and stable that the area was not given much priority in responses. Apart from the importance of the union role in unemployment insurance, respondents from that country also mentioned the significance of the apprenticeship system as a means of socializing young workers into the union. In the other four countries, respondents attributed considerable importance to developments in membership recruitment and union organization. In respect of recruitment, there was a movement away from an emphasis on consumer-oriented services such as financial packages. This is not to say that such services did not continue to be developed and offered (developments in this area are considered below), but rather that they were not considered important in recruiting new members. These conclusions are similar to those reached by Sapper (1991). Respondents stressed that workers joined unions for more traditional reasons, such as security and representation in the workplace. Individual, non-work-related services were seen as being more useful in helping to retain existing members. In IG Metall a special group had been set up at national level to review recruitment problems and recommend new strategies. There has also been an attempt to modernize the image of the union in order to appeal particularly to younger employees who tend to be apathetic towards union membership. Beginning in 1992, the union implemented a programme designed to decentralize its structure and provide members with greater scope for participation in decision making at plant level. This involved reducing the authoritarian nature of the executive and redefining the full-time official’s role so that it became more facilitating and strategic. Other measures included the establishment of smaller, more approachable, ‘people-friendly’ administrative offices and the opening up of some of its advisory services to non-members. Italian respondents understood clearly the problems they faced in recruiting members—the unions were seen as ‘good deathbed companions’ in the light of their inability to stem job loss in the sector. They expressed anxiety about the gap emerging between the union hierarchy and members at enterprise level (hand in hand with the emergence of alternatives such as rank-and-file committees—the COBAS—within the companies). There were expectations that recent changes in the workplace representative structure would improve the image of the unions and create more involvement, although it was pointed out that elections had still not been held in many workplaces. At confederal level, the CGIL, reflecting a concern with the increase in the number of atypical workers such as homeworkers and the self-employed, had established a new union organization directed at this group (NIDIL) in 1998. Spanish respondents inevitably saw recruitment as an important issue, given the low membership in the sector. Major preoccupations in this context were the relationship of the works council to the union branch, the need to find ways of

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positively discriminating in favour of union members, and organizing small firms. The non-union-based works council was seen to co-exist uneasily with a strong union branch and to dilute the union identity at enterprise level. It was therefore seen as important to strengthen the role of the union branch. In relation to discriminating in favour of union members in order to encourage recruitment, a commonly mentioned approach was to seek to establish a union levy on nonmembers in recognition of the union role in negotiating terms and conditions, although no examples were given of the existence of this practice. Given the high proportion of the labour force in the sector employed in small firms, recruitment and organization in this area was given some priority. Teams of officials had been set up to target small firms. As a way of gaining entry, as already indicated, the initial emphasis was on the help which the union could offer to the company. Given the greater importance of membership density for union recognition in the UK, it is not surprising that the most developed responses in relation to membership recruitment were to be found among the UK responses. Increasingly, an emphasis was being put on effective organizing as a means of achieving membership increases, with a focus on the added value which the unions could offer through representation in the workplace (rather than through external services). Developments in Australia with the ‘Organizing Works’ campaign, and the US unions’ attempts to change union culture, appeared to have been influential with both the AEEU and MSF. The AEEU has established a number of initiatives and systems to improve recruitment and organization. Ten field officials have been appointed with a special responsibility in this area. They have been recruited so that their profile fits that of the people they are seeking to recruit, i.e. in consumer electronics, often young and female. In companies like Panasonic, where the union has a single-union agreement, by arrangement with management, the official spends a number of days in a plant (wearing a company uniform and an AEEU cap and logo) talking to workers about the union and the advantages of membership. As well as this special organizing initiative, every official has to give a priority to recruitment and target, at any one time, three companies for special attention, as well as completing a monthly questionnaire on recruitment. The AEEU’s first priority was to improve membership in areas where the union already had significant membership, which meant increasing the density in the consumer electronics single-union agreement companies from the 40 per cent range to 60–80 per cent. After existing areas of membership came companies on greenfield sites (‘goldmines’). In such companies it was very difficult to establish a nucleus of membership without employer support and therefore the union’s aim was to approach the company at an early stage and complete a single-union agreement, in the expectation that the company would then encourage union membership. Small firms also figured in the AEEU’s response and the practice was to approach companies, located typically on an industrial estate, and indicate how the union could help, particularly in the context of coming legislation on workplace representation.

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MSF has, similarly, increasingly adopted an organizing emphasis with respect to membership recruitment, seeking to introduce a new corporate culture, ‘Organizing Matters’, with a focus on organization and recruitment in the workplace. Like the AEEU, MSF has appointed field organizers throughout the country who do not deal with negotiations but direct their attention to a target list of companies and concentrate on improving organization and membership, emphasizing the importance of workplace representation to workers, rather than individual services. This approach is expected to reduce the extent to which the union centrally has to deal with individual members’ issues by increasing the ability of local union organization to resolve such problems. Being a predominantly white collar trade union, MSF had also introduced initiatives which it felt would be particularly attractive to this category of employee. It had established an Information Technology Professionals’ Association for members in this sector, to provide an autonomous forum to develop policies on professional and industrial issues as well as specialist advice, discounts on training packages, hardware and software, and access to an electronic communication network. The union had also entered into a mutually supportive relationship with professional engineering bodies such as the Institute of Electrical Engineers via which the value of the complementary role of both types of organization could be emphasized to employees. In addition, the production of detailed and wellresearched policies on the sector and its future, which could be used in lobbying, presenting evidence to select committees, etc., was felt to be particularly attractive to the white collar, professional employee. As well as this emphasis on recruitment, there were other areas where responses indicated an increased sensitivity to membership issues. A number of respondents, particularly in the UK, mentioned efforts to improve communications with members. The GMB, for example, had introduced a policy that correspondence from members should receive an initial reply within two working days. MSF carried out regular questionnaire surveys of members on key policy areas. The introduction of a stronger sectoral focus to the union structure was also considered by respondents in Spain, the UK, and Denmark to be an important means of making more effective the representation of the membership on industrial issues (a sectoral focus on engineering, if not electronics specifically, was already well established in Germany and Italy). In Spain, as a confederal policy, the role of sector-based federations is being built up at the expense of the provincial and regional structures. In the electronics sector not all respondents supported this development. Within CC.OO, enterprise-level representatives, in particular, argued that when the territorial structure dominates, union activists are not as divided ‘on the ground’ and the capacity to apply pressure is greater. The unions also held occasional national meetings of representatives from the electronics sector. In the UK, the GMB has been reorganized into ten sectorally based divisions. A similar process has been taking place within the AEEU with, additionally, the appointment of a national official for the electronics sector. MSF has appointed national officials with responsibility for electronics and information technology

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respectively, and expects to establish a national forum where electronics representatives can meet. The union had also established a manufacturing ‘team’ at head office; it consisted of three national officials, three research officers, and three administrative staff. However, there still existed a feeling among some lay representatives that the industrial section of the union was not adequately resourced, given that it represented 55 per cent of the total membership. In Denmark, also, it is possible to identify a movement towards a sectoral emphasis. In the engineering industry, which subsumes electronics, the cartel structure, which groups together union members in that sector, cuts across traditional organizational boundaries. The cartel, CO-Industry, has effectively taken on the role of a sector-based union. This type of development was seen as essential for dealing with the increasingly complex industrial relations situation within the sector. Greater trade union unity and, in some cases, mergers were also seen as contributing to a more credible, focused, and effective union offer. In Denmark, the development of a sectoral cartel has also meant that unions had to cooperate more than before. Although individual unions still organize their members separately into branches at enterprise level and each branch elects its own shop steward, the branches of the different unions typically elect a senior shop steward who coordinates all union activity within a company. In addition, responsibility for overseeing the situation in a specific group of companies tends to be allocated to one particular trade union in the cartel. In Germany, IG Metall has absorbed the textile clothing union (GTB) with 200,000 members, and the wood and plastics union (GHK) with 161,000 members into its 2,750,000 membership. In Spain, there has been an increasing unity of action between the UGT and CC.OO during the last decade. In 1988, the unions jointly called a twenty-fourhour general strike. In 1996, significantly, the two confederations initiated a coordinated collective bargaining strategy to extend the terms of reference and content of bargaining and to lay down bargaining priorities aimed at maintaining employment levels and improving employment security. However, it is important to stress that a significant number of representatives at enterprise level were less than positive about unity. Enterprise-level representatives tended to emphasize the problems of achieving unity at company level, because of the different strategies and tactics used by the two unions, the traditional culture of confrontation between them, and personality differences. In addition to greater unity between the two major unions, there have also been significant federal mergers in both the UGT and CC.OO involving the electronics sector. In CC.OO, there has been a merger of the engineering and mining federations, and in the UGT a merger of the engineering and construction federations, to create a federation representing 25 per cent of the union. A similar process of consolidation has taken place in Italy. The CISL, for example, has in recent years reduced the number of federations from twenty-one to sixteen. The objective is to reduce the eventual number to ten, which could involve reducing the present five industrial federations (electronics is included in the

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engineering federation) to three or, as an alternative, introducing an intermediate body below confederal level to coordinate the existing industrial federations. In the multi-union environment of the UK, there has been considerable merger activity. The AEEU was a product of the union of the AEU and the EEPTU, MSF of the union of TASS and ASTMS, while the GMB had merged with APEX. Nor has such activity necessarily ended. There was interest among respondents in both unions in a merger of the AEEU and MSF, which would have considerable industrial logic and establish an ‘allthrough’ manufacturing union (attractive to both manual and non-manual workers). Although for the larger AEEU this was obviously an attractive proposition, there was also increasing interest in the concept in the MSF. The introduction of a lay executive by the AEEU made a merger more possible because it introduced a greater compatibility between the structure of the two unions and already the MSF General Secretary was talking about a closer relationship between them. Inevitably a number of factors contributed to greater unity or mergers. The reduction in differences because of political realignments has been important in Spain. Political and structural compatibility were relevant factors in most mergers. The hostile environment facing the unions and their weakening financial position were also important variables. However, usually there was also the expectation that merger/unity would increase the credibility of the union and open access to new groups of union members. How are we to evaluate these developments in respect of union membership and organization when measured against the emphasis in Chapter 2 on the development of a more open and participative political culture and the need to appeal to a wider group of workers? Although respondents in all countries, with the exception of Denmark, were focusing upon issues of membership and organization, it is suggested that only in the German and Italian cases did respondents perceive the relationship of the member to the union in any sense in power terms. It was only in these two countries that respondents were conscious to any significant extent of a debate about the decentralization of power within their union. Indeed, in the German case, a process of decentralization had begun. In the UK and Spain, the membership emphasis tended to be more ‘top down’, preoccupied with how to recruit and organize the membership more effectively. That is not to say that this fitted the concept of ‘managerial unionism’ discussed by Heery and Kelly (1994). Certainly, in the UK, unions such as the AEEU and MSF are consciously seeking to avoid an individually based servicing culture by focusing on the need for building effective workplace organization. However, this approach does not pose questions about the power structure of the union; its aim is to establish a level of organization which will enable the union to offer effective representation. Coming to the issue of the organization of non-traditional groups, there was certainly recognition of the importance of the issue. Respondents referred to the development of more specialized literature directed at groups such as women and white collar workers. We have already seen that the MSF was seeking to develop initiatives particularly aimed at white collar workers, that the Spanish, and to a

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lesser extent the Italian, unions were focusing on small firms, and that the AEEU was appointing recruitment organizers whose profiles were more similar to those of non-traditional groups. However, greater emphasis was being given to the consolidation of organization in traditional areas. Meeting the demands of the traditional membership had priority and new organizing efforts became associated with this process. The review of the literature in Chapter 2 also identified the need for trade unions to represent their members in relation to non-work issues as well as those associated with the workplace. There were two respects in which a trend of this nature was evident. First, there were the representations made by unions on general socioeconomic issues such as unemployment, the welfare state, and the environment. Because these issues normally involved representation at governmental level, those respondents located in strong confederal structures (Italy and Spain) or in trade union movements with a historically strong central organization (Denmark and Germany) tended to emphasize this role more than UK respondents. In the UK, representations at governmental level tended to be more associated with workplacerelated issues, e.g. the need for legislation to improve union recognition or the need for a tax break for companies that invest in R&D. The second development in relation to non-work issues was in relation to individual services. The growth of individual services offered to members has been well documented. Among the most important areas mentioned were access to financial products, housing, taxation, and legal advice. As we have already commented, respondents tended to view this area with scepticism. It was seen as necessary as part of providing a ‘rounded’ package to members but was considered unimportant as a recruitment tool. One union, MSF, was consciously seeking to develop a counter culture to the emphasis on individual services. Supranational activity and organization It was only the national officials who tended to focus on supranational activity in any detail, although one would expect representatives at other levels to become more aware of trade union activity at this level as European Works Councils (EWCs) become more established (when the interviews were carried out, most EWCs were at a relatively early stage of development). Nonetheless, the limited awareness of enterprise-level representatives of this level of activity does coincide with one of the difficulties identified in Chapter 2. Although the national officials of individual trade unions and a few other respondents with experience of EWCs saw the importance of involvement at a European level, there was certainly no evidence of a trade union ‘project’ at this level, internalized and understood by union representatives as a whole. Given this limitation, union representatives did see as extremely positive the development of trade union cooperation across national frontiers and an increasing trade union role within the European Union. It was interesting to note the proEuropean stance adopted by UK respondents, given the traditional scepticism of the

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UK unions about European unity. Clearly the experience of the 1980s, when EU policies had been more supportive of the role of unions than those of the domestic government, had changed the attitude of UK trade unionists towards Europe. In fact, the only dissenting view on Europe was to be found amongst the Copenhagen-based branch of the metalworkers’ union which was a member of the Trade Union Movement Against the European Union and was worried that a European approach to the labour market, with the emphasis on regulation, would undermine the Danish voluntarist collective bargaining style. Chapter 2 considered three areas of supranational activity: the role of the European Trade Union Confederation (ETUC), the European Industry Committees and Trade Secretariats, and EWCs. In practice, only in respect of EWCs was there much response forthcoming. Not even the national officials interviewed mentioned the ETUC, implying the isolation of this organization from the day-to-day experience of trade unionists in EU member countries. Perhaps surprisingly, the invisibility of the trade union sectoral organization at a European level was almost as complete. One of the UK respondents who was the chair of the working party on electronics of the metalworkers’ federation indicated that this group had not met for two years. Although the Trade Secretariat was seen as having performed a useful function in helping to establish EWCs in the aftermath of the EU directive, it was not seen as an organization which got involved comfortably in industrial issues generally. Political representatives were used more, and seen as more effective, in applying pressure at a European level. Those respondents with experience of EWCs emphasized their value as a source of information which could subsequently be used in collective bargaining. However, the fact that they did not provide a forum for collective bargaining was seen as a major disadvantage. Most respondents saw little possibility of making progress towards collective bargaining at a European level directly via the mechanism of EWCs. IG Metall, for example, is examining the possibility of developing pattern bargaining by extending present avenues for information exchange and consultation between unions. In this context, it has begun to invite delegates from unions in other countries to be present (informally) at negotiations in Germany to deepen understanding and cooperation. Several respondents emphasized the difficulties which fledgling EWCs were facing. In some cases they were too employer driven with employee representatives lacking confidence. There were sometimes initial difficulties in reaching agreement on the distribution of union seats on the Councils between the countries involved. Often representatives concentrated only on their own national interests rather than taking a broader view. Often the relationship between the EWC and the national trade union structure lacked clarity (echoing the view of Weston and Martínez Lucio (1997), referred to in Chapter 2). The relationship between European-level and national-level relations with the employer were seen as important. If relations were well established at a national level, this boded well for the functioning of the EWC. Conversely, effective union-management relations at a European level could

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be used by union representatives as a basis from which to improve collaboration with the employer nationally. The other area of supranational activity which was given some emphasis by respondents was the use of political channels as a means of applying pressure at a European level. The UK unions all had formal relationships with specific Members of the European Parliament (MEPs). MSF sponsored twelve and the AEEU six MEPs. The unions organize regular meetings with the MEPs to keep them informed of relevant issues. This type of pattern was repeated in the other countries of the study. If the union representatives of an EWC faced a particular issue which they wished to influence at a European level, the lobbying of MEPs tended to be the main avenue used. In the case of the Alcatel EWC, for example, the involvement of MEPs was seen as important for progressing union interests in relation to the merger of Thomson and Alcatel and the development of a European policy for telecommunications. The Trade Secretariat, on the other hand, was seen as having other organizational priorities and was therefore not regarded as the appropriate mechanism for pursuing issues of this kind. In conclusion, the responses on supranational activity emphasize the limited development of consciousness of this area among union representatives in the electronics sector. As EWCs become more established, one would expect this situation to change. However, the extent to which this happens will be influenced by the degree to which EWCs develop to provide a stable and effective forum. It will also be influenced by the extent to which the European-level union organizations, the ETUC and the Trade Secretariat, are able to forge a stronger relationship with the national trade union movements which they represent. Conclusions As we have seen, union organization in the electronics sector poses considerable problems for most of our respondents. The high degree of globalization in the sector and the hegemony of new technology are reflected in employer strategies and patterns of employment, which raise important questions about the nature of the future trade union presence in the majority of the countries and subsectors in the study. Given this context, it is not surprising that most of the respondents displayed an awareness of the need for the unions to adopt new strategies, the only exception being Denmark. Danish respondents expressed a confidence in the continuity of their approach which was not encountered elsewhere. At a general level, the union responses showed a high degree of convergence around the approaches discussed in Chapter 2. Greater stress was placed upon a more collaborative approach to the employer relationship and an acceptance of the inevitability of decentralization in the collective bargaining process. Respondents pointed to a narrower bargaining agenda with a greater emphasis on job security and qualitative issues such as occupational training. A strong concern with membership issues of recruitment and organization was also evident, with agreement around the need for better communications with members, more effective recruitment, a

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sectoral focus, and an emphasis on union consolidation, merger, and unity. In respect of political and European involvement, the need for the unions to develop a stronger presence was recognized although, in the latter case, this awareness was more evident among national-level respondents. Notwithstanding this general level of convergence, there were important differences of approach, conditioned by the institutional and cultural context in which the unions were operating. The responses of the Danish, German, and Italian respondents tended to display a coherence and consistency which was not as evident in Spain and the UK. The greater self-confidence of respondents in the former countries was evident in their aspirations for co-management and in the way in which they viewed new management approaches to work organization as an opportunity rather than a threat. These features of responses in Denmark, Germany, and Italy owe much, it is suggested, to the stronger and more supportive institutional context (internal and external to the unions) in which respondents in those countries were operating. Within the unions a high degree of national coordination was balanced by relatively strong enterprise-level organization. Externally, multi-employer organization and involvement in collective bargaining was still secure, if under pressure. In neither Spain nor the UK was the union context so propitious. In the UK, the absence of multi-employer organization, and trade union division, created a more exposed situation, which, while emphasizing the need for new policies, made more difficult their development and implementation. In the case of Spain, the high proportion of small firms presented an obstacle both to union organization and to the development of a strong two-tier bargaining structure on the model of Denmark, Germany, or Italy. However, the higher degree of centralization and policy coordination in the Spanish unions did facilitate the development of a clear view at federal level of union priorities. These included the maintenance of corporatist relations with the new Popular Party government and the building of a strong multi-employer bargaining structure at national level, and some progress was being made in both these areas. Given their weakness at enterprise level, the Spanish unions were pursuing the only strategies available to them—increasing the ‘stickiness’ of the institutions outside the enterprise. It was not possible to identify a similar clarity of approach in the case of the UK unions. There was no clear evidence of aspirations to strengthen the institutional context external to the enterprise, and the likelihood of enterprise-level activity being able to compensate for this appeared limited, although unanimity did exist around the need for supportive legislation on trade union recognition. Notes 1 The electronics sector was defined in terms of the following SIC codes:

30 01 02 32 10

data processing and office machinery components

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32 30 33 20/1 32 20/1 32 20/2

consumer electronics electronic instruments telecommunications manufacture radio/electronic/defence.

2 CO-Industry came into existence when the metalworkers’ cartel widened its scope to cover manufacturing generally.

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5 Food manufacturing Roger Smith

Introduction The food manufacturing industry,1 while perhaps not so visible in economic terms as some other branches of manufacturing activity, is one of the most important in the European Union. In terms of value added, the industry ‘attains figures approximately equal to those of the transport and chemical industries, which in modern economies are expressions of the degree of development achieved’ (European Commission 1996:13–1). The industry generates around 5 per cent of EU turnover, nearly 4 per cent of total employment, and thus represents one of the major market forces in the EU. Despite this importance to the EU economy, and the dramatic changes which have taken place within it in recent years, the sector has been relatively invisible to academic enquiry, particularly in terms of its industrial relations patterns. Thus, in comparison with other sectors which we have studied, there is relatively little established research literature upon which to draw. Like many other industries, this sector has been undergoing profound change in recent years. General overcapacity in the sector, linked with low underlying growth trends, have sparked a spate of mergers and acquisitions, mostly from within the EU. New technological developments, introduced into an industry that has been traditionally labour intensive, have had profound effects on employment patterns. Moreover, growing concentration in the food retailing sector, now dominated by large supermarket chains in an extremely competitive market, has put additional pressures on food manufacturing profit margins, providing an added impetus to rationalization. These developments have produced severe problems for the trade unions. Traditionally there have been harmonious industrial relations with a history of paternalistic management and relatively high unionization. However, workforce reductions and the introduction of new working methods have led to rapid changes in the industry.

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The economic environment of the sector The global environment Globally, the EU ranks as the number one producer of manufactured foods, followed by the US. It currently also shows the strongest growth trends. Competition from Japan is low in EU markets, given traditional cultural differences in food consumption, while Japan itself has been relatively closed to EU products for the same reason. The major competitive threat to the EU comes from the US where, after a period of severe recession in the industry in the early 1990s, many of the large companies are looking to consolidate their position by establishing a stronger presence in Europe. In order to enter foreign markets, firms can either employ export or foreign investment strategies. Despite some evidence of recent changes in dietary habits leading to a greater willingness to consume ‘foreign food’, food markets remain, predominantly, relatively fragmented and culturally constrained, thus discouraging export strategies. Moreover, a reluctance to invest in new productive capacity in an industry with relatively low growth prospects in Europe, as well as the high cost of new product launches, have also discouraged the opening of new plant by foreign investors. Thus, most international activity in food manufacturing involves foreign direct investment by acquisition (takeover of existing domestic manufacturing), so that the pressures towards internationalization are the result of the activities of multinationals. Globally, international trade accounts for only 14 per cent of the total value of food manufacturing. However, this sum is only one-third of the value of food produced by foreign affiliates of food multinationals (Handy and Henderson 1994). Trade of manufactured foods is heavily concentrated. Nineteen countries, the vast majority industrialized, are responsible for 89 per cent of all imports. Exporters are slightly more diversified, with twenty-four countries supplying 80 per cent of all export shipments. In terms of major competitors to the EU, it is interesting to note that whilst Japan is the world’s leading importer of manufactured food, it hardly figures in terms of exports. The US, on the other hand, is the world’s third largest exporter of food, as well as the third largest importer. It also dominates the list of world food multinationals. The European context The food manufacturing industry is of major importance to the EU, both in terms of the value of production, and the employment that it provides. Unlike some of the other sectors which have been examined in the study, it is also of central significance to all five of the countries upon which we have concentrated. Growth rates in the EU food industry have been relatively slow for the past ten years, a situation which is forecast to continue (European Economic Research and Advisory Consortium (ERECO) 1994). This slow growth has been particularly

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evident in the case of the three largest producers, Germany, France, and the UK. Italy and Spain have also seen a slight fall in growth rates, but remain above the EU average, whilst Denmark shows no major change. Overall, consumer spending on food has tended to stabilize in recent years, in line with the relative stabilization of production growth. The rise in personal incomes in that period has not resulted in a commensurate increase in consumer spending on food. This is an illustration of Engels’ Law, first proposed in the 1850s, that the share of food in household expenditure decreases with increasing income (Bareham 1995). What this means is that the food manufacturing sector is relatively saturated, and that producers can only grow through new high value-added products or increasing market share. The result is a highly competitive sector with falling profit margins, which is constantly striving to cut down costs. Changing consumer preferences Within the pattern of low overall growth, there has been a startling increase in the range of products, even if the fifty or so main types of vegetable and animal products on which the food industry is based have changed little. These developments indicate changed consumer preferences, reflecting social and cultural change. They include: a reduction in the time spent on food preparation as a result of changing domestic patterns and more women working outside the home; a reduction in the significance of the main meal in favour of snacks and light meals; the individualization of family menus; heightened concern for nutrition and health; growing sensitivity to environmental and ethical issues, like animal welfare; and the interpenetration of national food consumption patterns within Europe, often as a result of increased travel and tourism (Bareham 1995). The outcome has been one of varied fortunes for particular subsectors or product ranges. Thus, traditional sectors have all seen a reduction in demand (milk, eggs, red meat, and bread consumption are all in long-term decline), while there is an increased demand for fresh vegetables, low-fat, convenience, and frozen foods. There is some internal differentiation within the EU in terms of this overall pattern. In South Europe demand is concentrated mostly on fresh products, while in the North there is more demand for convenience foods. Demand for organic and additive-free foods is strongest in Denmark and Germany. Trade As we have seen earlier, foreign trade makes up a relatively small proportion of activity in world food manufacturing, in comparison with manufacturing industry more generally. This holds true also for the countries of the EU, for whom exterior trade represents only 6 per cent of production (i.e. rather less than the world average of 14 per cent). While the balance of trade is favourable for the EU as a whole, the situation for the countries in our survey varies widely. Three countries, Germany, Italy, and the UK have a negative balance. However, Spain has a positive

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Table 5.1 Food manufacturing imports/exports, 1994 (m.ECUs)

Source: Eurostat 1996.

balance and, at the other end of the spectrum, Denmark has an export/import ratio of over 3:1 (see Table 5.1). Intra-EU trade is relatively strong, and in fact higher than with the rest of the world. This tendency is likely to be reinforced by the conclusions of the Uruguay round of the General Agreement on Tariffs and Trade (GATT), involving the reduction of export subsidies. It is predicted that, ‘the Community will have to lower its overall level of exports. This will result in a progressive drop in production levels, to avoid the accumulation of surpluses and strains on prices in the internal market’ (European Commission 1996:13–18). Moreover, Bareham (1995:37) concludes that, ‘The net effect of the GATT agreement should be to offer consumers a wider range of products from both the EU and world markets at lower prices.’ Competitive pressures within the EU are thus likely to increase even more in the future. Structure of the industry Food manufacturing throughout the EU is extremely fragmented, consisting for the most part of a very large number of firms producing a small product range, often for a localized market. This is particularly true where the product has a short shelf life, as in the bakery and cooked meat subsectors. Over 92 per cent of EU food manufacturing enterprises have a workforce of less than twenty; 6 per cent have a workforce of between twenty and ninety-nine; and just under 2 per cent have a workforce in excess of 100. However production value is very heavily concentrated, with the large companies accounting for a massive 67 per cent of turnover (European Commission 1996). ‘In Europe just fifteen companies control approximately one-third of the market share and 100 companies control approximately two thirds’ (USDAW 1998). Thus, while in industrial relations terms the unions are presented with a diverse and fragmented potential membership, the major players in economic terms are a relatively small number of conglomerate firms, often multinationals. As can be seen from Table 5.2, UK conglomerates dominate the European market. In fact, eleven of the top twenty European firms in terms of sales are based in the UK. This strong position can be seen reflected in the figures for takeovers. Merger and takeover activity in Europe has been more intense in food manufacturing than

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Table 5.2 Western Europe: leading food and drinks groups, 1996, food sales (m.US$)

Source: Seymour-Cooke Ltd 1997.

in any other industrial sector since the beginning of the 1990s, as a result of the build-up to the Single European Market. Of the 144 acquisitions that took place in the sector in 1993 and 1994, UK companies were responsible for 53 per cent of the 113 acquisitions that were made by EU companies (European Commission 1996). However, the next few years may well see German groups emerging to challenge that dominance. In terms of the pattern of foreign direct investment into the countries covered by our study, Spain and Italy receive most and the UK and Germany least. Denmark, though traditionally receiving little, has seen increased inward investment in recent years (OECD 1996). What this means is that the bigger players are beginning to consolidate their market power at a European level. Distribution While food manufacturing production in Europe is relatively fragmented in comparison with other sectors, distribution networks are heavily concentrated, and increasingly small producers are subcontracting for distributors. Essentially, this means producing own-branded goods for the major supermarket chains. The early 1990s recession produced extreme price competition between retailers, which resulted in a significant rise in the market share of supermarkets’ own-brand goods, which are sold at a lower price than branded goods. This has given the retail chains increased power vis-à-vis producers and enabled them to drive down manufacturing margins. It has left fewer funds available for new products or production methods and enhanced the competitive position of the larger manufacturers, which have greater resources for research and development, and for the launch of new brands and products. The power of the supermarkets is strongest in the UK, Germany, and Denmark. In Italy and Spain, food distribution has less developed networks, although this too is changing. The net effect in terms of industrial relations is to put severe pressure on labour costs.

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Table 5.3 Number of employees in the food, drink, and tobacco sector

Source: Eurostat 1996. Note: * These figures are distorted by the absorption of the East German food industry within the EU. Otherwise, the EU figures would show a steady downward trend over the ten-year period.

Employment Table 5.3 indicates the evolution of employment in the sector from 1985. Food manufacturing has traditionally been a labour-intensive industry. A dramatic restructuring process, replacing labour with capital-intensive production methods, has taken place in most EU countries since 1985. The unions have now, for the most part, accepted that there is extreme competition, overcapacity, and a need to mechanize some highly labour-intensive operations in order to stay competitive. The strategy of the large firms, especially multinationals, has been to concentrate on high value-added activity, moving away from the production of primary goods. This tends to provide economic justification for the high levels of investment in technology which are now necessary in sectors such as ice cream, biscuits, confectionery, and sauces. The effects of the resulting labour displacement have been severe, and many of the major multinationals in which there were very high levels of union membership and influence have experienced large staff reductions in recent years. Overall, the result has been a decline in employment levels, which has become steeper since 1992 and is projected to continue. While food manufacturing accounted for 2.6 per cent of total EU employment in 1991, it is expected to have fallen to 2.4 per cent by the end of 1997, reflecting a 7 per cent decrease in employment in the industry overall. The greatest fall in employment is expected in the UK, with a loss between 1991 and 1997 of 85,000 jobs, an average decline of 2. 7 per cent a year. The fall in Germany is also likely to be relatively high, mostly as a result of rationalizations in the eastern Länder, while in Spain and Italy it is likely to be rather lower than the EU average. Conclusions The context within which the EU food manufacturing industry has been operating in recent years has been one of extreme competition, mainly as a result of overcapacity and low utilization of plant in the 1980s, which was exposed by the

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arrival of the Single European Market. Low growth throughout the sector in the late 1980s and 1990s, growing price competition in food retailing, and the effects of the Uruguay round of GATT in making external exporting more difficult, have all conspired to force a major rationalization on the industry. The result has been a severe downward pressure on labour costs. The situation in the countries studied can be summarized as follows: This summary indicates that the UK and Germany have been in the most exposed competitive situation in recent years, with a combination of low growth, an adverse trading position, and strong pressure from retail distributors putting extreme pressure on profit margins and resulting in the heaviest declines in employment. Denmark has experienced stable growth, an increase in exports, and less pressure from retail distributors, and has thus suffered less employment loss, being in only a more moderately exposed position. Italy has experienced modest growth, an adverse

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balance of trade, but has suffered a low decline in employment. Spain has also experienced modest growth, but a positive balance of trade, and has suffered one of the lowest declines in labour force in the EU. These two latter countries, although they may in the future come under increasing pressure because of recent increases in FDI, seem to be in the least-exposed position. The management human resource agenda The priority for employers in the food manufacturing industry has been to reduce labour costs to compensate for the low margins resulting from the competitive pressures referred to in the previous section. The essentially low skill level common in food manufacturing has resulted in a labour utilization strategy which has concentrated on numerical rather than functional flexibility. This approach has been reinforced by the seasonality of much production, and some consumption, of food, which means that the demand for labour may fluctuate widely. Employers have thus been seeking greater flexibility in working time. The degree of success they have achieved has been strongly influenced by the degree of national regulation of hours of work, overtime, and the rights of employees with non-standard contracts. Flexibilization in the UK has taken the form both of extensions of shift work as well as annualized hours contracts. There has also been a rapid growth of agency workers in recent years. These developments have been facilitated by the low degree of labour market regulation. In Spain, which also in recent years has had relatively low regulation, one in three employees in the sector is employed on a temporary contract. Moreover, current labour law reform is promoting the flexibility of the working day, of which employers have been keen to take advantage. In the recent past, stability in the face of seasonally fluctuating demand for labour was provided through a type of contract, not common in other sectors, which was permanent but flexible. This contract offered security for the worker, because although one would only work certain months of the year, it was permanent. However, with labour law reform, the legal characteristics of the permanent but discontinuous contract have tended to be replaced by temporary and ill-defined part-time contracts. Attempts have been made to maintain the essence of the original contracts through collective bargaining, albeit without legal status. However, the unions can only achieve this in those companies where they have a high degree of local influence. The overall result has been an increase in the degree of casualization in the industry. In Germany, although there are the same pressures on employers to maximize labour utilization through greater flexibility, constraints on their freedom to do so are placed by the works councils, which have legal rights in relation to the regulation of working hours, overtime, and fixed-term contracts. There is great resistance by employees to employer demands for more flexible working time, including weekend working. However, in the face of severe economic pressures, this resistance is becoming more difficult to sustain. In Denmark, the strong coordination of bargaining has meant that controls have been possible over the process of

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flexibilization, although at the cost of achieving lower wage settlements than in other sectors during the last round of negotiations. The achievement of extensive numerical flexibility is helped by the existence of an extensive and easily obtainable system of welfare benefits. The individualization of payment systems has not been a priority in the food sector in the way that it has been in electronics, for instance. Although there is a growing tendency in all countries to have more flexibility in wage negotiations at a local level, rather than standard sector-wide rates, bonus systems are largely groupbased and linked to transparent productivity measures. The unions have been prepared to accept these developments, as they are a way of increasing wages in a low-pay sector. Individual performance-related pay (PRP) does exist for supervisory and technical staff in the UK and Spain, but it has not been ‘rolled down’ to apply to other grades of staff in the way that the unions had feared. The fact that individual PRP, or individual contracts, have not been major trends in the food industry is probably because the favoured management technique is team working, and PRP is seen to undermine the efficiency of this. Human resource management techniques generally are well developed in Germany, Denmark, and the UK, and there are signs that they are increasing in Italy. The industrial relations context Trade union organization and density The pattern of trade union membership in the food manufacturing industry reflects the differences in the national patterns of trade union structure which were discussed in Chapter 3. The situation for the five countries in our study is summarized in Table 5.4. In all countries except Germany, food manufacturing trade unionism is relatively fragmented, albeit in different ways. In Italy and Spain, the fragmentation is a product of longstanding political and ideological divisions within the labour movement, with the separate federations affiliated to the major union confederations. The federations organize all categories of workers in all subsectors. In Denmark, the union membership is more hierarchically divided, with a tendency for employees in different occupational categories to be separately represented. In the UK, the criteria for the distribution of membership among the main unions is less easy to define, with the different major manufacturing unions having extensive membership in food manufacturing, but on a relatively haphazard basis. Although there is evidence of the unions having differential influence in particular subsectors, this is due to historical accident rather than agreement or planning. Only in the baking subsector is there clear dominance by a sectoral union (BFAWU) specializing in bakery workers. The situation is further complicated by the existence of a union that represents only supervisory and technical grades (MSF).

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Table 5.4 Principal trade unions in the food manufacturing sector

There are signs that this pattern of fragmentation is being modified in several of the countries surveyed. In Denmark, traditionally a country with a union structure heavily based on crafts and skill divisions, the process of industrial change is progressively making it difficult to maintain boundaries between skills. The growth of functional flexibility, combined with the diminution of authority of the national trade union centre (LO) as pressure has been put on national bargaining structures, has resulted in the formation of union cartels. These are federations of unions within the same sector, established to coordinate collective bargaining more effectively. As a result of this development, the unions have begun to collaborate more readily and to cede power to the cartels. In the case of the food industry, the situation is rather complicated. The NNF leadership considered it preferable for the food workers to be part of the hotel, service, and transport cartel rather than the manufacturing cartel CO-Industry, as they thought that the former would do more to protect the pay of relatively low-skilled food workers. However, an attempt to form a food, drinks, and services cartel failed to win official backing from the LO, although the would-be cartel still operates as a coordinating forum for dealing with EU policies. In this respect the decentralization process in the Danish collective bargaining system is different from other countries because it has strengthened the coordinating role of the unions at sectoral level. In Spain, the food federations attached to the major confederations are working much more closely together since confederal links with the political parties became

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weaker. Some union leaders even talk about the eventual formation of one union. Resistance to this process comes mainly from some enterprise, and particularly middle-level, lay officials. This is partly because the activists still identify with the history of their own union and remember past conflicts. However, there are indications that this resistance to unity is gradually becoming weaker as the ideological component of trade unionism in Spain becomes less pronounced. Confederal restructuring, which has placed more emphasis on sectoral rather than territorial organization, has reinforced this process. One of the major confederations has recently taken the decision to merge the food sector with the agricultural workers in order to strengthen the sectoral approach. In Italy, also, the main federations, though traditionally with distinct political loyalties, have been increasingly collaborating in collective bargaining. In the UK, employment rationalization in the dominant large firms, where much of trade union membership is concentrated, has done little to lessen the competition that exists between unions operating in the sector. The two largest UK general unions (TGWU and GMB) are dominant in membership terms within the sector. With heavy membership losses in other sectors, both these powerful unions pursue an aggressive policy of recruitment. Food manufacturing plays only a relatively minor role within USDAW, which is primarily a shop-workers’ union. The only union with a clear food manufacturing focus is the bakers’ union, BFAWU. The pattern of union membership and collective bargaining representation is complex, and the result of historical accident and haphazard processes rather than a trade union or employer strategy. The result is that the major unions have overlapping and sometimes competing membership within the major companies, and it is difficult to predict which union will be operating in a particular plant. The pattern is usually one major union per plant, but commonly more than one union would be represented within a company. Nobody has an overall view of which union is in which plant and some unions do not, at national level, have an inclusive list of all their recognition agreements within the food sector. The result is a situation within which the major trade union players pursue essentially their own agenda. Union density rates vary considerably between the different countries in our study, largely in line with national differences in aggregate levels of union density. However, food manufacturing has traditionally had a slightly higher rate of union density than manufacturing as a whole. Rates vary widely between firms of different sizes. In large firms, unionization rates of 80 per cent or above are achieved in the five countries. However, unions in all countries except Denmark have had great difficulty in organizing in small firms, and, as we have seen previously, over 90 per cent of firms in the food manufacturing sector in the EU have fewer than twenty employees. A common response of unions in Italy, Germany, and the UK has been to concentrate on consolidating their membership in large firms. While this is understandable as a short-term tactic at a time of dwindling union resources, severe rationalization in the larger and more capital-intensive firms will make it more difficult to maintain membership levels in the longer term unless density improves in the smaller firms.

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Table 5.5 Union density in the food manufacturing sector

Source: Figures supplied by the unions, except in the UK, where the figures are taken from the 1998 Labour Force Survey. There may be some slight inflation in union-provided figures.

In theory, the process of company merger and acquisition within the sector could have facilitated the process of recruitment. However, as can be seen from Table 5.5, in three of the countries there has been a fall in union density of relatively dramatic proportions over the period 1995–97. In Germany, this tends to be put down to the problems arising from the incorporation of the eastern Länder. In Italy, the effects of restructuring are given as the main explanation. In general, the major job losses that have occurred in the larger firms, as a result of increasing competitive pressures and new technological developments, have been the common factor contributing to the fall in density. Unionization rates have held up in Denmark, probably as a result of the unions’ involvement in the administration of unemployment insurance. Only in Spain has there been much sign of success in increasing unionization rates. This may be partially explained by the appointment of officials to concentrate on the problems of small firms, with the expressed intention that they should lead a unionization drive in this sector. However, it is also important to point out that Spain has had a much lower base of unionization than the other countries, for reasons which have been discussed in Chapter 3. Although trade union density is an important indicator of union strength and influence, it is important to note that in Germany, Italy, and Spain the unions also put forward representatives for election to works councils, via which they can influence plant policy making and local bargaining. The pattern of election results shows the significance of these statutory bodies in providing an additional, important source of legitimization for the unions. In all cases, the proportion of votes cast for union delegates is far in excess of union density levels, and so, even where employees are not willing to become a paid-up member of a union, they remain strongly predisposed to vote for local union candidates to represent them in dealings with their employer. In Italy, in the works council elections in the food industry held in 1997, over 98 per cent of the delegates elected were representatives of the major food federations. In Germany, in recent years, between 80 and 90 per cent of elected works councillors, and 95 per cent of director-level representatives, have

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been members of the major food union. Similarly, in Spain, the two major confederations dominate the elections. One should, however, remember that these levels of electoral success most reflect the degree of union influence in larger and medium-sized firms. In all three countries small firms are less involved in elections. Given the significance of small firms in the food sector, this is an important qualification. Thus, the unions tend to be doubly disadvantaged in terms of their influence in small firms, which make up the vast majority of enterprises in the sector. They lack both membership and representative status. Collective bargaining coverage The collective bargaining structures of the different countries tend to vary widely, reflecting differences in preferred state policies, the variable strengths and approaches of trade unions, underlying political ideologies, and employer preferences. Despite this range of national collective bargaining structures, the food industry now tends to be a relatively decentralized sector in all countries, although multiemployer sectoral bargaining arrangements of some form are the norm, except in the UK. Even in Germany, a country with a historically strong pattern of relatively centralized bargaining, there are 2,100 agreements in the sector, and decentralized bargaining has existed for over twenty years. One finds national agreements (e.g. the sugar industry), regional sectoral agreements, and also decentralized agreements at company level. The latter are especially common in the eastern Länder. A recent development which has facilitated the decentralization process has been the introduction of ‘opening clauses’ into sectoral agreements. These were originally designed to help the absorption of companies in the East into sectoral bargaining structures, recognizing that the economic position of such firms might not be strong enough to enable the application of terms and conditions which were being introduced in the West. While union officials were extremely concerned about this development, they recognized that the alternative might be a more complete decentralization over which they had very little control. Thus, ‘opening clauses’ giving some flexibility of interpretation at local level were agreed to in the belief the unions could control their content and ensure that flexibility was limited. However, in the food industry, the current view of the national union is that these clauses are now so open (and not only confined to the East) that in fact the unions exercise very little control. Therefore, despite the fact that collective bargaining coverage is seen as extensive (around 90 per cent in the West and 80 per cent in the East), there is great variability in terms and conditions, and a considerable weakening of union control. In the UK, a strong process of decentralization has also been evident in the past ten years in the food industry, although it has happened somewhat later than in other manufacturing sectors. For many years there were national industry arrangements covering the medium- and smaller-sized firms. Industry-wide

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bargaining structures have waned in recent years, to the point where they are now almost irrelevant. Many of the larger companies had withdrawn from these arrangements in the early 1980s, substantially weakening their legitimacy. The Food Manufacturers’ Group Joint Industrial Council, for instance, covered 50,000 employees in the early 1980s, but currently covers only a tenth of that number. Joint Industrial Councils (JICs) in bakeries, meat produce, and flour milling have disappeared altogether in the past few years (IRS 567 1994). In most areas where JICs still operate, they tend only to apply to small firms. Most of the major companies negotiate separately, and within single-company bargaining structures the trend has also been towards decentralization, either to divisional or plant level. There are signs that even in companies where national bargaining still exists there is a desire to shift emphasis more towards a local level, in the belief that the negotiation of change can more easily take place there. This situation of extreme decentralization in the UK has been described by one commentator (Crouch 1991) as representing the ‘collapse of associational control’—meaning that any coordination of policy through employers’ associations, common in other countries with elements of decentralized bargaining, is now practically non-existent in the UK. Denmark has also witnessed decentralization, driven by the need for more flexibility. However, here, national-level bargaining, brokered by the national union centre, the LO, has given way to sectoral bargaining involving union cartels and this has resulted in a high degree of union coordination of the bargaining process, At present, bargaining takes place at both the sectoral level and the local/company level. Sectoral agreements, negotiated between the national unions and the employers’ organization, establish minimum conditions in respect of pay, working hours, pensions, and training. These can then be improved on by bargaining at local level. Where local companies are not organized in an employers’ federation, the unions negotiate directly at local level, using the sectoral agreement as a basis. Whilst this system is seen both to give some local flexibility to firms, and still enable strong central coordination by the unions, structural change in the food industry (resulting in much larger but fewer companies) is likely in the future to enhance the power of employers both in sectoral and local bargaining. In Spain, currently, the food sector has more than 400 collective agreements, of which only fifteen are national subsectoral agreements. This is not an advantageous situation for the trade unions, as it does not facilitate the establishment of minimum levels of conditions throughout the sector, and is also a severe drain on union resources. The unions have been attempting to increase the number of national subsectoral agreements (and have developed four additional ones since 1995) so that minimum terms can be established, which can then be improved upon by bargaining at a more local level. A model agreement, in union terms, is the one for the meat industry. This is a national subsectoral agreement which sets out the general terms of employment. Once these have been agreed for the subsector, bargaining at local level enables the unions to improve upon them via negotiations on bonus payments and other types of incentives. However, unlike in the case of opening clauses in Germany, no undercutting of agreed minimum conditions is

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permitted. Although this approach has worked well in the meat industry, the strategy has had only limited success elsewhere. The high degree of employer fragmentation in the food industry in Spain means that often the preconditions in terms of employer organization are absent. For example, in edible oil production there are seven employer federations at subsectoral level. This means that the unions have difficulty in identifying a legitimate body with whom to negotiate. Despite these difficulties, collective bargaining coverage officially is high, at around 80 per cent. In Italy, there is a national collective agreement for the food industry, negotiated every three years by the national representatives of the employers in the sector and the three major national unions. The agreement deals with minimum pay rates and major conditions of employment, but also attempts to establish a framework for union-management relations at local level. The last agreement was ratified in July 1995. It was the product of a drawn-out and difficult set of negotiations and a settlement was only reached within one hour of a strike threat being activated. Preparations for the next round of bargaining during the course of 1998 have been influenced by a union view that the terms of the 1995 agreement were too vague, and have made clear and consistent implementation difficult. In addition, there is a second level of bargaining, at enterprise level, dealing with adjustments to pay, job classification and design, and the organization of work. There are efforts to establish a strong framework of joint regulation at plant level. Enterprise-level bargaining is intended to permit the development of local flexibility in work organization in return for greater employee participation in decision making. It was established at the beginning of 1994 in food manufacturing, and so far about 50 per cent of firms have been involved. Most of them are large firms but there are a modest number of small and medium-sized firms as well. Enterprise-level bargaining covers about 130, 000 workers in the sector, and most of the agreements have been reached in the north of Italy. In the south there have only been a few dozen, mostly the local subsidiaries of large national or international firms. The unions recently developed a strategy to extend bargaining coverage into smaller firms in the south by pursuing regional agreements to cover them. The employers have opposed this development, although a law establishing a minimum salary has been passed which the unions believe will act as an incentive even for such firms to become involved in regional bargaining. Although there are differences in the arrangements of the various countries, which reflect national differences in collective bargaining approach, there is a drift downwards of the focus of collective bargaining. The resultant problems of the coordination of bargaining tend to have been handled best in the northern countries, with Spain and Italy still operating with more centralized unions and collective bargaining models. Unions in Germany have had almost thirty years’ experience of decentralized bargaining in the sector, and have coordinated it through the works councils. In Denmark, the emphasis has been on intensified shop-steward education, organized and led by full-time officials. In the UK, unions have encouraged meetings of shop stewards from different plants within the major

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companies (often called combine committees) to exchange information and plan joint tactics. Summary of the problems faced by trade unions in the food manufacturing sector The restructuring of the food industry in recent years, and continuing competitive pressures, have meant that the most severe problem for the unions has been job loss. In all countries there has been a decline in employment levels in the sector. Most unions accept that the process of restructuring is inevitable in order to ensure the survival of the national industries. Whilst dramatic attempts have been made to prevent overall job loss in this process, these have mostly been unsuccessful, and the most that unions have been able to achieve has been the negotiation of a humane approach to the management of the process of job reduction. In Germany and Italy, where attempts have been made to introduce shorter working hours to preserve employment, this has been made difficult by the fact that food manufacturing tends to be a low-paid industry, Thus, it would not be possible for employees to survive on shorter hours. The loss of employment has been accompanied by a decline in membership levels in Italy, Germany, and the UK. This has had a serious effect on union finances, which, combined with the decentralization of bargaining, has strained full-time official resources. In addition, the age structure in the food industry has become skewed towards older age groups as a result of the non-recruitment of younger workers. This has brought problems of an ageing membership and activist cadre. Moreover, the unions have been unable to improve recruitment in poorly organized sectors, particularly small firms and young workers. The situation has remained relatively protected only for the Danish unions, mainly because of their role within the unemployment insurance system. It is not surprising that the food unions in Spain, Italy, Germany, and the UK all face quite severe financial problems. In all countries except Spain (where unions receive subsidies from the state) subscriptions are the only source of income. Attempted solutions have focused on internal economies, the liquidation of property assets, and the use of reserves, rather than increasing subscription rates. In the UK and Spain, there is fear of further financial loss if subscriptions are raised because of the competition between unions. In other countries, the low-paid status of food workers makes the unions reluctant to increase subscriptions. The development of other sources of income (e.g. selling services to non-members) has been tried in Spain and the UK, but with marginal success.

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Trade union responses The employer relationship It was concluded in Chapter 2 that one of the responses of trade unions to the new conditions which they face in the 1990s should be the development of a more partnership-oriented relationship with employers, with an increased emphasis on the workplace as the main focus of industrial relations activity. We now consider the extent to which this has occurred in food manufacturing. In all countries, the nature of industrial relations in the food industry is traditionally cooperative and paternalistic in comparison with the industrial average. This may be related to the closeness of food manufacturing to agricultural production, a sector noted for strong paternalist traditions. In the UK, many of the larger firms have strong religious and ethical antecedents, and this has helped to set the tone for industrial relations more generally. In Denmark, the important role of cooperatives in food production has also encouraged social cooperation in industrial relations. This relatively stable pattern of industrial relations, together with the above-average density of union membership in the sector, has meant that change has tended to be handled humanely, with consultation and compensation. Unions in all countries have tried to protect their position by maintaining a nonconfrontational approach in their dealings with employers, showing a strong awareness of the problems faced in an extremely competitive sector. Given the unions’ difficulty in penetrating the small-firm sector, the larger firms have been easier to deal with and it is there that efforts have been made to consolidate membership and influence, with the result that membership levels of 90 per cent are not uncommon in large firms in the countries studied. The dramatic restructuring which has taken place since the late 1980s, involving takeovers and multinationalization, has itself assisted the development of more sophisticated consultation procedures and agreements to manage change. This process has been reinforced by the development of European Works Councils, which have had an important incidence in the sector. Although the development of an essentially non-antagonistic stance towards employers is common to the unions in all the countries studied, the extent to which a ‘partnership’ model has been developed varies, as does the major driving force behind such developments. Extensions of the role of unions in workplace consultation and decision-making bodies have been most noticeable in the more regulated countries of Italy, Germany, and Denmark, substantially underpinned by the strengthening of works council organization. In the less regulated environment of the UK, and the less mature industrial relations system of Spain, unions have found it more difficult to develop more substantial joint forums at enterprise level. In Italy, the unions have sought to develop ‘social plans’ with the larger firms. These have included demands for information and consultation to enable early action in the face of restructuring processes, and also for firms to take responsibility for both the economic and social costs of unemployment. The plans have typically included

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advanced warning about job loss, information about vacancies in other plants, relocation allowances, and career counselling for those eventually made redundant. An extension of the unions’ role was reinforced by the government decree of 23 January 1993, which formally recognized the unions as ‘interested’ partners, with employers and the state, in respect of macro-economic issues. Accordingly, the unions have achieved quite advanced agreements in the sector, widening the scope of consultation. However, the limitations of the approach were demonstrated at Barilla, a company in which a very advanced agreement existed, but where restructuring was handled by the management in a traditional, unilateral way. Despite this type of setback, the food unions in Italy claim that the decree has resulted in much greater acceptance by employers of the role which unions can play in jointly managing change. The process of decentralized bargaining has also helped the development of a more extensive role for the unions in the better-organized Italian firms. As was mentioned in an earlier section, enterprise-level, integrative bargaining was established in the food sector in early 1994 and now effectively covers about 50 per cent of firms. The recurrent themes of agreements have been the participation of the workers in decision making about job design, the organization of work, organizational restructuring, and the role of the works council (RSU) at plant level (and how this should be integrated with the local union role). In all agreements, the unions have sought to distinguish between the day-to-day implementation role of the works council and the more strategic/planning role of joint union-management committees on issues such as work organization, job grading, work schedules, and equal opportunities (although in practice the people are often the same). A good example of the role of decentralized bargaining in facilitating a more participatory model of union-management relations (and of modifying workers’ attitudes to a position more in tune with managerial priorities) is provided by Italacque (a small group within the Danone company) at its Boario plant. The company had decided to close the plant, but opted to give the employees an opportunity to become involved in discussions about restructuring. With union collaboration, the number of personnel was drastically reduced by the introduction of teamworking and functional flexibility. Work schedules were redesigned so that the plant operated on a three-shift system all the year round. In return, the union negotiated changes in job grading, with additional rewards for skills gained, which thus recognized the increased technical ability of the employees. This ensured the continuing viability of the plant, and, in the words of one national union official, ‘changed the workers’ perception of the plant’. Thus it is suggested that there are clear signs that advanced participatory models exist as a strategic aim for the Italian unions, underpinned by legislative changes, reinforcing the legitimacy of unions as social partners at national, sectoral, and local levels. The shift of much industrial relations activity to workplace level (supported in any case by the unions because of the opportunities it gave to extend and improve upon the results of sectoral bargaining) has coincided with this aim. The involvement by the unions in consultative processes at local level to discuss

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organizational structuring, job design, and broader issues of participation, are seen also as developments of areas in which the unions have had, historically, radical agendas. In Denmark, the emergence of a cooperative approach has also been encouraged by the high degree of legitimacy given to unions at a national level by the state. The foundations of the Danish model of industrial relations, based on the principles of what would now be called social partnership, were established a century ago, and have been progressively strengthened since then. Rather than depending on extensive state regulation and intervention, the model relies on the stability of negotiated agreements between unions and employers’ organizations. The unions, unlike many other food unions in Europe, face no major financial problems, and are able to fund well-staffed and professional research departments, and run extensive training courses for worker activists. The strategic nature of the food manufacturing industry within the Danish economy has been recognized by the government, which has taken a strong lead in developing policy for the sector. In this process, the unions, who are heavily involved in tripartite sectoral structures, are seen by government as progressive allies for the modernization of what is, in certain respects, a conservative and complacent industry. This has substantially increased their legitimacy and influence, and sharpened their strategic thinking. They have been active in identifying high valueadded products for development and have focused attention on the promotion of organic farming and campaigning for a system whereby the producers of highquality food can gain awards for the promotion of environmental protection and the provision of good working conditions. These awards are reflected in a symbol which companies can display on their products. In all this activity, the unions have been working in close cooperation with employers’ organizations. The bargaining system has, as we saw earlier, taken on a more sectoral form in recent years. Although the Danish food sector has undergone radical restructuring, as in the other countries in the survey, the unions responded to employer needs to achieve greater flexibility in working hours by negotiating significant improvements in social protection for employees in the national sectoral agreement of 1995. The agreement also covered a number of areas included in the Social Chapter. The decentralization of collective bargaining that has taken place in the sector in recent years, though not as dramatic as in some other countries, has also facilitated the transmission of a cooperative approach to plant level. Job loss has been nowhere near as great as in other countries in the sector, displaced labour having been absorbed by expanded capacity and new developments. The unions have accepted that it is impossible to fight against structural changes, and have cooperated in the process of adjustment. In return for this cooperation, the unions have then concentrated on involvement in workplace issues like health and safety and job design. They have worked closely with works councils which already had developed a strongly participatory style with management. The advance into new areas of joint decision making at plant level, through the process of decentralization, is seen as a positive way of involving union members more directly in the process of change.

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However, it is still seen as important to maintain a strongly coordinated and articulated bargaining structure. In Germany the supportive institutional context has encouraged a social partnership approach outside the enterprise. Within the enterprise, the system of works councils, with their extensive statutory powers for information, consultation, and, in large firms, joint decision making on some strategic issues, has reinforced this pattern of partnership. The decentralization of bargaining found, in larger companies, a strong infrastructure already in place, with the works councils playing an important role in the application of sectorally agreed terms and conditions. The unions have thus not been very concerned in principle about decentralization in such a situation. It is the small-firms’ sector, where works council organization is often missing, which causes the unions most concern and makes it important not to weaken multi-employer bargaining structures too much and to seek tight guidelines in sectoral agreements. The union (NGG) has concentrated recently on establishing works councils in unorganized areas, and has been successful in setting them up in the central bakeries of regional chains, where, despite being German owned, there has been no tradition of works councils. The intention now is to build on these successes to develop union membership. The works council-centred strategy is in part a recognition by the union of the unwillingness of employees, especially the young, to become involved in campaigns external to the plant. There is, on the other hand, a greater interest in taking an active part in the day-to-day, more tangible, plant-specific activities of works councils. This is the logic behind the NGG’s recruitment drive amongst works councillors, and the increased emphasis on providing specific training for them. In companies where works councils are well established, the NGG has achieved more than a 50 per cent level of representation among works councillors. In Spain and the UK, although the sector has the same history of relatively harmonious industrial relations, the unions have not been so sanguine about decentralization tendencies in collective bargaining. General industrial relations developments in both countries, and job loss in the large firms where union membership has historically been concentrated, have certainly resulted in the disappearance of oppositionalist models of trade unionism within the sector. However, in the UK, the low legitimacy of trade union organization generally, and the gradual disappearance of national JICs, along with all remnants of any tripartite consultative structure in the industry during the 1980s, have meant that any strong institutional base for the development of a national partnership approach for the industry was lacking. Though the industry was of considerable strategic importance within the economy, the laissez-faire political ideology dominant during the 1980s meant that there was no sector strategy, and no institutional base for developing one. At a more local level, opposition to restructuring in the early and mid-1980s was common, especially in the case of plant closure. Several of the larger food unions produced ‘alternative plans’, often with the assistance of management consultancy firms, in an attempt to challenge the economic logic of employers and make the case for the maintenance of employment. These campaigns were

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frequently strongly located within the community and backed by churches and other non-union organizations. Such efforts had little overall effect on company policy, and served only to improve the terms on which redundancy was negotiated. However, this approach was seen by employers as useful, in that the plans forced unions to acknowledge and address the internationally competitive situation the sector faced, and encouraged the development of a more company-specific view. To the extent that efforts to develop a social partnership model have been visible in the UK, this has been as the result of a strategic attempt by the TUC, in the pursuit of a ‘new realist’ agenda, to persuade employers to adopt a more conciliatory approach to the unions. A national legislative or institutional framework to underpin these efforts has been lacking, and, in any case, the response of employers’ organizations has been muted. Management’s approach to the construction of a closer dialogue with employees has been more strongly based on the development of human resource management (HRM) techniques, and not on the development of pluralist structures involving the trade unions. The view of union representatives in the food industry was that the sector has been subjected to a higher than average application of HRM techniques than manufacturing industry generally. The techniques that have been particularly well developed have been new communications strategies and teamworking. A number of reasons why the food industry has been such a test-bed for HRM have been suggested. First, the levels of investment which have been put into the industry to mechanize the more labourintensive processes have meant that there was a need to secure the commitment of the remaining workforce to more intensive working methods. Also, the food industry is not characterized by high levels of grade differentiation (unlike the engineering industry, for example)—the jobs tend to be similar. This, together with the fact that the process is a kind of flow production-line system, make innovations like team-working more likely to be effective. While unions in the UK generally have more experience of local bargaining than in other countries, food industry bargaining in particular has tended to be relatively centralized until recently, and where decentralization has taken place, it has tended to be at company level, and thus handled mainly by full-time officials. In the absence of multi-employer bargaining structures, union full-time officials have been much more nervous about decentralization to plant level. One senior respondent suggested that since the shift to plant bargaining had taken place, trade union ‘claims’ were rarely put forward in the smaller and medium-sized plants where the bargaining was carried out by shop stewards; the stewards simply responded to a management offer. Highly fragmented bargaining means that union research officers and full-time officials, who, in the larger unions, are mostly generic, dealing with various industries, are under too much pressure to give detailed assistance. The broader agenda of a ‘workplace focus’, involving a more participative relationship with management, has been mainly narrowly based on HRM initiatives in the UK food industry. Moreover, in the case studies of the food industry discussed by Scott (1994), the strengthening of managerial prerogative, rather than the development of a genuine partnership with unions, is portrayed as the common

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tendency. The unions in Germany and Denmark have a longer experience, via works councils, of dealing with issues of work organization and, with the Italian unions, they see a correspondence of the HRM agenda with their own longstanding union objectives of democratizing the workplace. However, in the UK, unions at national level and many activists, developed a quite negative view of HRM. This was probably because their knowledge of it was filtered through the experience of US unions, who had identified HRM as a soft form of union busting. Officials began to be aware of the strategic nature of HRM in the late 1980s, but this was quite often some time after developments had been introduced on the shop floor. Often, HRM had not been taken up with officials because the shop stewards had not realized at first that it was a union issue. In any case officials were for the most part relatively uninformed about the nature of HRM. Many regional officials were unhappy that they had not been given more information by research departments and national officials. All officials felt they had been wrongfooted by developments in HRM, and that, as a result, stewards had not been given the guidance on how to deal with it which they had needed. Though there were very serious concerns about the implications for shop-floor organization posed by HRM, it was eventually recognized that certain aspects of it were positively viewed by the workforce, and that it would be difficult and potentially counterproductive to adopt a policy of outright rejection and resistance. While initiating projects, usually at national level, to inform themselves more about the theory and practice of HRM, the policy adopted by the food unions was described by one national officer as one of ‘positive engagement’. This meant that shop stewards were encouraged to get involved in discussions with management about innovations, while the unions nationally engaged in a propaganda campaign to alert all officials and stewards to the downside of HRM. All the major food unions developed shop-steward training courses on HRM. Information for officials was also produced. Information packs have been produced for activists in the GMB, MSF, and USDAW, while organized discussions about the subject have taken place in the food sectoral conferences of the TGWU, USDAW, and GMB. The unions’ scepticism about a partnership approach based on HRM was to an extent vindicated in 1994 by the leaking of a report from Cadbury’s (previously seen as one of the most cooperative and union-friendly of food companies), which showed that the company was introducing HRM strategies with the express aim of marginalizing the unions. The unions were able to turn this into a major propaganda victory, via coverage in the national press, and generate a large amount of internal union publicity (as well as being a propaganda ‘gift’ to the unions, the incident showed how much more effective union communications now were, as they were able to publish information bulletins to the Cadbury workforce within hours of the leak (Observer 1994)). Employer attempts at local partnership building via HRM have also been undermined by the high degree of casualization being introduced into the industry. Some national employment agencies operating in areas of intensive food production have begun to specialize in the supply of agency labour to the industry. Whereas, to

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begin with, agency labour tended to be used only in peripheral operations, core production staff can now be supplied in some areas. In Manchester, widespread absence for a Sunday production shift in one large company resulted in the rapid deployment of agency staff. Production levels at only 80 per cent of normal were achieved. From the unions’ point of view, the growing use of this kind of casualized labour undermines collective bargaining arrangements and seriously threatens union power. However, it also renders hollow management claims that they wish to build a partnership with employees. Therefore, in the UK, whilst the unions have developed a gradually less oppositional stance, the putting into practice of a partnership approach has been more difficult than in the other countries we have discussed so far, because of the absence of the institutional support for multi-employer bargaining or works councils, and the existence of a management HRM strategy which, in its early phases, tended to bypass the unions rather than seek to develop new areas for union involvement. Unions have found it difficult to coordinate the decentralized bargaining system, in large part because organizing efforts have been directed to fighting employment loss. The negative role of HRM in the UK in respect of the development of a partnership approach is in interesting contrast to what has happened in Denmark, Germany, and Italy. There, HRM has been an adjunct to the development of partnership and the scene for the coincidence of management and union agendas. In Germany and Denmark, the longstanding institutional support for unions in the collective bargaining process, and the established role of the works councils in dealing with issues like work organization, have made the unions more relaxed and positive about adapting an HRM agenda to their own ends. Moreover, given their role in negotiating and discussing issues outside the enterprise with sectoral employers’ organizations, they also have become more familiar with strategic thinking about the sector. Issues about job design, the extension of workforce democracy, and training have appeared quickly on union agendas. In Denmark, which has a high proportion of women and unskilled workers in the sector, there has been a concern to ensure that the benefits of HRM do not apply only to a ‘core’ workforce. The development of new working methods has generally been a subject of cooperation, provided it is linked to training and an improvement in the quality of jobs. In Germany, the introduction of new technology and working methods has generally been welcomed, unlike in the 1960s and 1970s, and the joint monitoring of all such new initiatives has been developed by the works councils. Special training has been developed for works council delegates to enable them to carry this out. In Spain, whilst paternalist relations have existed in the industry, and in more recent years it has had a below-average record of industrial militancy, this reflects the culture of the nature of employment in the industry, rather than the culture of organized industrial relations. Spain, as discussed in Chapter 3, has a less mature system of industrial relations, and a younger free trade union movement. The recent pattern of industrial relations within the food industry reflects this and can be associated with distinct phases of trade union development. It has also been

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influenced by rapid political change, and the recent dramatic restructuring of the sector after Spain’s accession to the EU. In the mid-1970s, after the emergence of free trade unions, the food unions of both the confederations were highly militant. This, in part, reflected a competition between the unions for members. Also, the sector was low paid and had worse conditions than many other industrial sectors. From the early 1980s, encouraged by a Socialist government, the unions began to focus on the development of a more sophisticated collective bargaining role, which needed the development of stable relations with employers. Union recognition in the food industry increased with this less oppositionalist stance. However, the framework of collective bargaining which developed was still relatively weak, and, with the economic difficulties of the 1990s and labour market reforms (which had considerable implications for an industry in which casualization was already high), the unions have been forced into a defensive and more suspicious stance. Stable relations at a workplace level have been difficult to develop for a number of reasons. First, in the early years of the post-Franco period, there was considerable inter-union rivalry, reflecting deep political differences amongst union activists. This was not conducive to the development of a joint approach to management. Whilst there has been much closer cooperation between the federations at national level during the course of the 1990s, rivalry and antagonism still exist between activists of the two unions and between officials at regional level. Second, the lack of experience of negotiation at a workplace level meant that the unions could not operate on an equal footing with employers. Third, although there is a degree of multiemployer sectoral bargaining, collective bargaining in the sector overall is relatively fragmented. There has been limited success in negotiating national subsectoral agreements to provide a secure basis for coordinated bargaining. Finally, the food unions have had to contend with the growth of individual negotiation in some companies in the sector. This is common amongst the larger companies, especially the multinationals (Nestlé, Starlux), and has not only embraced management, but also supervisory, technical, and administrative staff. The main problem that the unions have to overcome is that this kind of individual agreement is usually linked to a substantial wage increase. It has led to membership loss and also presents a threat to the process of collective bargaining itself. The development of a collaborative approach in Spain thus means a shift from explicit ideologically based oppositionalism to a strategy aimed at the establishment of stable collective bargaining relationships. There is little expectation of more extensive consultative arrangements with management or of sophisticated models of co-partnership and strategic collaboration. Strike rates and other forms of industrial action within the industry have tended to be below the manufacturing average in all the countries studied. Industrial action tends to be even rarer now than in the past, though there have been successful strikes in Germany and Denmark against flexible working time. Interestingly, in those two countries, national union officials seemed quite enthusiastic about the prospect of their memberships exhibiting higher levels of militancy than has traditionally been the case. In the UK, the legal requirement for pre-strike ballots has

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been used as a tactic to put pressure on employers, as the unions have won the vast majority of these ballots. For the most part, however, even in the case of unions that have in the past been more antagonistic in their approach to employers, such as in Italy and Spain, there is a great reluctance to engage in strike activity. In most countries, industrial action short of a strike, and campaigning strongly to get the union’s position across in the media and local community, have become the preferred options. The bargaining agenda The literature reviewed in Chapter 2 suggested that the unions should shift the focus of their bargaining agenda from quantitative elements (wages and conditions of employment) to more qualitative issues such as the quality of working life, human resource development, and equal opportunities. This shift in part reflects the greater difficulty which unions have had in a deteriorating economic climate in achieving significant improvements in the economic conditions of employment. However, it also reflects changes in the workforce, with an increase in female employment particularly affecting the bargaining priorities of the unions. In addition, changes in the nature of work, with rapid economic and technological shifts rendering many jobs and skills obsolete within a relatively short period of time, have made the maintenance of the employability of workers gradually more significant as a trade union objective. The food unions in all the countries except Denmark reported that there had been a narrowing of the collective bargaining agenda in the past ten years. Whereas in the mid-1980s, it was common for unions to have a broad shopping list of bargaining aims, the failure to achieve many of these during a period of rapid restructuring led to a focus on a narrower range of objectives. Now pay is prioritized, as well as one or two other items where a high degree of success is possible. This avoids the widespread perception of failure when a significant number of secondary issues are rejected. In the UK, equal opportunities and bereavement leave have been the subject of some gains, the former because national and European law found the existing policies to be deficient in a sector which has a higher than average female workforce, many of whom are part time. In Germany, the union has been a leading advocate of sound environmental policies and its model agreement for environmentally conscious production was given a prize by the EU. However, in other respects its bargaining agenda has focused on the traditional areas of wage and conditions. In Spain, the bargaining agenda widened dramatically in the 1980s, after an initial period during which basic gains in wages and trade union rights were established. The new phase gave great importance to issues related to the working environment, for example. In the 1990s, however, as the economic situation worsened and labour legislation gave less protection, the focus has once again become restricted to ‘bread-and-butter’ issues and the protection and consolidation of past trade union gains. In Italy, demands for the development of flatter and more participatory organizational structures have recently been advanced. However, while

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the three-year national agreement signed in 1995 established the right to receive information and take part in joint committees at company level, it has proved difficult to introduce more participatory structures in practice. A major feature of the unions’ bargaining agenda in recent years has been an emphasis upon job protection. We have seen that economic and technological change has resulted in employment decline in all the countries covered in our survey, and although there were some early attempts to mount campaigns against closures and workforce reductions, the unions have for the most part accepted that the restructuring is necessary and that this means that job losses and changed working practices are inevitable. Union strategy has thus been concentrated on the negotiation of humane measures to manage the process of job reduction. Food manufacturing tends to be a low-paid industry, and therefore proposals about shorter working hours to protect employment levels are not realistic. Even in Germany, where shorter working hours are still officially on the agenda of the food union, it is a much more difficult proposition than in engineering, for instance, and there are few expectations of making progress in this area in the short term. In the UK, there is an ‘overtime culture’ which makes even the short-term threat of an overtime ban difficult to propose (although it is very effective where it does take place). The alternative tactic of accepting wage cuts in return for avoiding redundancy has been pursued in one or two instances, but is regarded as very risky. It brings no guarantee of long-term success, and may lead to lower redundancy payments in the event of job loss merely being deferred. In Italy, the only country where an agreement for shorter working time had been reached, this was for a reduction of only eight hours per year. The union priority has been to ensure that redundancies are handled humanely, with as much compensation as possible. In Germany and the UK, there has been an emphasis on early retirement, with the result that the age profile of the workforce is skewed towards workers in their thirties and forties. In the larger companies, high levels of redundancy compensation and favourable early retirement terms have been achieved and this has tended to undermine any attempts to fight job loss. In Italy, the unions have sought to conclude ‘social plans’ with the larger firms, as discussed above, involving advanced warning of job loss, information about vacancies in other plants, relocation allowances, and career counselling for those eventually made redundant. One of the biggest problems the unions have to deal with in the sector is the gap between the north and south of Italy. Consequently, they have pressed for an agreement with the major Italian food companies (Ferrero, Parmalat, Barilla) which would result in new industrial investment for the south. In Denmark the recent employment decline in some subsectors has been facilitated by the availability of high unemployment benefit, administered by the unions and paying up to 90 per cent of previous earnings. There have also been other arrangements such as sabbaticals and retraining, as a result of which many of those made redundant have been re-employed in new developments within the sector. The importance given to training by the unions comes closest to being a longerterm strategy to contain job loss and protect the future employability of members. It

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has been identified by all the national unions as a priority. For example, the Spanish unions have fully recognized the problem posed for them by the fact that while the development of new technology is necessary for the future of the sector, its impact includes the loss of jobs, and an increase in the skill content of many of the jobs which remain. To retain credibility and a strategic role, it has thus been necessary for them to seek to become centrally involved in the modernization process and push for skills enhancement for employees. While they have been assisted in this by legislation promoting union involvement in training plans and delivery, their intervention has only really been effective in the large plants. However, while training is clearly identified as a strategic issue among trade union leaderships and there is evidence of their involvement at EU level in discussions about improvements in this area, demands for training agreements are only rarely in evidence at shop-floor level in any of the countries surveyed. Given the rapid technological and work-practice changes taking place in the sector, which require a more highly trained workforce, the significance of this approach is likely to increase in the years to come. Denmark is the only country where there has been a clear widening of the traditional bargaining agenda. The developments in mechanization which have taken place have forced employers to seek cooperation in increasing flexibility from the unions, and the unions have taken advantage of this. New issues have appeared on the bargaining agenda in areas such as improved working conditions, health and safety at work, pensions, training, maternity leave, and other welfare-related issues. A new system of paid absence for education, child care, or sabbatical leave, was introduced in 1993. The Social Chapter of the Treaty of Maastricht has also been used to increase the scope of bargaining. The latest collective agreement of 1995 (which will run for three years instead of the usual two) included elements related to the aims of the Chapter, in return for progress being made on the employers’ objective of greater flexibility in working hours. The unions have had to respond to the employers’ quest for flexibility on a wide front. As we have already discussed, in respect of pay this has not tended to involve individual performance-related pay, but group-based productivity schemes. These have been popular in all countries, and seen by the unions as a way of achieving additional pay, on top of collectively bargained pay scales. The union approach has been to protect strenuously collectively bargained scales, and jointly agree criteria for bonuses. Employers have also been seeking greater flexibility in working time. Partly, this is an extension of existing flexibilities in an industry which has always had strongly seasonal fluctuations in the demand for labour, for example in fruit and vegetable processing, and ice-cream production. However, there are additional pressures which have more recently come into play. The most important is the demand for ‘just-in-time’ delivery to the supermarket chains, who have passed back the problem of stock storage to producers. Producers have responded to this by attempting to develop just-in-time production systems, with obvious consequences for their

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workforces. Also, the introduction of expensive new plants into some operations has meant that more intensive use is needed to justify the investment costs. The main impact in the UK has been the extension of shift work and the development of annualized hours contracts. Unions have responded by attempting to achieve the removal of temporary contracts and stem the drift towards part-time working, in exchange for more flexibility. This has met with some success in the larger firms, where management have been looking for dramatic productivity gains from relatively unskilled teams. In Spain, the unions have pushed for discontinuous (seasonally affected) contracts to be made permanent. They have sought to establish joint control of the process of flexibilization and the negotiation of financial compensation, rather than trying to resist the trend. In the larger firms, ‘single status’ has been agreed and production workers have been put on a stable monthly salary, with the same benefits as white collar staff. The Italian unions have had some success in obtaining a reduction in working time and in the incidence of overtime, in return for the introduction of more flexible work patterns. In Germany, we find the greatest resistance to demands by employers for more flexible working time, including weekend working. The NGG has attempted to ensure that such arrangements are only introduced with the consent of the affected individuals, but there is an acceptance that this is becoming more difficult to achieve. Two major employers in Denmark have been forced to concede improvements in maternity, paternity, and sick-leave allowances, and in pensions provision, in exchange for more flexible working hours. However, it has been seen as more important to resist time flexibility, and this was done successfully in recent negotiations but at the cost of getting lower wage increases than in other sectors where flexibility was conceded. The shift to a more ‘qualitative’ agenda is thus not a coherent strategy which runs through the union agenda and is operative at all levels. In many respects features of the sector make this shift quite difficult to achieve. The sector overall is characterized by low pay and worse-than-average conditions for manufacturing industry. Trade-offs of financial rewards for gains which would improve the quality of working life are thus limited when memberships are struggling to maintain their standard of living. Where issues of flexibility have arisen, union responses have been largely reactive to employer demands, and the gains that they have made on behalf of members have been largely symbolic. Only in Denmark have significant concessions been gained. And only here, and in Germany, have the unions had a clear agenda for qualitative improvements in job design and the working environment. Political involvement The third issue of union development discussed in Chapter 2 was the need for a workplace focus and modified bargaining agenda to be combined with a broader political strategy, and the building of broad political alliances to ensure the legitimacy of the unions on a stable basis, and help develop a supportive framework of institutional support for collective bargaining, as well as facilitating the pursuit of

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social and economic aims. This is an acknowledgement of Bean’s (1994) conclusion that the most significant variable affecting union power has proven to be government support. In all countries, food manufacturing unions have traditionally had strong political ties with parties of the left. At an institutional level, this has been most formalized in the UK, where all the food unions have a history of deep involvement with the Labour Party. The restructuring of this relationship in recent years can be seen as a paradigm for the redevelopment of political links in other countries. The history of left-right splits within the party, with unions lining up on different sides, can be seen to have had serious negative consequences for inter-union cooperation in the past. Recent internal party reforms, reducing the power of the unions within the constitution, as well as the process of cultural modernization that the party has initiated, have tended to focus the attention of the unions more on industrial activity. That is not to say that the unions have become uninterested in politics. The food unions have fought two expensive campaigns in the last twelve years to retain their ability to give political donations to the party. They have done this successfully and with enthusiasm, but in the knowledge that this would buy them no special favours from a Labour government. Before the general election of May 1997, unions tried to improve their use of sponsored MPs. However, since the election, the process of ongoing party reform has now removed the system of direct sponsorship, which makes lobbying on behalf of sectoral interests more difficult to achieve. The response of the food unions has been to concentrate on pressing for legislative reform to strengthen their position. Because of the great difficulty which they have had in gaining recognition in small firms, the unions have been keen promoters of new legislation on trade union recognition rights. Similarly, given the low-paid nature of much of the sector, they have also been prominent in campaigning for a national minimum wage. In Denmark and Germany, the food unions have also traditionally had close relations with the social democratic parties, but these have become more distant in recent years. In both these countries, moves to loosen the links have mainly come from the parties themselves. While the officials and activists of the NNF in Denmark overwhelmingly support the social democrats, poll evidence suggests that rather less than half of their members do so. Although strong informal links still exist between the union leadership and the party, there has been a widening of contacts to other parties and efforts to institutionalize the presence of unions in state organizations. In Germany, the NGG is attempting to improve contacts with all democratic parties to compensate for the weakening of links with the SPD. There is still a certain coordination of the policy of the union with those of the party, but this is now done more critically from the union’s point of view. Members of state parliaments or of important government committees, who directly lobby for the NGG, now hardly exist. Given union concerns about ecologically sound production and the promotion of a healthier diet, the strategy of broader political contact has

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led to far closer contacts with Bundnis 90 (the Greens) than existed ten years ago. However, it has been difficult to develop relationships with the governing coalition at federal level. The union has tended to concentrate on developing good regional relationships with political parties. Nevertheless, the NGG has been unable to influence regional economic structural policy in the way that has been possible in other industries. The union’s view is that the fragmented structure of employment in the sector has led regional governments to underestimate its importance for employment levels. Even in North Rhine-Westphalia, where the NGG has forged a strong relationship with the SPD and where food manufacturing is the third largest sector in terms of sales and employment, the union has been unable to gain membership of the ‘round table’ regional consultative body for economic development. In Spain and Italy, the loosening of traditional ties between the union federations and political parties of the left has removed an important source of inter-union conflict. There has been a far higher degree of union cooperation, as the unions have become more distanced from party-political infighting. In Spain, the links were extremely close during the transition to democracy from the mid-1970s, but this changed significantly from the mid-1980s. Senior union officials saw that the close links, as a result of which the unions were often seen as subordinate to political interests, were inhibiting the independent growth of the unions. The consequent loosening of ties has produced a greater ideological pluralism within the union federations, and enabled them to concentrate on trade union rather than political problems. This process has not been totally smooth, however, with local union activists tending to be more in favour of the preservation of the links. In Italy, formal relations with political parties, or with individual MPs, are forbidden by law. However, informal links are not prohibited and were extremely important until at least 1992. The political scandals which affected Italy in the early 1990s, and the party realignments and restructurings which have taken place since then have weakened the unions’ traditional allegiances. The unions saw that the damaging scandals which did much to harm the credibility of the Socialist and Christian Democrat Parties might also affect their own credibility and so they detached themselves from the parties and engaged in a process of greater mutual cooperation, with an emphasis on industrial activities. These developments should not be taken to imply that the Spanish and Italian unions have lost interest in the political process. On the contrary, both have engaged in a consistent political strategy of enhancing their status and influence in state institutions. There is thus a strong convergence in the pattern of relations between the political parties and the food unions. Links between the unions in this traditional manufacturing sector and the parties of the left have been strong in the past, even if the unions have been a less powerful force within those political partnerships than unions representing heavy industry. The distancing of relationships which has taken place in recent years in all countries has led to a more pragmatic and calculative approach to political contacts on the part of the unions, and a willingness to campaign with parties of various ideological orientations to achieve gains.

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Relations with the membership As noted previously, unions in the food sector have been able historically to achieve higher than average recruitment and retention rates. However, in recent years, job loss and the lower propensity of the young and employees on non-traditional contracts to join unions, has meant that the unions have had to place an emphasis on making themselves more attractive to would-be members and more responsive to the needs of existing members. Recruitment has thus become a key area of activity for the unions. However, as recent declines in membership figures show, no simple solution to the problem has been found. There is widespread concern in Italy, Spain, Germany, and the UK that the ideological commitment to trade unionism in this traditionally wellorganized sector is declining, making it much more difficult to recruit new members. The focus in most countries has been on consolidating membership in the large plants and in companies with whom good relations exist, a strategy which has been reasonably successful. The difficulty of recruitment in small firms has not been solved. The Spanish unions have appointed specialists in the problems of small firms to make the unions appear more relevant to employees and to give assistance to local activists. However, recruitment is a difficult and complex task in the smallfirm sector which requires enormous resources, which are often lacking. The unions accept there will be few short-term gains in this area, and it is seen as a longterm investment. Recently, in Germany, the NGG has attempted to build a base for trade unionism in small firms through encouraging the formation of works councils. While this has resulted in some gains, it is again a long-term strategy. Other countries have developed no special approaches to recruitment in this area, though it is widely acknowledged to be of great importance. Most unions have developed individual services of various kinds to make themselves more attractive to a workforce which is seen as instrumental rather than ideological in its commitment to trade unionism. There is indifference or outright hostility from many regional officials and activists to financial and other commercial services, which are for the most part initiated at national level. However, there is widespread recognition that, in comparison with other membership organizations, unions have been in the past very poor at providing their membership with individual advice, information, and services. A more professional approach to recruitment and retention in terms of the provision of information leaflets has been particularly apparent in Italy and the UK. The UK has the most elaborate set of services for members, from acting as an agent for discounted holidays, mortgages, and insurance, to providing handbooks on job-search skills, and producing handbooks on discounts on consumer goods which the union has negotiated with businesses. The service which has been seen to be most successful and most marketable to potential members has been the provision of legal helplines, telephone services through which members can get legal advice on work, personal, and consumer issues. Only in Denmark, where high union density

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levels have been maintained, is there little evidence of the development of a wide offer of individual services. The widespread scepticism among officials in all countries about such individual services is in part based on the view that in a relatively low-paid sector, basic improvements in pay and conditions are so important that additional fringe benefits are likely to have little impact in attracting new members. At most it is acknowledged that they can play a role in retaining members. None of the food unions in any country had shown any moves towards a strategic restructuring to make themselves more open to membership participation. This is particularly significant, given the strong tendencies to decentralization which have been noted throughout the sector. In Denmark and Germany, the response to decentralization was to give more responsibility to works councils, and certainly additional training had been provided in order to help works councillors in this process. However, neither union had significantly decentralized its structures to reinforce this development. In the UK, a common complaint of regional officials and lay activists was that union resources, particularly research resources, remained concentrated at national level. This resulted in considerable difficulties in a situation of extremely fragmented bargaining. In Spain and Italy, the need to provide strong central leadership during a period of alliance building between previously ideologically opposed confederations acted to reinforce top-down union structures, despite, ironically, the concentration in Italy upon developing more participatory organizational structures within enterprises. What has been apparent in the area of membership organization is a stronger emphasis on sectoral organization in several countries. In Germany, the industrial union structure has ensured that a sectoral focus has always been strong. However, the location of food workers within more general groupings of industrial workers in other countries (e.g. general unions in the UK and territorial structures in Spain) tended previously to reduce the focus on sectoral organization. In the UK, the general unions that contain food workers all now have a food workers’ internal body, which meets regularly for discussion and policy making. There is also a stronger identification of regional officials with the specific sector (as regional industrial officers), rather than with a more generic role. In Spain, it has become confederal policy to strengthen the federal sectoral structure at the expense of the provincial or regional territorial organization. A strengthening of the sectoral focus in Denmark via cartel formation has been a result of the decentralization of bargaining. The increased focus on sectoral organization, which tends to result in a stronger concern with industrial rather than political issues, fits with another general tendency noted earlier, the distancing of the relationship between the unions and parties of the political left with which they have had historically close links. It thus helps to remove some of the inter-union barriers to collaboration on industrial issues.

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Supranational activity and organization The Europeanization of the food industry from the late 1980s, and the increased significance of multinational activity in the sector, has resulted in a radical shift of focus by national unions towards prioritizing participation in European institutions. In the UK, the switch to positive engagement by the trade unions in European institutions occurred dramatically at the end of the 1980s, when opposition to Europe was abandoned by the TUC. The manner in which different national unions attempt to influence European policy and the organizations which they attempt to influence vary, however. In Denmark and Germany, the unions are much more embedded in national systems of policy making for the food sector and have been active in directly lobbying EU organizations on issues ranging from the reform of the Common Agricultural Policy to genetic engineering. Food unions in both these countries have seen the role of the EU in promoting economic integration in the industry very positively, because it has opened up markets for producers throughout the continent. In this process, the unions have been in partnership with employers’ federations and government organizations, and have thus been seen to have a high degree of legitimacy and representativeness. While food unions in the other countries also lobby EU bodies directly, they do this for the most part through the international food trade union organization. Collaboration within the European Committee of Food, Catering, and Allied Workers’ Unions in the International Union of Foodworkers, is now seen of fundamental importance whereas only a few years ago it was viewed as marginal to the interests of national unions and mainly a support system for unions in developing countries. The Danish unions, in addition, are involved in the Nordic confederation of food unions, and the NNF is dominant in this organization. The Social Charter gave an initial impetus to the internationalization of union activity. The Danish food unions for example have put much emphasis on importing issues from the Social Charter into collective bargaining agreements. However, the most important development in the internationalization of union responses in the European food industry has been the establishment of European Works Councils (EWCs). The food sector, given the dominance and scale of multinationalization within it, has been the most affected of all the industrial sectors, and a considerable amount of organizational resources have been put into the development of EWCs by the unions in all the countries studied. In the case of the majority of our respondents, EWCs were the only aspect of international activity and involvement which was mentioned in interviews. National trade union officials were frequently spending the majority of their time in the establishment and running of EWCs. Though there was general optimism at national level about the role EWCs could play at the time they were being established, such euphoria has now been tempered. Unions in the more established industrial relations systems of Germany and Denmark tend to be the most sceptical. The German union expressed the strongest

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disappointment, not least because the rights afforded to the EWCs fall far short of those given to works councils under German law. Moreover, they felt that employers will determine the scope and the speed with which EWCs will develop, with unions playing little part in the process. They are also concerned about the opposition of some very high-profile employers, notably Unilever, to the establishment of effective councils. In Denmark, the NNF has participated fully in the process of forming EWCs, in recognition of the growing role which foreign multinationals are likely to play in the future. However, the union remains concerned that this development may strengthen enterprise bargaining, to the detriment of attempts by the union to maintain a strong sectoral bargaining framework. In Italy, the establishment of EWCs in the major companies was achieved at a relatively early stage, and the unions have concentrated on attempting to develop these essentially consultative bodies into a bargaining role, albeit with little success as yet. In the UK, the formation of EWCs has recently dominated the agenda of the food unions, and, in particular, the food sectoral conferences. National officers’ work has for several years concentrated on this issue, despite the fact that in practice EWCs directly affect only a minority of members. Middleranking officials and lay activists tend to view this development rather cynically as an attempt by national officials to preserve a role for themselves within a bargaining system which is heavily localized. In Spain, the unions have only more recently become active in the area, and are trying to raise expertise and confidence levels amongst activists through training activity. In general, we have seen that the development of an international focus to trade union activity in the food industry is subject to considerably more priority at national than at regional or workplace levels. Many middle-ranking officials, beset with more routine problems and a shortage of resources, do not tend to see international activity as a priority. Only those who are themselves involved in EWC activity believe that the resources used are justified, and there is a tendency to be dismissive of EWCs as talking shops which have little relevance for the bulk of the membership. In addition, the activities of the international trade union organizations are completely invisible to the vast majority of lay activists, and to many of the officials. Conclusions The five countries which we have studied demonstrate a significant degree of convergence in respect of the economic situation of the food industry. Low growth rates, excess production capacity, new food consumption patterns, rapid advances in technology, the domination of production by multinationals, and the increasing power of distribution chains, form a common context. In addition, the problems which the trade unions face are very similar, specifically the reduction and rationalization of workforces, numerical and functional flexibility, the decentralization of collective bargaining, the reduction of union membership and income, and the impact of new methods of human resource management.

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We have noted a similarity in union responses during a difficult period for the unions, when they have been trying to manage the process of adaption to economic change, the loss of membership, and major changes in working conditions. The fragmented and often localized nature of production and the paternalist attitudes of employers have tended to result in a union approach which generally involves collaboration with employers, particularly in the large firms where much of the membership is concentrated. Militancy is very rare in the sector. Unions in all countries have accepted the inevitability of the decentralization of collective bargaining in a sector which is undergoing rapid technological and organizational change. However, there are differences in response to this process of decentralization, related to the maturity of the unions, the strength of the works council system, as well as the capacity of unions to preserve a framework of sectoral bargaining. In Germany, Denmark, and to some degree Italy, decentralization is seen as an opportunity to involve local activists more fully in the bargaining process, and to ensure that local economic conditions can be exploited. In Spain, however, unions are concerned that localized bargaining will undermine efforts to build strong sectoral bargaining structures and extend agreements to workplaces which are not organized. In the UK, the unions have witnessed the almost total disappearance of sectoral bargaining in the last decade and are resigned to decentralization. However, competitive multi-unionism, often within the major companies, has made it much more difficult to develop a coordinated bargaining response across the sector. There are also differences in responses to developments in HRM. In the UK, the response to new working methods has been largely defensive. To begin with, the national unions ignored its existence, and then began to identify it as an essentially anti-union strategy. Finally, they accepted that most of the major companies were employing HRM techniques, and that they were often attractive to members (e.g. improved job design, more participative work methods). Their approach now can be termed ‘constructive engagement’, with an emphasis on trading changed working practices for more traditional union gains in the area of pay and conditions. In other countries, like Germany and Denmark, where works councils have had many years of experience in dealing with workplace change, and in Italy, where recent legislation has given the unions a major role in workplace consultation, there has been a much more strategic response, seeing HRM as an opportunity to improve the quality of working life. Unions in Spain have not articulated a clear strategy on HRM because it is much less developed as a management strategy there, except in the largest foreign-owned multinationals. However, given recent evidence on the rapid transfer of HRM techniques within food multinationals (Coller and Marginson 1998), this seems to be an area to which they will soon have to pay considerable attention. Insofar as the collective bargaining agenda is concerned, we have seen that the considerable job loss in this traditionally low-paid, labour-intensive, low-skilled, and often casualized sector, has made the shift to a more qualitative focus difficult to achieve in most countries. Much bargaining effort and organizational resource has been expended in handling the process of workforce reduction. Employers’

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concessions have been in terms of improved redundancy payments for displaced workers. Only in Denmark have new issues, often taken from the Social Chapter, appeared. Minor gains have been made in other countries in exchange for agreeing to working practice flexibilities, but these have been largely symbolic. Issues which were gaining in importance during the 1980s, like equal opportunities, have if anything become less prominent. While training is an issue that is identified at national level as critical in all the countries, there is little evidence of implementation at workplace level except at the employers’ initiative. A shift to a more qualitative agenda may be a desirable development but the adverse economic circumstances in the sector make it difficult to achieve in the present situation. There was considerable concern about membership and recruitment issues, but little evidence of radical responses on membership participation, non-traditional recruitment, or the progressing of non-work issues. Relations with traditional parties of the left had become more distant and political activity more pragmatic. Finally, only at national level was the significance of international trade union activity clearly appreciated, notwithstanding the impetus given to this area by EWCs and the Social Chapter. Note 1 Food manufacturing activity is covered by relatively straightforward categories on SIC (Standard Industrial Classification) and NACE (general industrial classification of economic activities within the European Community) codes. A broad range of products and processes is involved, and the study concentrated on those subsectors between 15.12 and 15.89/1, which cover meat, fish, fruit and vegetable processing, and the manufacture of oils and fats, milk products, bread and cakes, confectionery, juices, soups, and ice cream.

6 Banking Teresa Lawlor and Rafael Serrano del Rosal

Introduction This chapter focuses on the development of responses in the banking sector, a sector which has undergone rapid and extensive change since the end of the 1980s. In particular, the deregulation of the industry and the impact of information technology, which will be discussed below, have introduced major changes which are being experienced at different rates in the different countries. Within this context one would expect to find more developed union responses in those countries which have been exposed to change earlier and more extensively, and this is to a considerable extent borne out by our findings. The chapter looks first at the economic environment of the banking sector. This is followed by a consideration of the industrial relations systems in banking of each country. The third section examines the responses the unions have adopted.1 Our initial definition of the sector was taken from the Standard Industrial Classification of Economic Activities (SIC) 1992 65.12/1: Banking. However, it was felt that, given the deregulation which is breaking down the traditional barriers between banks and other financial institutions, this could be too narrow a distiction. This has therefore resulted in some adjustments to the definition, although the main focus in all the countries studied continues to be the banks per se. By country, therefore, the primary focus is on the following institutions: • • • • •

Denmark: commercial banks, savings banks, and credit cooperatives Germany: commercial banks, savings banks, and local credit institutions Italy: commercial banks, savings banks, and credit cooperatives Spain: all types of public and private banks UK: commercial banks.

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Table 6.1 The top fifty global banks, 1997

Source: Own calculations based on data from The Banker 1998. Table 6.2 Relative position in relation to top fifty Western European banks (assets), 1996

Source: Own calculations based on data from The Banker 1997. Table 6.3 Location of non-EU foreign banks in the EU

Source: Own calculations based on data from The Banker 1996a, 1996b.

The economic environment of the sector The world and European context Table 6.1 shows the relative position of the countries in our study in relation to the fifty top global banks, ranked in terms of assets. Germany and the UK are ranked third and fourth place respectively, each having four banks within this grouping. This locates them below Japan but above the US and Switzerland. France, ranked second, is the only EU country with a higher position. Italy and Spain, in eighth

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and ninth position, account for a much smaller proportion of global banking. The Danish banking sector is too small to figure in the table. If we look in Table 6.2 at the top fifty Western European banks in terms of assets, Germany, with fourteen banks in this category, tops the list, with the UK some distance behind. Italy is in third position and Spain, with 3.42 per cent of the assets, in fourth. Once again, Denmark does not have any bank of sufficient size to figure in this data. In relation to global influences, Table 6.3 shows the presence of non-EU banks in the different countries in our study. In this respect, the UK has the highest percentage, underlining the role of the City as one of the leading international financial centres in the world. Germany is in second place, with a total of ninetyone banks, illustrating its increasingly prominent position which has been consolidated by the decision to locate the European Central Bank in Frankfurt. The lower rankings of Italy and Spain are partly as a result of previously strong restrictions on foreign banking. However, as in the case of Germany, there has been a notable increase in the presence of foreign banks in these two countries in recent years. The deregulation process The banking sector has undergone profound change as a result of the deregulation process, which has affected it since the 1980s, in all the countries examined in this chapter. At a European level, the signing of the Single European Act in 1986 gave major impetus to the process, with the commitment of EU countries to the complete liberalization of capital, services, and goods before the end of 1992. Subsequently the liberalization of capital was formalized in a directive on capital flows in 1988. This was followed by the Second Banking Directive which provided the framework for banking activities in the Single Market. Measures introduced have included the lifting of restrictions which had hitherto limited the roles of different types of credit institutions, thereby enabling the creation of ‘universal banking’ and the facilitation of cross-border banking (Vesala 1993). In order to comply with the directives and to maintain competitiveness in the face of increased competition from other European countries, each national system has passed through its own deregulation process. This has involved both structural changes, such as widening the range of activities in which banks are involved to include, for example, private pension provision and the sale of insurance (bancassurance), and also changes in conduct, such as the liberalization of loan and deposit rates, and reductions in reserve requirements. The impact on the different banking sectors has varied according to the degree of regulation which was in operation in the five countries in the early 1980s, the extent to which measures have been taken in anticipation of the EU directives, and the speed with which deregulation has taken place. In Germany, a country with little pre-existing structural regulation and a system of universal banking, the changes

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have had less impact, although high reserve requirements (progressively reduced in the early 1990s) restricted some activities and initially deterred foreign banks. Another country which was comparatively lightly regulated in the early 1980s was the UK. Moreover, a number of steps towards further liberalization were taken earlier than in other countries in our study. The Financial Services Act in 1986 was followed by legislation in 1987 which removed the distinction between the activities of banks and other financial institutions. As a result, the commercial banks have diversified their activities to include, for example, insurance, stock exchange dealings, real estate, and the sale of pension plans. At the same time there has been a growth in other financial institutions offering the services which, traditionally, were restricted to the banks. Examples include the extension of the activities of some building societies (for example the Halifax) and insurance companies (for example Abbey Life, Norwich Union), which now offer a full banking service. More recently, competition has been coming from other areas of the services sector, both in partnership with banks (but bypassing the traditional branch structure) and independently from retailers, such as Marks and Spencer, Virgin, Tesco, and Sainsbury’s. Deloitte (1995) predicts, on the basis of studies of other deregulated services in the UK and the US, that the impact of deregulation will be far reaching. Rather than retaining a universal banking remit, the retail banks are likely to be forced into a disaggregation of the services provided. This will lead to a concentration on the most profitable activities, with others being subcontracted or sold off. In Spain, the banking sector underwent a series of crises in the second half of the 1970s and early 1980s, which resulted in a number of mergers and acquisitions. These crises encouraged successive governments to maintain strong state intervention and regulation. From the mid-1980s, however, the deregulation process began and has been comparatively swiftly implemented, partly, as Rodríguez (1996) points out, in preparation for Spain’s integration with the EU in 1986, and subsequently in response to the European directives. Measures have included the removal of barriers which had previously restricted the operations of the savings banks and foreign banks, the liberalization of capital flows and interest rates, and, more recently, the progressive reduction in reserve requirements. In Denmark, as in Spain, deregulation has largely taken place in the second half of the 1980s. Unlike other Scandinavian countries which suffered major crises in their banking systems, Denmark was not affected in the same way. Deregulation of financial activities affecting the commercial banks and the savings banks took place from 1988, as did the liberalization of capital flows (Anderson 1995). From the beginning of the 1990s, banks have been able to diversify their activities to other areas of the financial sector either through the acquisition of insurance companies or the establishment of new subsidiaries. At the same time, the adoption of the Second Banking Directive established the right of banks to offer mortgage credit, hitherto restricted to specialized mortgage credit institutions (European Commission 1993a: 63).

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In Italy, on the other hand, the banking system continued to adhere broadly to a system dating back to the 1936 banking law, which had differentiated between the role of the banks and other financial institutions, until the introduction of new legislation in January 1994. This established the first measures to align the sector with the norms established by European legislation. A new universal model of banking removed the restrictions on banks engaging in insurance and other financial services and at the same time changes in conduct were introduced. One earlier measure, however, introduced in 1990, was the liberalization of regulations for opening new branches which resulted in an increase of 2,144 branches in the first year and steady increases in successive years (European Commission 1993:148). Thus, for the countries in our study the deregulation process has involved, and continues to involve, important changes in the roles, activities, and conduct of the banks. The most important effects of these changes are discussed below. The impact of deregulation Concentration A process of concentration in the sector has developed largely as a response to the need to increase competitiveness although, as Table 6.4 illustrates, the degree of concentration has varied considerably in the countries studied, with a much higher concentration in Denmark and a lower concentration in Germany and Italy. In all countries there is a trend towards increasing concentration. The increase in concentration is more marked in some countries than others. For example, in Spain the top three banks have increased their shares of assets by 10.46 per cent and the top five by 14.17 per cent, whereas in Germany the increases are 1.38 and 2.37 per cent respectively. This concentration of activity, as Gual and Neven (1993) point out, is primarily the result of domestic mergers and acquisitions. Anderson (1995) highlights the prevailing trends being towards economies of scale and, more recently, with deregulation breaking down the barriers within the financial sector, towards ‘economies of scope’. The high degree of concentration in Denmark is principally the result of the fusion in 1989 of six of the largest banks into two: Den Danske Bank (from Den Danske, Handelsbanken, and Provinsbanken) and Unibank (from SDS, Privatbanken, and Andelsbanken). Since then another big merger which has further increased concentration has been Bikuben with Girobank, in 1995, to form BG Bank. In Spain, where, as we have seen, the greatest activity has taken place, a number of large banks have traditionally dominated the market. Their position was reinforced in the 1980s and further consolidated in the 1990s with the merger which created the Banco Hispano Central (BCH) in 1991. However, in Germany there has been little change in overall concentration. Grasmann (1994:147) attributes this to a ‘relatively comfortable domestic profit

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Table 6.4 Relative importance of the biggest banks’ assets (as a % of total banks’ assets)

Source: Own calculations based on data from The Banker 1991, 1996. Note: *Based on top eight banks.

situation’. However, the proposals put forward in 1997 to form Bayerische Hypo und Vereinsbank (BHV), a regional bank large enough to challenge the hegemony of the biggest German banks, could well signal a period of increased activity in this area. Productivity The exposure to increased competition from both domestic and foreign banks, as a result of deregulation, has affected profitability in the case of Germany, Italy, and Spain, as Table 6.5 illustrates. However, earlier exposure and more radical restructuring in the UK and Denmark have begun to produce more positive results, as the 1993 figures show. Notable decreases during this period have been experienced later in Italy, Spain, and Germany, particularly from 1993–95, where either restructuring was begun later or has been a much slower process. A number of productivity-related measures have been adopted to address the impact of increased competition, including the reduction of personnel, the restructuring of branch networks, the re-engineering of business processes, the monitoring of performance targets, and the introduction of performance incentives. As a result, as Table 6.6 indicates, some increases in productivity have been achieved in all the countries included in our study, although, in three of them, productivity levels remain below the EU average. It is interesting to note, in particular, the much higher productivity ratio in the UK throughout this period (almost three times the Spanish ratio).

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Table 6.5 Relative profitability of the different banking systems (pre-tax profits per share)* (%)

Source: Asociación Española de Banca Privada, Resultados 1991, 1994, 1996. Notes: * Capital plus reserves. ** The number in brackets refers to the number of banks. These are the largest banks for which data was available in the respective countries.

Table 6.6 Credit per employee (000 ECUs)

Source: Asociación Española de Banca Privada, Resultados 1991, 1993, 1994, 1995, 1996.

Developments in information technology Information technology (IT) has been increasingly introduced to improve competitiveness, by widening the greater choice of products and services offered and cutting costs through automation. Cressey and Scott (1992) distinguish two stages in the development of IT in the UK, repeated in the other countries, albeit later. During the first stage, IT has supported the initial expansion of business through the use, for example, of automatic teller machines (ATMs) and back office automation. The second stage has supported the development of new business activities such as the so-called ‘direct banking’ (telephone and computer banking) and smart cards. The levels of IT support are increasing rapidly. For example, between 1990 and 1994, the number of ATMs per 10,000 population increased from 3.9 to 6.4 in Spain, from 1.1 to 3.4 in Germany, and from 1.3 to 3.3 in Italy (La Caixa 1996). Direct banking is also on the increase in all the countries in our study, particularly in the UK, Germany, and Spain. In the UK, for example, a survey carried out in 1996 revealed that all the major banks were operating some kind of telephone banking either through branches or as a stand-alone service. In addition, a number offered

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computer banking. Many of these services were available for 365 days of the year (Reardon 1996). The effects on the sector have been far reaching and extensively researched.2 The findings point, in particular, to the move to a more market-driven rather than customer-focused orientation, and to changes in the organizational structure, in working conditions, and in the composition, training, and career progression of the workforce. Another important feature highlighted by Cressey (1992) is the highly specialist nature of elements of new technology, which may take some of the decision making away from the banks themselves. Employment trends in banking The timing, extent, and nature of job losses has varied between the countries in the study, but by the mid-1990s all were experiencing a contraction in employment. The first countries to experience this were Denmark and the UK, where between 1990 and early 1996 job losses representing approximately 20 per cent and 12 per cent respectively of the banking labour force were recorded. The decline in the other three countries has been less severe. In Spain, the first losses were recorded in 1992 and, except for a slight increase in 1993, have continued with an overall loss of 3 per cent from 1992 to the beginning of 1996. In Italy, the decline has been lower (approximately 2 per cent 1994–96), although more recently, as restructuring takes hold, much more extensive job losses have been threatened (EIRR 278 1997). Finally, in Germany, overall numbers have shown little decline although the situation is more complex as a result of the integration of West and East German systems. These overall figures hide changes within the different subsectors, in particular a small decline in the commercial banks. As a result of reorganization, the size of branches is also changing, with the average size decreasing, except in Denmark. However, as Table 6.7 indicates, there is considerable variation in branch size across the countries studied. The average size is considerably lower in Spain than in the other countries. This can be explained by the priority given to retaining personal contact, partly for cultural reasons and also in order to retain customer loyalty in the face of strong competition from local and regional savings banks, with extensive local networks. The policy has therefore been to maintain the existing network as far as possible, but reduce costs by cutting the number of employees. The average size of branch nevertheless masks a growing tendency towards polarization whereby a number of activities have been concentrated in large regional processing centres, whilst, at the other end of the spectrum, comprehensive branches have been replaced by very small sub-branches with a skeleton staff. At the same time, restructuring has brought increasing casualization in most countries. In Spain and Italy, this has resulted primarily in an increase in the number and types of fixed-term contract. In the UK, Germany, and, to a lesser extent, in Italy, the number of part-time workers has increased. In the UK, there is also a growth in the number of agency staff.

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Table 6.7 Number of employees per branch

Source: Asociación Española de Banca Privada, Resultados 1991, 1996.

The proportion of women in the banking labour force has increased. In 1995, for example, in Denmark, women represented more than 50 per cent of employees and, in the UK, 47 per cent (Finansforbundet 1996; BIFU 1996). In Spain, in the period 1990–95, the percentage of women in the workforce grew from 17.8 to 22.8 per cent of the workforce (FeS-UGT 1997). However, as more women have tended to be employed in the administrative grades, where the greatest reorganization has taken place, they have also tended to be more affected both by job loss and increasing casualization. Thornley et al. (1997), for example, in a study of British and French banking, point to recent trends, linked to reorganization, which have resulted in a greater segmentation of the workforce between more secure, highly qualified jobs on the one hand, and temporary and part-time work on the other hand. This has had a particularly negative impact on women. A study of the restructuring of Danish banking similarly finds that, despite efforts to convert parttime jobs to full time through retraining, the part-time workforce, largely women, are primarily located in the lower-grade jobs with a less certain future (Anderson 1997). Job segmentation is further accentuated by new requirements for much greater specialist knowledge. This is tending to result in a fragmentation of different parts of the business so that the broader general training, hitherto considered essential for potential managers, is no longer a fundamental requirement (Cressey and Scott 1992; Storey 1995). As the need for specialization increases, there is also a small but growing trend towards buying in professionals to take on this work (as opposed to the traditional approach which has been to train employees inside the bank to take on new work). Future trends The initial impact of deregulation was less in Germany (traditionally not very structurally regulated) and more gradual in the UK (initially less regulated than the other countries and subject to the deregulation process from an earlier date). Nevertheless, its effect on all the countries in the study has been significant and is still ongoing. Forecasts for the next ten years refer to an acceleration of the change

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process. Llewellyn (1995) and Deloitte (1995) point to an increase in the number of institutions offering what have up to now been regarded as traditional banking services, with a further diversification of banking into other services. They also signal the disaggregation of these services, with greater emphasis on sales and profitability (and hence pricing), rather than traditional, longer-term objectives such as growth. The management human resource agenda The changes in employment practice in the sector have been comprehensively documented in a number of studies.3 The main themes which stand out are the management of job loss, flexibility, reward systems, and the move towards a greater emphasis on employee individualization, all of which have had an impact on the conduct of industrial relations across the sector. These changes in employment practice have been so fundamental that in the UK there has been some debate about whether they are sufficiently far reaching to constitute a ‘new paradigm’ (Cressey and Scott 1992) or just a ‘state of exceptional flux’ (Storey 1995). Whichever approach is taken, they are seen as heralding major changes in the employment relationship. The management of restructuring and re-engineering of the business processes has highlighted a number of issues related to the organization of work, training, and the career aspirations of employees (Cressey and Scott 1992). In particular, in all countries, employers have been involved in managing a cultural shift in the expectations of employees, who have hitherto regarded a job in banking as one of the most stable of all career prospects. In an increasingly competitive environment, there has been an emphasis on flexibility to meet the changing needs of the sector. The first developments concentrated on issues such as increased geographical flexibility and attempts to increase functional flexibility through changes in grading, job categories, etc. However, the focus is now upon working time flexibility, which affects the whole workforce. This is being pursued by employers in order to increase the public’s access to services and hence to retain, or sometimes to gain, a competitive advantage over other providers. Another feature has been the growth in specially designed reward systems to increase motivation and productivity. The UK has taken the lead in respect of systems of individual performance-related pay. In other countries, the emphasis has been on a wider range of incentives which have also included commission and bonus payments and have typically related both to individual and group performance. There is a trend towards the extension of such schemes and the allocation of a greater proportion of the overall pay settlement to them, as exemplified in Italy by the 1998 framework agreement for the banking sector (EIRR 291 1998). Increased job segmentation and a greater emphasis on individual financial rewards have contributed towards a greater emphasis on individualization. In Spain and the UK, in particular, there has been a growth in the number of individual

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contracts outside the collective bargaining arrangements. Linked to this increased individualization, as Thornley et al. (1997) have pointed out, are greater efforts to gain direct employee commitment to the bank. All these factors have produced a change in the conduct of relations with the unions. Anderson’s reflection on the challenges this represents for employers in Denmark sums up the situation in all the countries in the study, as employers make efforts to ‘balance the risk of provoking conflict or worsening cooperation, with the aim of reducing costs’ (1995:261). The industrial relations context Trade union organization and density Organization The principal trade unions in the banking sector in the five countries in our study are given in Table 6.8, together with the scope of membership of each union. A number of different patterns of organization emerge. The first, only typified by Denmark, is of one union representing banking staff. Finansforbundet was created in 1990 as the main trade union for banking sector employees as a result of the merger of three unions which had hitherto recruited in different parts of the sector. These were DBL, representing Danish bank employees, DRL, workers in Danish building societies, and DS, the union for the Danish savings banks. The merger was to a large extent prompted by the centralization of the employers’ associations in 1989 into one association (FA) (referred to below) and the merger of a number of the largest commercial and savings banks in 1990. Finansforbundet is a vertical, industrial union (Scheuer 1998), recruiting all levels of employees. In addition, there are a number of professional unions which recruit among the small group of senior professionals, who have been employed by the banks to develop the new areas of work which have arisen as a result of deregulation, particularly specialist financial operations. In both Italy and Spain there are a number of unions, originally differentiated primarily on an ideological basis (as discussed in Chapter 3) and linked to the main union confederations. In Italy, two of the three largest unions are linked to the major trade union confederations: FIBA, with 25.2 per cent of the overall banking membership in 1996 to the CISL, and FISAC, with 22.1 per cent, to the CGIL. Together with UIB, linked to the UIL, with 10.74 per cent of the membership, these federations have 58 per cent of the overall membership.4 In Spain, the FeS (the Federation of Services), which has in membership 13.5 per cent of banking workers (FeS-UGT 1996:24), is part of the UGT, and FEBA, the banking and savings bank federation, is part of CC.OO. Some banking workers are also members of large regional unions in the Basque country and in Galicia.

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Table 6.8 Principal trade unions in the banking sector

In both Spain and Italy, there are also a number of unions which are independent of the main union confederations. In Italy, where they are more important in terms of membership, the most significant are FABI and FALCRI. The latter has a large membership in the savings banks, from which it originated. Together, these two unions make up a further 34 per cent of the overall membership (1996).5 In Spain, there is a third union, FITC, linked to a loosely knit federation of unions which define themselves as independent but which have traditionally had a conservative leadership. FITC has a limited membership, acting primarily as a vehicle for putting forward candidates for union elections. In Germany, there are three principal unions which recruit in the banking sector. The most important is HBV, the union for employees in banking, insurance, and the wholesale and retail trade. It is a DGB-affiliated union and was founded as an alternative to the DAG (mentioned below) after the latter’s decision, in the post-war period, to split from the DGB in the British occupied zone. Within the DGB, the HBV is the fifth largest union. The ratio of white collar to blue collar workers in membership is approximately 10:1. The union is structured in five divisions: banking, retail trade, wholesale trade, economic services, and insurance. The most important is the retail trade division which, at the beginning of 1994, represented 57 per cent of the membership. In comparison, banking made up 9.7 per cent of

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the overall membership in 1997, having slowly declined in importance from a high point of 14.3 per cent in 1987. Another DGB union which recruits in banking is ÖTV, the public services and transport workers’ union, with a membership in the state-owned savings banks. Within the DGB, ÖTV is the second largest union, but employees from banking constitute a small minority of its membership. The third union is the DAG, the German salaried employees’ union, mentioned above, which was founded after the Second World War and recruits white collar workers from both the public and private sectors. It is organized into eleven occupational groups, which include state and private banking, insurance, and commerce respectively. In the UK there are two types of organization: BIFU, which recruits across the whole finance sector, including insurance, and a number of company-based unions, of which the most important are UNiFI (Barclays), NWSA (NatWest), and LGU (Lloyds). Until recently this differentiation was further accentuated by the fact that BIFU was the only union affiliated to the TUC. UNiFI, however, has been a member of the TUC since 1996. BIFU changed its name from NUBE (the National Union of Banking Employees) in 1979 to reflect the broadening of its membership base. It currently recruits across the whole of the financial sector, although the majority of the membership comes from the English and Scottish clearing banks (72,000 members representing 64 per cent of the overall union membership in October 1997). It has its highest concentration of members in the Midland Bank, where, following the derecognition of MSF in 1981, BIFU became the only recognized union (21,485 members in October 1997).6 UNiFI, originally called Barclays Group Union, changed its name in 1994, signalling a more independent stance (Gall 1997). By dropping Barclays from the name, the change would also enable the union to recruit more widely within the financial sector, although at present membership is confined to the Barclays Group. With a membership of 45,546 (December 1996), it is the largest company-based union. The other company unions with a significant membership are NWSA (34,493 in May 1998) and LGU (28,340 in June 1998). UNiFI, NWSA, and LGU, as inhouse organizations, have in the past tended to be viewed as more conservative than BIFU and less independent of the employer. However, the relationship with the banks has changed, both as a result of the appointment by the unions of a number of officials from outside the banks with a trade union background and, more important, because of the increasingly problematic employment situation faced by banking employees. Currently discussions are underway between BIFU, UNiFI, and NWSA on forming a closer organizational relationship, which would consolidate the position of these unions within the sector (see ‘Inter-union relations’ later in this chapter).

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Table 6.9 Union density in the banking sector

Source: * Based on figures provided by trade union respondents, 1997–98; ** Labour Force Survey 1997.

Density As Table 6.9 indicates, the country with the highest density is Denmark with 95 per cent. This compares with an overall trade union density in the country of 82 per cent in 1995. In general, the high levels of union density in Denmark are traditionally attributed to union involvement in the distribution of unemployment benefit (as mentioned in Chapter 3). Scheuer (1998), however, emphasizes the importance of the role of the unions in protecting individual employees’ rights, for example through union representation in industrial courts, which is particularly attractive to individuals at times of high unemployment and uncertainty. Therefore, the difficult employment situation in banking in the 1990s would have encouraged union membership, and also trade union unity in the sector. In Italy, density in the banking sector is also high, at 49 per cent as compared with an all-sector figure of 39 per cent (1995). Recent figures show a slight increase in the period 1992–96. In the UK, it is difficult to identify the density of membership in the banking sector separately from the financial sector as a whole, given the overlap in the provision of services between the different subsectors as a result of deregulation. In 1997, the density for banks and other credit institutions was calculated to be 49 per cent (Labour Force Survey 1997). Density in the clearing banks is higher than in other parts of the banking sector (Müller-Jentsch and Sperling (1995) give 75 per cent). Overall, membership numbers have declined, largely as a result of the decline in the workforce, but density has been maintained through new recruitment. Gall (1997) suggests that this may be partly the result of restructuring, which has involved the transfer of administrative work from branches to large regional centres. These greater concentrations of staff are easier for the unions to organize. In comparison with Denmark, Italy, and the UK, density in Spain is relatively low. However, density in the banking sector is still well above overall Spanish density levels of union membership. There are several factors which contribute to this. In comparison with other employment sectors, banking still has a much larger percentage of stable, permanent jobs and memberships tends to be greater amongst such workers. In addition, the banking federations tend to be well resourced as, in many instances, workplace union facilities are heavily subsidized by employers. This enables them to deploy more resources towards increasing recruitment. There is a slight increase in membership, which can be attributed to a growing unease and

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Table 6.10 Results of elections for Spanish works committee representatives, 1994 and 1998

Source: FeS-UGT 1996, 1998.

hence collective response to what is perceived to be a gradual erosion of status and pay. Density is low in Germany and falls below other sectors. This can partly be explained by the fragmented nature of unionization in the sector. Jacobi et al. (1998) also point to the fact that membership among white collar and female workers has not grown in Germany at the same rate as their increasing numbers in the workforce, a factor which would have an important impact on the banking sector. However, in the case of Germany and Spain, the support obtained by unions in workplace elections for works council/committee representatives is also an important indicator of union strength. In Spain, the percentage of delegates held by the different organizations after the last two rounds of elections can be seen in Table 6.10. An analysis of the results of the previous election results revealed that CC.OO and UGT were together consistently obtaining some 60 per cent of all the delegates (FeS-UGT 1996:24). In Germany, in private banking, in the 1994 works council elections, 38.2 per cent of the representatives were organized by HBV and 10 per cent by DAG, which meant that just over 50 per cent of the members were non-union, as opposed to a figure of 21 per cent in all sectors (Jacobi et al. 1998), a worrying level, as the unions themselves acknowledge and upon which they are seeking to improve. This consideration of membership and density reveals some diversity across the five countries. Whilst membership is organized predominantly in industrial unions, there is a marked difference between Denmark where one union seeks to recruit almost all employees, except top management, and the rest of the countries where there are competing unions, causing various degrees of fragmentation. Where the remit of the relevant unions stretches beyond the financial sector, as in Germany and Spain (FeS-UGT), the banking section has often to compete for resources with the demands of other sections of membership and has to struggle to establish its identity. It is perhaps not surprising that unionization is highest in Denmark, where there is least fragmentation, and lowest in Germany, where there is a high degree of fragmentation both in terms of number of unions and types of organization, with both the industrially based HBV and the general unions (DAG and ÖTV).

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Collective bargaining coverage In all the countries studied, with the exception of the UK, multi-employer negotiations take place. There is, however, some difference in the emphasis given to sectoral- and enterprise-level bargaining. In Denmark, employer representation, like union representation, is highly centralized as the result of mergers in the late 1980s. The FA represents a merger in 1989 of three employers’ bodies from the commercial banks, the savings banks, and the insurance companies respectively. It covers 83 per cent of the banks and 55 per cent of the savings banks (Anderson 1995). The FA is not a member of the DA (the Danish employers’ federation), just as the banking union Finansforbundet is not a member of the LO (the Danish trade union federation). These factors, together with significant union and employer mergers, have, it has been suggested, played an important role in the move towards a single industry agreement (Scheuer 1998). The overall trend in pay bargaining in Denmark, described by Scheuer (1998) as a movement from a centralized ‘normal’ pay bargaining system (in which pay and conditions are agreed at sectoral level) towards a ‘minimum’ system (in which only the minimum conditions are agreed at sectoral level and local pay bargaining occurs), has not been followed by the banking sector. This can be explained both by some employers’ fears that decentralization would lead to internal competition and by the union wish to maintain uniform pay and conditions across the sector, in an increasingly competitive environment. Anderson (1995) points, however, to a developing recognition by the larger employers of the advantages which decentralization might bring in terms of flexibility. Moves in this direction are being resisted by the unions. Collective agreements cover all employees except at the highest level. Commercial and savings banks have separate collective agreements. Respondents said that the savings bank agreement is still considered more employer friendly by some managers, although in practice the differences are small and are being progressively narrowed down. The commercial bank BG Bank, created out of the merger of Girobank and the savings bank Bikuben, opted for the savings bank agreement in 1995. In Italy, the ABI (the banking employers’ association) coordinates the activities of employers in the different subsectors. Its position was consolidated considerably in 1997 when ASSICREDITO, representing the commercial banks, merged with ABI. Other subsector organizations include ACRI, for the savings banks, and several which represent the cooperative banks, such as, for example, Associazione Nazionale Luigi Luzzatti fra le Banche Popularii and the Associazione Tecnica delle Banche Populari. Multi-employer sectoral agreements are concluded with the ‘most representative’ unions (as discussed in Chapter 3). There are two such agreements, one for the commercial and savings banks and one for the credit cooperatives. Agreements are effective for a four-year period, except for pay, which lasts for two years. A sectoral agreement establishes the framework and determines what can be negotiated at

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enterprise level, for example the provision of information, ranking systems, professional development, work schedules, and, more recently, bonus payments. A framework agreement signed in February 1998 which includes substantial measures for reducing labour costs (EIRR 291 1998a) sets out the parameters for the next bargaining round. The 1994 sectoral agreement incorporated the changes arising from the national tripartite framework agreement in July 1993, which provided for two levels of negotiation: at sectoral and local level (through the setting up of the RSU or workplace committees). In contrast to other sectors, elections for workplace representatives have still not been held, despite a further implementation agreement in 1997. The delays can be explained in part by the fact that the new arrangements for enterprise-level bargaining are not easily compatible with the existing system and in part because the existence of a large number of unions makes it difficult to reach an agreement. In particular the non-confederal unions, which tend to lack the necessary infrastructure at local level, are not enthusiastic. In Spain, the ‘most representative’ unions and the employers’ organization, the AEB, negotiate a national sectoral agreement which covers almost all the banks in the sector. The agreement establishes the minimum wage levels and working conditions for each category of employee although, because of failure to reach an agreement between 1992 and June 1994, there was no sectoral agreement in force and pay increases were fixed by individual banks. In June 1994, the delayed agreement was finally signed and the subsequent agreement was signed, on time, in January 1996 (Rodríguez 1997). There are also a number of company agreements which, using the national agreement as a basis, deal with specific company-related issues. These tend to exist in the larger banks and in some cases the unions are able to obtain considerable local improvements on the sectoral agreement. However, decentralized bargaining is by no means the norm. In addition, a small minority of banks, for example Argentaria, originally state owned, do not come under the national agreement but have their own company agreement. Such agreements, in practice, differ very little from the sectoral agreement as they are negotiated by the same representatives and are timed to take place after the sectoral settlement, so that the latter provides a strong frame of reference. One of the most significant features of the Spanish situation in this sector, however, is the decline in bargaining coverage. An estimated 50 per cent of workers are currently not covered by the collective bargaining system and this number is growing. This is linked to the growth of outsourcing, direct banking, and individual contracts, which are discussed later, in the section on union responses. Although in the banking sector in Germany there are sectoral agreements, negotiations with the various unions were carried out separately until 1994. Since then, however, the ÖTV and DAG have been involved in joint negotiations. HBV and DAG have also recently signed cooperation agreements which ensure that they work out any differences before meeting with employers. There were also separate agreements for the former East Germany, although harmonization of agreed wage rates was completed in 1997 (EIRR 286 1997).

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The employers in the private banks are organized in the APK, which is dominated by the large commercial banks (Müller-Jentsch and Sperling 1995) and highly organized. Muller (1997) gives a figure of 95 per cent membership. The sectoral agreement establishes a framework of conditions which are built upon by local bargaining at works council level. In practice, there has been a shift of emphasis in favour of the local level, in line with the overall trend in all sectors (EIRR 285 1997), as negotiations have focused more on issues related to specific working conditions in particular companies, in areas such as working time flexibility and the introduction of new technology. In the UK, there was multi-employer bargaining in the Scottish clearing banks until 1986 and in the English clearing banks until 1987 (although Midland Bank abandoned the national negotiations in 1985). Since then the banks have negotiated separate company agreements, and, as the settlement dates are at different times of the year, it has in practice been very difficult for the trade unions to maintain the same parameters for all agreements. As Müller-Jentsch and Sperling (1995) have pointed out, the company-level bargaining currently in place gives greater discretion to employers when seeking to introduce technological and organizational change. The company agreements cover all employees in the clearing banks except the highest level managers. However, the recent practice of spinning off the different banking activities into separate, independent companies (insurance, real estate, stockbroking) has been accompanied by moves to transfer employees in these new companies on to individual contracts and avoid union recognition. This has reduced the number of employees covered by collective bargaining. At the same time, the extensive introduction of performance-related pay has reduced the percentage of salary which is covered by collective pay awards. Deregulation and the introduction of new technology have given rise to two new groups of employees who are not covered by collective bargaining in some countries. These are, first, the workers in ‘direct banking’ (telephone and computer services which bypass the branch structure). Direct banking in Germany, Spain, and the UK is organized in specially established companies outside the collective bargaining framework. The number of these workers is growing as these services increase. The second group is that of specialist technical managers, who have not come up through the bank hierarchy but have been brought in to manage new areas of work. Summary of the main problems faced by the unions in the banking sector The three main problems faced by the unions in all the countries are growing job insecurity, the rapidly changing work environment, which requires new and flexible responses from the unions in pay and working conditions, and the decline in membership as employment in the sector falls. Job losses, as a result of mergers and restructuring and the introduction of new technology, have already been discussed. The unions’ continual fight to prevent

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these losses and, in many instances, their failure to prevent them has strained the relationship with employers. There are predictions of further rationalization threats to jobs, so the unions are aware of the need to increase their efforts and seek new solutions, as the number of workers willing to take redundancy payment, or eligible for early retirement, diminishes. The second main problem faced by the unions is related to the changes in work organization, introduced as a result of greater competition and new technology, which bring them face to face with new demands for flexibility. These typically include pressures from employers for greater functional flexibility, with associated changes in job classification, more geographical mobility and, above all, more flexibility in opening hours. Unions in all five countries are faced with the problem of reconciling pressures to modify working conditions in order to increase profitability, and hence retain jobs, with the need to maintain working conditions. In Italy, for example, as a result of the December 1994 agreement, the unions became involved in discussions with employers to reduce the number of job categories from twelve to four. In Spain, proposals for Saturday working and also to extend split-day working (at present employees work just one afternoon, finishing at 3 p.m. on the other days) are particularly contentious. In a similar way, the UK unions have been faced recently with proposals for Christmas Eve and New Year working in England and Scotland respectively, which they have strongly resisted. The third problem is the threat to their power which unions are experiencing because of the erosion of their traditional membership base. This manifests itself in different ways: the decline in membership as a result of job losses (in the UK, Germany, and Denmark), increases in outsourcing (UK, Germany, and Spain), the entry of new groups of specialized professionals who are not easily unionized (Italy, Spain). In addition, there is no longer a steady intake into banking of school leavers on permanent contract, which provided an important source of new recruits in the past. Collective bargaining has also been weakened both by the growth in the number of employees on individual contracts (particularly in the UK and Spain) and by the rise in the number of telephone/computing banking operations (direct banks). Employees in the latter tend to have inferior conditions of service. Some of the earliest and most acute examples of these problems can be found in the UK, particularly in relation to job losses, where the lack of a regulatory employment framework and the early deregulation of the sector have produced the severest impact. Spain and Germany are in an intermediate position. In Spain, the protection offered by employment legislation has meant that job losses have been largely agreed between employers and unions and have therefore been achieved without recourse to compulsory redundancies. However, a growing number of individual contracts in Spain attests to the weakness of the unions. The increase in individual contracts undermines collective agreements (as does the expansion of a growing number of workers in direct banking, on inferior working conditions). In Germany, the strong institutional framework at national sectoral level has made it possible to manage job losses via mechanisms such as a voluntary reduction in

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working hours and also to prevent any of the growth in fixed-term contracts. However, pressures by employers to decentralize negotiations over more issues to the level of the works committees constitute a major problem for the unions, as their weaker presence at enterprise level will make it difficult to resist the demands for greater working flexibility, such as annualized hours and variable pay, which are part of the employers agenda (EIRR 269 1996). Delayed deregulation in Italy has meant that threats of job losses have been experienced later than in other countries and the issue only began to be tackled comprehensively in 1998. At the same time, the tripartite development of a framework of agreements on benefits, retraining, and increased flexibility, and their sectoral counterparts, should considerably ease the restructuring process and also prevent the erosion of conditions through more flexible working practices. Nevertheless, the increase in two types of employee (highly specialized professionals and part-time workers, both, for different reasons, difficult to recruit to union membership) threatens to weaken the power of the unions as in other European countries. In Denmark, the introduction of measures to reduce employment have been a shock in a system traditionally characterized by a high degree of job security and copartnership in employment decision making. Respondents spoke of 1992 as a ‘watershed’, following the rationalization process in Den Danske Bank. Employers have also demanded greater flexibility in working time and changes in working hours (Anderson 1995). These changes have brought about the need for the unions to re-examine some of the assumptions about partnership which supported the collective bargaining system. Trade union responses This section of the chapter focuses on the responses of the unions in the banking sector to the problems that they face. The responses are structured so as to relate to the five areas highlighted in the discussion on trade union responses in Chapter 2. The union-employer relationship A constructive dialogue-based relationship? In all the countries in our study, despite the tensions deriving from job losses, the unions are striving towards a constructive dialogue-based relationship with employers, in order to participate as fully as possible in the discussions over the future shape of the financial sector and to retain a key role in the prevention of job losses and detrimental changes in working conditions. In the case of the Spanish and Italian trade unions in particular, with a greater tradition of conflictual relations, respondents acknowledged the need to move from a confrontational to a more dialogue-based system, and were responding

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accordingly. One Spanish respondent characterized the current relationship as ‘less peaks and more plateaus’, and a move towards this less conflictual relationship is illustrated, for example, by the ease with which in Spain the 1996 collective agreement was agreed, within the stipulated time, in comparison with the eighteenmonth delay in the case of the previous agreement. There is also evidence of cooperative working with employers in recent joint efforts to establish consultative mechanisms with the banks’ Latin American subsidiaries, along the lines of a European Works Council. In Italy, greater cooperation with employers has been easier to achieve in the larger banks, where the unions which are part of the main confederations are stronger. In the smaller banks, however, where there tends to be more membership of the autonomous unions, negotiating styles have changed less. In order to work towards a more collaborative relationship with employers, however, very different responses have been required from unions in different countries. The more intransigent attitude of employers, within the context of an increasingly competitive situation, has, in some cases, meant that the unions have been faced with the need to adopt responses which are more conflictual than previously, supporting the stress by Leisink et al. (1996) on the need for unions to be able to choose the most appropriate model from the whole repertoire of unionemployer relationships. Accordingly, in Denmark, Germany, and the UK, relatively conflictual union responses have been found, exemplified by breakdowns in negotiations, threats of strike action, and recourse to industrial tribunals. In Germany and Denmark, such responses are particularly striking because both systems are traditionally based on a high level of cooperation and trust between the actors, as referred to in Müller-Jentsch and Sperling (1995). Moreover, in the case of Denmark, as Anderson (1995) has pointed out, the traditionally consensual nature has been further reinforced by the fact that all levels of employees, only excluding the most senior managers, are members of the same union. A similar pattern of response was observable in the UK, where again the banking sector unions have also been traditionally less conflictual than their industrial counterparts. Gall (1997) characterizes this as a move towards greater ‘unionateness’7 rather than militancy, involving the choice of appropriate responses from the whole range of possible sanctions, including strike action. With regard to the types of sanction used by the unions, in all the countries there are instances of working to rule, threats of strikes, and ballots for strike action, but typically the action stops short of striking. Respondents in the different countries have spoken of the reticence of banking employees, in comparison with those in other sectors, to actually go on strike, which has limited the bargaining strength of the unions. However, we were able to note some differences in response in respect of strike activity, as we have noted in terms of the employer relationship as a whole. Whereas strike activity has tended to decline in Spain and Italy, it has been inclined to increase in the other countries. For example, Gall (1997) lists four national strikes in the UK in the period 1991–95, estimated to involve over 39,000 workers, to which the three one-day strikes in Barclays Bank in 1997 over a new system of

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performance-linked pay should be added. In Germany also there have been warning strikes (EIRR 269 1996). Respondents suggest that, in the countries where strikes and other forms of industrial action have traditionally been least prevalent, changes in work culture have played an important part in the more recent ability of unions to mobilize employees. These changes relate to the reduction in job security which workers at all levels are experiencing in a sector in which, until recently, employees had a ‘job for life’. Decentralization The enterprise-level focus which is referred to in Chapter 2 has not been reflected to the same extent in the banking sector, except in the UK where company bargaining was introduced in Scotland in 1986 and in England in 1987. In the other countries, respondents spoke of growing pressure for enterprise bargaining both from banking employers and as part of the general trend towards greater decentralization in other sectors. There was a clear convergence in the unions’ responses: to retain national sectoral-level agreements, where the greatest bargaining strength lies, and to use this level to secure as much agreement on standardized terms and conditions as possible. It was felt that a fragmentation would result in a worsening of conditions for all. Within this overall response, however, different approaches have been adopted to achieve the desired result. In Denmark, Finansforbundet is seeking to retain all bargaining at sectoral level, as opposed to the wish of some employers to decentralize. In Germany, the unions are pressing to retain pay bargaining at sectoral level, although working conditions are habitually discussed at enterprise level. In Italy, similarly, bargaining at sectoral level is used to develop a strong framework of agreements establishing minimum conditions on issues such as a new grading structure and mechanisms for implementing performance-related pay, which can be built upon by enterprise-level bargaining. In Spain, once again the sectoral-level agreement plays a key role and is perceived as a safety net which establishes minimum levels. Company-level agreements are encouraged when improvements can be secured, so that these gains can then be used to establish best practice in subsequent sectoral negotiations. Notwithstanding the emphasis on sectoral bargaining in four of the countries studied, the unions have sought to equip local representatives to intervene more effectively in enterprise-level negotiations. In both Germany and Italy there are efforts to build up the number of union representatives on the works councils. In Germany, respondents in HBV spoke of the need to place more emphasis on the particular characteristics of the different workplaces, in order to involve more employees, demonstrate the relevance of the union’s activities, and hence gain more union members as councillors. In both countries the unions are organizing more training in order to encourage members to stand as works council delegates and to improve their ability to handle what are increasingly complex negotiations. In doing so, the unions’ central departments play a key role as facilitators. Wever (1994)

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refers to this type of union support for works councillors, helping them to prepare an alternative plan for reorganizing work in Commerzbank. In Spain, when the decision to strengthen workplace presence was taken at confederal level, the banking federations participated (along with the other federations in the two major confederations) in the debate over the relative importance of the two channels of representation at workplace level—the trade union branch and the works committee. The outcome, not without problems, especially in CC.OO, was a decision to give greater emphasis to the role of the trade union branch, as discussed in Chapter 3. Recognition In the UK, whilst in general there are no formal recognition problems in the clearing banks (with the exception of the de-recognition of employees on managerial grades, discussed below), there have been problems with offshore banks in the Channel Islands and the Isle of Man, which have separate legal status. In 1994, when one of the banks withdrew recognition from its employees on the Isle of Man, the two unions involved (BIFU and UNiFI) responded by taking legal action through the High Court in order to put pressure on the bank to reconsider its position, although there has still not been a successful outcome. In addition, de-recognition problems have been experienced in the UK as a result of the restructuring of banking operations in the main clearing banks in the last few years. Work in areas such as the securities market and merchant banking has been transferred to a number of autonomous companies and, in many cases, employees transferring from the main bank have been put on to new contracts, which explicitly exclude union recognition. The unions have responded with a two-staged approach, seeking to obtain enough members in the first place to gain the right to union representation for individual members, and then working towards sufficient membership to press for full recognition. A more recent problem has been the derecognition of managerial grades in one of the clearing banks. BIFU has moved quickly to ensure that this group continue to have individual representation rights, and that representatives of the managerial grades on the newly elected works council of the bank are BIFU members, in order to demonstrate to the bank the continued support for the union by employees at this level. In the other countries, formal recognition is not problematic, but, with the exception of Denmark, there are difficulties in maintaining de facto recognition. This has resulted in a decision to put greater emphasis on an active union presence in the workplace. In order to achieve this, for example, in Spain, where the diminishing size of bank branches has led to organizational problems, a carefully coordinated system of regular visits by union delegates to outlying branches has been put in place. This ensures that employees are kept in touch with issues and feel that their needs are understood and represented by the union.

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The impact of outsourcing and the growth of direct banking on union-employer relations There are two further problems which are of particular importance since they affect all the unions and condition the relationships with employers in this sector: the introduction of outsourcing and the growth of direct banks. Initially, outsourcing embraced more peripheral activities such as security and messenger services, canteens, and cleaning, in a move to streamline activities and cut costs. A second wave of outsourcing, however, has focused on activities hitherto regarded as core, such as data processing and other computing operations. The response of the unions is varied. Danish and Italian respondents had experience of the outsourcing of data-processing activities, and tended to regard it as making strategic sense, while stressing the need to ensure that employees remained within collective bargaining structures. In Denmark, for example, all data processing required by the savings banks is outsourced to the jointly owned savings banks’ computer centre (SDC). Respondents in Italy referred to the development of contratti complementari (complementary contracts) which have been adopted to cover such circumstances and keep employees within the bargaining structure. The general response from unions in Germany and Spain is to view outsourcing less positively but to seek to ensure that, when it occurs, the transfer is effected without loss of employment and without worsening the conditions of service of the employees involved. The unions have sought to ensure continued trade union membership and recognition, either with themselves or with another recognized union, when outsourcing has gone beyond the boundaries of the financial sector. In this respect, Spanish respondents mentioned discussions underway for an agreement with IBM. In the UK, responses similar to the ones described above have been adopted, but the outsourcing process began earlier and has extended further into core activities. As a result, a two-stage response has been developed. First, the unions proactively seek to identify the departments which may later be transferred and increase the membership in them, so that the union presence, and therefore the ability to protect employees, is strengthened. Then, they try to ensure that transferred employees have the same membership and representation rights as before. In this respect, they closely monitor the observance of the transfer of undertakings legislation (TUPE). Respondents from BIFU indicated that they have learnt a great deal about the implementation of TUPE from the exchange of experiences with other unions in the same situation, and they have then been able to put this experience into practice. The second problem, and one of increasing importance, is the emergence of direct banking, as part of the process of technological innovation in the sector. It has typically involved the setting up of separate companies to run the new operations, with inferior working conditions (for example lower pay, less job security, and twenty-four-hour shift working). In Italy, where these services are still not very widespread, they continue to be located within the banks and subject to collective

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bargaining. In Denmark too, Finansforbundet has been successful in negotiating sole bargaining rights for these workers. In Spain, Germany, and the UK, however, employers have sought with some success to minimize union involvement. The union responses to this situation have varied, but all are focused on gaining members and thereby obtaining recognition. In Spain, the unions are trying to include workers in direct banking in a collective agreement for teleworkers. In this way, respondents argue, they will be collectively organized but not in the same agreement as banking workers, and therefore their inferior agreements will not erode bank workers’ conditions. On the other hand, in Germany the unions argue that any agreement covering banking workers which is not part of their collective agreement would risk being distinct and inferior, diluting their own. The unions’ response, therefore, is to try to recruit members in the direct banks and advise them that, although they generally work in small groups, they should press for a local or regional works council covering groups of direct banks. This could then put pressure on employers to participate in the sectoral bargaining machinery covering the banking sector and make it easier for the unions to maintain some control. The UK unions have sought to establish representational rights for members as a first step to getting full negotiating rights. In accordance with this type of two-stage procedure, UNiFI, after a successful ballot of employees, has now been given representational rights in Barclaycall and BIFU has obtained full negotiating rights in First Direct (Midland Bank). In conclusion, in this sector, as we have seen, there is a convergence in union responses to move towards a more collaborative employer relationship. The unions in the UK, Denmark, and Germany have chosen at times to adopt more conflictual responses to ‘encourage’ employers to be more collaborative, while the Italian and Spanish unions have moved away from the more confrontational approach that characterized their broader class projects. However, despite union desires to move towards a more dialogue- and partnership-based approach, there is, in practice, little evidence of employers actively involving unions beyond giving them the information which they receive by right. The Italian respondents, for example, said that, despite the intentions of comanagement written into the 1994 agreement, a significant number of issues, considered by management to be their prerogative, were not discussed with them. Moreover, recent changes in the sector, such as outsourcing and the emergence of direct banking, create an environment which is not conducive to the kind of mutual confidence needed for a partnership relationship. It is therefore not surprising that, apart from the UK, there is a strong desire to retain sectoral bargaining on the part of the unions. The bargaining agenda A number of the observations made in Chapter 2 are relevant to this sector. There has been some moderation of the quantitative bargaining agenda and unions are

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seeking instead to exploit qualitative issues. However, job losses and their impact tend to dominate the agenda at the expense of qualitative issues, such as equal opportunities. The tailoring of the bargaining agenda to fit particular groups of employees (Waddington and Whitston 1996) is evidenced in the banking sector in the emphasis given to bonus and incentive schemes such as performance-related pay (PRP), grading, and individual career development. Pay bargaining will be discussed first, followed by an examination of a number of other key areas: job security, casualization, flexibility, and training. Pay bargaining In times of crisis, pay claims have been moderated to take account of what it was felt the bank could pay. Unions have also been prepared to settle for lower pay in return for other concessions such as, for example, not working on Saturdays (Spain), or agreements on job security (UK and Germany). There is some indication, however, of recent changes in the union approach, in that in the UK and Germany pay is becoming increasingly important again. In the 1998 collective bargaining round, the German unions sought substantial increases to make good low increases in previous years (EIRR 286 1997). Respondents from the UK unions also talked of no longer being prepared to accept moderation, in the absence any longer of any real guarantees of security, and in the light of the large profits which the banks were making. Their approach, therefore, when setting the level of recent pay claims, has been to highlight comparisons between wage levels and bank profitability. Financial incentives or productivity payments are in operation across the sector but tend to vary from one country to another. Some convergence can be seen in the development of the unions’ responses. All the unions have now decided that the best way to deal with this issue is to seek to collaborate with employers in their design and implementation. This is despite a brief period of resistance by BIFU (UK) to any type of involvement and a longer period of resistance by Spanish and Italian unions, who were particularly unhappy with the idea of individualized, differential pay awards. The delay in adopting a more collaborative position weakened the union response, in both Spain and Italy, as employers took advantage of union resistance to develop systems unilaterally and the unions have had problems in getting involved subsequently. Nevertheless, the Italian unions were able to gain more leverage as a result of the 1993 pact and incorporate guidelines relating to criteria for variable pay in the 1994 sectoral agreement. Subsequently, following decisions to increase the percentage of overall pay in this category, further guidelines were included in the February 1998 agreement. In Spain, respondents also stressed their efforts to get more involved in procedures and their role in monitoring implementation. They cited an example of successfully overturning the criteria adopted in one bank after they had mounted a campaign to demonstrate that the objectives which had been set were not achievable. In both Germany and in Spain, respondents spoke of the pressure that they were exerting to ensure wherever

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possible that variable pay was linked to teamworking. This response had been adopted to counteract the growing individualization of workplace relations and also to increase the possibility of including schemes in collective agreements. The most important issue for all the unions, as in the Spanish example referred to above, has been the need to press for maximum transparency in the criteria adopted. In Germany, for example, the ÖTV has been pressing for joint union-employer commissions to fix the criteria for any PRP. Respondents in the UK, Spain, and Italy also spoke of the unions’ efforts to control variable pay by seeking to limit the overall amount of the wage bill which was set aside for this purpose. In the UK, individual performance-related payments are highly developed at all levels. In order to deal with this situation, BIFU has developed a comprehensive series of guidelines. These include: full union involvement, carefully selected and transparent criteria, and, as discussed above, a minimum annual pay increase for all employees. Respondents felt that these guidelines have played a crucial role in slowing down the process of implementation. In addition, they continue to seek to counter employers’ arguments in favour of PRP. The unions are aware of the more recent academic challenges to PRP, and of the fact that some employers are beginning to have doubts about the efficacy of it as a performance incentive. There was, therefore, a feeling that it might be on the wane, and in the meantime the union response, as one representative put it, was that of ‘surviving the worst’. Job security Faced with the growth in job loss and the change in the nature and organization of work as a result of the growth in information technology, job security has become a key issue. The first step for respondents has been to gain as much information as possible from the banks on the overall financial situation and future plans, in order to develop a more strategic view of the situation. In many cases, however, employers have been unwilling to involve the unions fully. In Spain, for example, respondents spoke of very different levels of participation according to the banks concerned. Respondents in other countries spoke of a more generalized pattern, of employers only being willing to divulge information which they were legally obliged to give the unions. A general response has been for the unions to put resources into the development of their data and intelligence, through their own research departments or the departments of their confederations, or by calling in external professional support. In Germany, where the unions have commissioned their own reports on new technology, respondents explained these had been used to develop responses based on the argument that there are limits to the extent that technology can replace employees, if the industry is to remain ‘customer friendly’. In Denmark, respondents also referred to reports commissioned on various aspects of the future development of the sector, whilst in the UK the unions pointed to an increasing involvement of academics in discussions and seminars. These are reported in the inhouse journals, so that the membership is also kept as well informed as possible.

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Some countries (Denmark, UK, Spain) have had to deal with job losses earlier than others (Germany, Italy) but the responses tend to be similar. In the UK, however, where there have been the most extensive losses, responses have been more extensively developed. BIFU, for example, has formed a Job Security Action Committee at national level to provide support and make the case for additional resources for campaigns in particular banks or branches. Experience is shared through the Action Committee with local organizers. There have been numerous attempts to involve ACAS and a considerable shift of resources into legal action by all the unions, with a large increase in the number of cases taken to industrial tribunals. Further action in this area has been taken by BIFU through the Commission for Racial Equality, alleging a case of racial discrimination on the grounds that a higher proportion of employees from an ethnic minority background had been singled out for compulsory redundancy. In all the countries, direct opposition to all job cuts, which was the initial response of the unions, has been modified to a position in which compulsory redundancy is opposed and, where job cuts are necessary, the demand is that they should be voluntary and not ‘traumatic’. The focus has therefore shifted to improving early retirement and voluntary redundancy schemes. A recent and comprehensive initiative in this area is the 1998 national agreement in Italy, for example, which makes provision via a redundancy fund, fondo esuberi, coadministered by the unions, employers, and government representatives, for income support and retraining (EIRR 291 1998). At an early stage, another generalized response was to achieve job security agreements. In the UK, the first such agreement in the large clearing banks was reached between BIFU and Midland Bank in the early 1980s and was followed by agreements in other banks, typically containing provisions for discussions on redeployment, retraining, and voluntary redundancy. Where the banks have wished to include the possibility of compulsory redundancy as part of the agreement, however, BIFU has refused to sign, to avoid any constraints in any ensuing campaigns against compulsory redundancy. In Germany, agreements against technological rationalization have been in force since the early 1980s. Although the first sectoral agreement was primarily defensive (Müller-Jentsch and Sperling 1995), respondents felt that later agreements have provided for much fuller consultation on IT implementation at works council level. In Spain, job security agreements are more limited and have tended to be introduced either in banks in financial crisis or as part of merger talks. Measures typically include agreements for early retirement and voluntary severance, carefully monitored by the unions, using where possible company pension/insurance schemes (fondos de pensión) to ease the financial transition to full retirement. Earlier discussions between employers and unions in Italy focused on similar arrangements, but there were clear rifts between the two sides on the way rationalization should be managed. These now seem to have been largely resolved within the broader terms of the 1998 agreement (see above), after somewhat protracted negotiations.

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More recent discussions with respondents in the UK and Germany tend to consider blanket job security agreements as short term, rather outdated, and not central to job security discussions. Nevertheless, specific elements which were contained in the original agreements continue to be key issues in union-employer negotiations. Apart from a focus on satisfactory financial packages for early retirement and voluntary redundancy, greater emphasis is now being put on redeployment and training (this last issue is discussed further below). In the UK, the focus is on employability, which is seen by respondents as beginning to define the new employment relationship. This would appear to indicate an attempt to move from a defensive to a more proactive policy, lacking in earlier agreements (MüllerJentsch and Sperling 1995). Casualization Linked to job security is the union response to the increasing casualization of the workforce. Across the five countries, the unions are seeking to limit, as far as possible, casual part-time work and new types of contract, and to fill vacancies with employees on permanent contracts. In the UK, a weaker legislative framework has meant that the situation is more difficult for the unions to control. Casualization has also been given increasing legitimacy in Italy and Spain through successive labour market reforms, establishing new types of temporary contract and hence also presenting the unions in these countries with increased problems in this area. However, there are some differences in the approaches followed. Fixed-term contracts, for example, have been very strongly resisted by the German unions and are, as a result, virtually non-existent. They have tended to prefer part-time contracts as an alternative. These are seen as contributing to a redistribution of employment, provided that there is parity of conditions. They are therefore pressing for equal treatment for part-time workers, in particular in respect of career opportunities and financial benefits. In Spain, on the other hand, where legislation provides for most fixed-term contracts to be made permanent after three years, the unions at confederal level have negotiated an effective monitoring system. As a result, the banking unions have put increasing emphasis on making this work. They regularly receive information on all types of contract, and seek to ensure that staff are made permanent on expiration of the permitted temporary period. Steps have also been taken in Spain and Italy, where there has been an expansion of new types of temporary contract (training, apprenticeship, etc.) to ensure, through monitoring, that these are not introduced in situations for which there is no legal provision. Recent Italian legislation allows for more part-time workers. The Banca di Roma Group plans for rationalization, for example, to include a number of incentives to encourage full-time workers to reduce their contract at all grades, including managers (EIRR 291 1998a). Italian respondents spoke of the unions’ intentions to monitor this at both confederal and sectoral level, in order to ensure that strict quotas restrict overall take-up and therefore the impact on the core

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permanent labour force. In the UK, the unions’ response is to make extensive use of European legislation to improve part-timers’ employment security and pension rights. Linked to this area is the debate on shorter working hours. In Germany, the DGB unions continue to press for the shortening of working hours as a way of redistributing employment. In Spain, too, banking unions are involved in a similar campaign, although they acknowledge the problems that there would be in enforcing a reduction in hours, given the large amounts of unofficial overtime worked without appropriate legislative backing. There was some discrepancy between the leadership and other levels of union organization on this issue. The latter were concerned about the difficulty of persuading workers not to do overtime. Flexibility There is also a convergence in the attitude of the unions towards the various types of flexibility, an issue which is currently of major importance on their agenda. In particular, three types of flexibility are significant in the sector: geographical mobility, functional mobility, and greater flexibility in working time. The general approach of the unions is to support greater flexibility, provided that they can see that it is in the interests of all parties and that agreements are satisfactorily worked out. One of the Italian unions had adopted the slogan ‘negotiate for flexibility’ to reinforce this position. In return for greater flexibility, they seek to gain other concessions. In Spain, the unions are focusing on shorter working time, further participation in HRM initiatives, and (as yet unsuccessfully) greater union involvement in the management of their pension funds as a quid pro quo for flexibility (Rodríguez 1996). In particular, in all countries, respondents indicated that where positive financial results for the banks could be seen to follow from flexible negotiations, they were generally supportive, as this was also of benefit to members. Both geographical mobility, within a certain radius of the home branch, and functional mobility are now an established part of most agreements. More recently, the issue highest on the agenda has been working time flexibility, linked to longer opening hours. This has become a key issue as banks seek to compete with other areas of the financial sector, such as the building societies in the UK and the cajas de ahorros in Spain, which now carry out a number of activities previously restricted to the banks and have in many cases already extended their opening hours. The unions have sought to make it voluntary to work unsocial hours and in the UK, for example, they have been able to establish a situation where the employer has to offer separate working contracts for such sessions. In Spain, where the issue has aroused strong feelings amongst workers, both UGT and CC.OO have carried out surveys of total hours worked and remuneration for overtime, in order both to inform the discussions on longer opening hours and to involve employees as closely as possible in what is happening. In Denmark, respondents indicated that flexible working

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hours remains one of the most contentious issues between the union and employers, particularly Saturday working, which is being strongly resisted. Training Training has also grown in importance for the unions and is now seen as one of the ways by which the unions can seek to increase job security, by ensuring employability. It is also seen as an avenue for improving opportunities for career development for members. All the unions are pressing for vocational training in order to ensure that employees are kept up to date and that they have the opportunity to develop new skills. This is partly to ensure that internal redeployment is a viable response to job loss. Respondents in Denmark, for example, spoke in particular of their efforts to use training to address the problem of the number of administrative workers whose jobs are disappearing as a result of technological change. In the UK, training was not only perceived to relate to internal redeployment (although agreements are in force to ensure that this takes place). Respondents were beginning to link training more closely to broader objectives of employability. In this context, training was seen as more widely useful as a means of equipping workers for future careers, both inside and outside the bank. The UK unions were beginning to argue that this was a key issue which should be used as a bargaining counter, in return for union concessions over flexibility. The Spanish unions were able to use the Continuing Training Agreement, an inter-sectoral tripartite agreement first signed in 1992, to support their demands for training. This agreement makes funds available to companies, provided their training plans have been agreed with the unions. In the early stages, employers had tended to participate only minimally in the tripartite agreements, seeing training as their own prerogative. However, respondents indicated some success in encouraging greater take-up by employers. In particular, respondents from CC.OO talked of a special initiative to which they had been able to get employers to agree, for retraining workers over forty. German respondents saw the need for a national sectoral training agreement in order to strengthen workplace agreements. They spoke of the unions’ continuing pressure to get training on to the agenda at sectoral level. In conclusion, in all countries there has been progress in respect of qualitative issues on the bargaining agenda. However, emphasis is once again being put on pay in both the UK and Germany. All the unions are now engaged with variable pay (PRP, bonus payments, etc.), although the emphasis varies between countries as to the incidence of individual and team rewards. The unions are trying to regain lost ground in the bargaining arena over this issue. Having at first opposed involvement, they are now finding it more difficult to gain influence. Items related to job security, casualization, and flexibility occupy a key place on the agenda in all the countries. The unions have sought to include training in these negotiations but other qualitative issues such as equal opportunities (career

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development, career breaks, job sharing, etc.) occupy a very peripheral place. An exception is possibly Denmark, where equal opportunities issues tend to be more central; respondents, for example, referred to the recent claim which includes five days additional leave for all employees with family responsibilities. There are close similarities in the agenda items in the different countries, but the responses adopted are conditioned by a number of variables. For example, the UK unions, for whom exposure to a deregulated economic environment has been longer and more acute, have much more developed responses in relation to job security. The particularities of the national context have also conditioned responses. For example, when considering casualization, differences in labour market legislation have influenced responses. Similarly, the most developed responses in terms of joint union-employer initiatives in training were found in Spain, where an intersectoral tripartite agreement underpins the sectoral initiatives. Political involvement Chapter 2 stresses the importance of political intervention to ensure that, as the focus shifts towards a more decentralized approach, unions continue to retain the capacity for strategic action. The German, Italian, Danish, and Spanish unions had all experienced some degree of political involvement. Danish respondents spoke of involvement in political discussions with the government about the future of the industry. Representatives of the Spanish and Italian unions have been involved in tripartite discussions with the government and employers to establish a number of framework agreements. In Germany, involvement has tended to be at a regional level. What was noticeable, however, was a wariness about direct political contact. In this respect, Danish respondents reported that recent involvements by Finansforbundet in political discussions on the industry’s future have been viewed negatively by some parts of the membership. They also talked about the importance of not being associated too closely with any particular political party. In Germany, DAG and ÖTV spoke of a more distant relationship with the political parties. In particular, ÖTV referred to a change in the relationship between the SPD and DGB unions. This was seen as a welcome ‘normalization’ of union-party relationships. It was expected that this ‘Blairite model’ would pertain in future. In Italy and Spain, also, greater circumspection in relations with political parties was evident. In Italy, in the 1990s, with the decline in importance of the Socialist and Christian Democrat Parties, contacts with these parties are no longer visible. Respondents in Spain referred to a distancing from the political parties which had occurred in the second half of the 1980s. In the case of FEBA, unlike some of the other CC.OO federations where there were tensions as a result of political factions at confederal level, respondents said that the cohesion achieved by their executive was largely as a result of keeping out of current political issues. In the UK, there has traditionally been little political involvement. In BIFU, contacts with the parties have been sustained through the sponsorship of two MPs,

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and, since 1989, two Euro MPs. Even-handedness has been maintained by selecting equal representation from the Conservative and Labour Parties. Recently, political activities have intensified in some of the UK banking unions. Respondents talked of a growing recognition of the importance of having more ‘political clout’ in order to influence political decision making and enlist support when necessary. Whereas the more traditional vehicles for this activity, such as lobbying and questions in Parliament, continue, other initiatives have developed. Recent examples have included the tabling of specific amendments to a Private Parliamentary Bill (Lloyds/TSB merger), and an early-day motion in relation to a dispute, backed by more than one hundred MPs, calling for resolution by ACAS. A further example of a more proactive approach can be seen in UNiFI’s decision to join the TUC, which respondents said had greatly strengthened the political support the union had received in recent conflicts with management. UNiFI also joined with BIFU in the organization of the early-day motion and has established closer relationships with a wider group of MPs. The challenge of all the unions has been to retain (or in the case of the UK banking unions to build up) links which extend their scope for strategic action, whilst at the same time not offending a relatively conservative membership by appearing too overtly political. Notwithstanding this distancing from direct political contact, most unions have been involved indirectly in political activity through umbrella organizations such as the TUC, DGB, and the confederations in the case of the unions in Italy and Spain. This has been a two-way process. On the one hand it has enabled banking unions to become involved in broader issues. For example, the Spanish unions have participated through their representatives at confederal level in negotiations on labour market reform, and BIFU and UNiFI via the TUC in the formulation of a minimum wage. At the same time, banking unions have been able to call on these organizations for political support and expertise in relation to sectoral campaigns. National officials were seen as playing a pivotal role in maintaining these relationships, enabling representatives at enterprise level to concentrate on professional issues of direct and immediate importance to members. In the UK, especially, this was perceived by some respondents at enterprise level, who were unhappy with the growing politicization, to be a particularly important role demarcation. Whilst distancing themselves from formal political contacts, unions felt informal political contacts to be of great importance, particularly to support campaigns. In some cases unions were seeking to widen contacts to include other parties. Both HBV and ÖTV (through the modernization plan), for example, had developed contacts with Bundnis 90 (the Greens). In all countries, indirect contacts are maintained through individual membership of political parties. In Spain, for example, in FeS, respondents spoke of the high percentage of members and representatives who were also members of the Socialist Party. In the UK, BIFU respondents also referred to the use made of informal links with constituency Labour parties and MPs through members’ individual party membership.

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Political activities have in many cases extended further than political parties to the construction of broader political alliances. Reference was made in Germany to alliances with local groups and churches, and in Spain and the UK to the involvement of the local community. In the UK, recent campaigns have sought to involve customers and shareholders as well. Relations with the membership The literature discussed in Chapter 2 emphasizes the need for unions to reexamine their relationship with members and potential members. In this section we consider how the banking unions are responding in this area. Recruitment and organization An increasing focus on issues related to membership was found in all the countries in the study. The emphasis in the UK was on preventing an overall decline in membership as a result of job losses, but lay more on strengthening the participation of the membership at workplace level in Spain, Italy, and Germany. Even in Denmark, despite a very high membership density, respondents mentioned some cause for concern because of a recent slight decline, although this had not led to significant activity. Therefore (with the exception of Denmark), considerably increased efforts and resources are being concentrated on recruitment. In the UK, where job losses and hence the threat to membership are especially acute, responses are particularly developed. All the unions employ personnel exclusively devoted to recruitment (Travelling Recruiters, BIFU; Travelling Representatives, NWSA; Area Recruiters, UNiFI) who are coordinated by national officials. Respondents from both BIFU and UNiFI also referred to their involvement in the TUC’s new initiatives to improve union organization, mentioning in particular the Organizing Academy and measures to encourage greater involvement of young people. Another country where responses were quite developed was Spain. Initiatives were being encouraged by a strong leadership at confederal level in both Spanish unions. At sectoral level, both FeS and FEBA were involved in large membership campaigns, including mailings and personal approaches to potential members. In particular, respondents mentioned their efforts to gain access to the direct banks by way of the parent banks (although it was not proving easy to make progress). In all the countries there was a growing emphasis on the role of the lay representatives and ordinary members in recruitment, and on campaigns which focus on local workplace issues of immediate relevance to employees. In both Spain and the UK, designated officials liaise with local representatives, who are seen as having a key role in recruitment because of their closer understanding of needs and concerns in the workplace. Additionally, incentives to members to recruit colleagues had been introduced in both countries, in the form of small gifts or small financial benefits. In Spain, considerable effort has also gone into dealing with the problem of isolation

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because of the small size of many branches. Lay officials have been designated to liaise with members and potential members, visiting the branches on a regular basis. In Germany, the major recruitment focus is upon enhancing the profile of the unions at works council level. Respondents argued that there appeared to be less willingness on the part of employees to give their support to general, sectoral collective issues, and a corresponding preference instead for involvement in the plant-specific issues which were typically part of the works council agenda. It has been decided, therefore, that efforts must be channelled in this direction. The unions are attempting to increase the number of works councillors who are union members in order to strengthen the union profile in the workplace. They are also giving an increased emphasis to the provision of support and training for councillors, as a way of encouraging greater participation. This is exemplified by the comment from an HBV official (Wever 1994), who attributed the higher membership in Commerzbank, in comparison with two other large banks, to the visibility of the union through its work with Commerzbank councils. In Italy, there are differences among the unions over the relative importance of the union branch and proposals for the RSU (supported primarily by CGIL). Nevertheless, respondents from the different unions talked of the development of a new, more relevant dialogue with employees, based on specific workplace issues, to encourage greater local involvement. They are also placing more emphasis on training lay members to carry out their roles effectively and giving them the necessary skills to provide information and advice to employees, so as to improve communication at workplace level. In Spain, the debate on the relative importance of the workplace branch and the works committee has already taken place, and the unions are now acting on the outcome: that greater importance should be given to the workplace branch. As a result, the unions are placing greater emphasis on the role of the branch in involving members in the formulation of policy for works council representatives and in the provision of formal feedback in order to widen participation. This response has the dual objective of providing opportunities for membership participation and differentiating members sufficiently from non-members so that membership becomes more attractive, hence addressing the problem of the ‘free-rider’. This is one of the key issues in Spain, where non-union members participate in the election of works council delegates and benefit from collective bargaining agreements and therefore sometimes argue that there are no increased benefits to be derived from union membership (see Chapter 3). The extent of progress in this area varied considerably among the banks and was related to the degree of acceptance by the employer of union activity. The unions have had to respond to the increasing individualization of employees and the employment relationship. In Spain and the UK, where there are a large number of employees in banking on individual contracts, special efforts were being made to attract these employees into the union. UK respondents talked of an increased allocation of resources to individual casework and counselling, to support this group. The publicizing of successful solutions to casework, for example positive

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outcomes at industrial tribunals, was seen as particularly important in attracting these employees. In Spain, a more direct approach was employed. Recent surveys on hours worked were used, for example, to make individuals realize that without the protection of a collective agreement, they ran the risk of being exploited. A growing recognition of the need to differentiate according to the requirements of specific groups of workers can be seen in the moves towards a more professionally focused type of unionism, concentrating almost exclusively on issues related to workers in the finance sector. This is exemplified most particularly in Italy and Spain, where the class-based unions, which have traditionally been more politicized, have at sectoral level in banking modified the ideological content of both their discourse and their agenda. The greater stress on professional and immediately relevant workplace issues tended to limit the involvement of the banking unions in membership issues less directly associated with the workplace. Respondents, who were asked about broader socio-economic and ecological issues, indicated that the appropriate level for these to be taken up was at confederal level or, in the case of the UK, by the TUC. The Italian banking unions did give an example of the lead that they have taken in the fight against illegal money lending and money laundering. However, it was only in Germany that respondents mentioned the direct incorporation of broader socioeconomic and ecological issues into policy making and the bargaining agenda. In the public sector, ÖTV’s programme to modernize the public services highlights ecological issues alongside proposals for modernizing working conditions. In the private sector, respondents said that ecological issues such as incentives to employees to use public transport increasingly form part of company agreements but are not included at sectoral level. The emphasis on greater attention to the individual member and a more professional image have been accompanied by greater sophistication in relation to both internal and external communications. Two of the UK unions, for example, have employed external consultants to advise on creating a more professional style both for their in-house communications and relations with the media. In Spain, respondents from FEBA spoke of setting up a web page. FeS also referred to the incorporation of a media specialist on to their staff to ensure professionalism in relation to all contacts with the media. There is some evidence of consideration being given to the importance of organizing non-traditional groups. In the UK, an example can be found in the decision by BIFU to broaden membership to include representation rights for agency staff from the largest provider, Manpower. This response was described as: ‘a strategic decision about where the union would be [focusing]’. Respondents from Germany spoke of special representation and consideration of training needs for young people. In the UK, all the unions have stepped up their campaign to recruit more part-time staff, using the European legislation on part-time pension rights to attract members. Equal opportunities issues are also carefully monitored in all countries in order to ensure that the relevant members’ interests are upheld, although, as mentioned earlier, the need to prioritize other items on the bargaining

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agenda has meant that new initiatives in this area have not tended to be forthcoming. Nevertheless, the main recruitment focus appeared to be more conservative, concentrating on centres where there was already some density and building up all categories of membership in these locations. The UK respondents, emphasizing their focus on ‘in-fill’ rather than greenfield sites, felt that to some extent this policy had been reinforced by reorganization within the banks, which had tended to concentrate large groups of employees in regional processing centres (Gall 1997). Italian and Spanish respondents also spoke of their success in increasing membership (a modest increase in the case of Spain) by a focus on areas of existing strength. Although respondents tended to indicate that financial and other individual services were of limited importance, supporting the findings of Waddington and Whitston (1996) referred to in Chapter 2, in practice, many unions continue to supply them and to be proactive in looking for new services. Individual services to members, for example, have been expanded in the UK and Germany (DAG but not HBV). They are seen as a selling point for some bank staff in the competition for new members. One respondent in the UK felt that the union should continue to give them strong emphasis, as they have a role to play in an increasingly individualized environment, in showing that the union is looking after the individual. It was argued that it was important to be seen not just as an effective trade union but also as an extensive provider of services. In Spain, services in general are not felt to influence recruitment (possibly partly still a reaction to the failure of the housing cooperative PSV), with the exception of legal services and the provision of training. A particularly successful venture is the insurance package run by UNiFI in the UK. The income from this highly competitive service has enabled the union to subsidize membership fees. Other unions have now asked UNiFI to provide the service for them and this has become an important additional source of income for the union. Inter-union relations In a sector which, with the exception of Denmark, has traditionally had a fragmented union structure, there has been a great deal of effort to achieve unity of action. This is a particularly relevant response in Germany and the UK, where interunion rivalry was identified by respondents as a deterrent to potential members. In Germany, greater unity has taken the form of a recruitment demarcation agreement (HBV and DAG), and cooperation agreements requiring the different unions to reach prior agreement on bargaining strategy. The latter initially involved the HBV and ÖTV and, more recently, has been extended to the HBV and DAG. This unity has been achieved despite the ambivalence of some local respondents who found it difficult to work together and referred to problems arising from ‘old wounds’.

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In the UK, although the in-house clearing bank unions have traditionally had a close working relationship amongst themselves, relationships between BIFU and the in-house unions have been problematic and unity has tended to be temporary, in moments of crisis. However, an agreement for joint negotiations between BIFU and UNiFI with Barclays, signed in 1996, signals a new, cooperative approach. In Spain, FEBA and FeS have made a conscious effort to work together in spite of the direct competition in union elections every four years. Again, unity of action was perceived as more problematic by some respondents at workplace level, where inter-union rivalry has been more intensely felt. Rodríguez (1997) also refers to tensions deriving from the different attitudes to change in the two unions, with FEBA more open to proposals for innovation. These differences are partly conditioned by generational differences between the unions at confederal level. In spite of this, pre-agreements on bargaining strategy, for the most part, keep them together. This is not the case in relation to the autonomous union FITC, however. In Italy, respondents from the various banking federations spoke of their efforts to maintain a coordinated response in a sector which is particularly fragmented because of the number of small, autonomous unions. Coordination has enabled them to negotiate comprehensive sectoral framework agreements, but they have more problems in collaborating with the autonomous unions, particularly at workplace level. Respondents from the class-based unions indicated that delays in setting up the new RSU in banking were in part due to a failure to reach agreement with the autonomous unions over the implementation of procedures. A recurring theme in discussion with representatives on inter-union relations was that of merger. As well as contributing to greater unity, mergers were also viewed positively for financial reasons. The financial constraints faced by the unions were emphasized. These were seen as limiting union initiatives such as recruitment in the UK, training representatives in Italy, and implementing new policies more generally in Germany. A number of new mergers are currently being discussed across the sector. In Spain, FeS is already the product of a merger with other service federations from within the UGT, and in FEBA respondents spoke of proposals for a merger with other private sector service federations, as part of an overall restructuring within CC.OO. Perhaps more interesting are the proposals for merger currently in Germany and in the UK as they involve unions which have hitherto manifested a considerable degree of rivalry. In Germany, an alliance has been established of six unions, in which all three banking sector unions are involved, with a view to setting up a comprehensive service sector union. To some extent, the cooperative agreement to share services between HBV and four other DGB unions, Fünf Kleine Tiger (Five Small Tigers), can be seen as a precursor, but the new proposal is for full merger and would create a union larger than IG Metall in size and stretch wider than the DGB unions, to include the DAG as well. In the UK, merger talks are underway between BIFU and UNiFI (where, similarly, inter-union rivalry was experienced in the past), with the possibility of NWSA also becoming involved. This would create a more

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powerful and cohesive force in the large clearing banks, with only one other incompany union remaining in Lloyds Bank. UNiFI’s affiliation to the TUC has paved the way for this cooperation, together with the joint (BIFU/UNiFI) working agreement for negotiations with Barclays. These merger proposals represent a considerable shift in thinking. In addition to financial reasons, respondents referred to the opportunities arising from formally ending divided staff representation (UK), and the possibilities offered by restructuring of providing the necessary local support to underpin decentralization policies (Germany). In conclusion, there was a strong similarity of response to the main membership issues from all countries except Denmark, where high union density and considerable financial resources have resulted in less emphasis on this area. The most developed responses emanated from those countries with the greatest problems in retaining and building up recruitment (Germany, Spain, and the UK). The emphasis in responses lay on improving workplace organization and union profile, by strengthening the role of the union branch or the union role in the works council, on addressing the needs of workers in more individualized or differentiated work situations, on consolidating membership in high density locations, and, not least, on the development of greater inter-union cooperation, if not merger. The latter proposals in both the UK and Germany are of particular significance as they bring together unions which have previously been competitors, illustrating a more strategic response to the crisis affecting the sector. Supranational activity and organization Respondents were generally positive about the concept of trade union cooperation beyond national boundaries, but often did not have very clearly defined ideas about its implementation. There were some anxieties about the cost, however, and concern was expressed both in the UK and Spain by respondents at workplace level that, in the allocation of resources, domestic activities should not suffer. In terms of degree of involvement, there were differences between countries. The German and UK unions were more heavily involved in European-level trade union organizations. In Denmark, the focus is primarily on relations with other northern European countries in the Nordic Banking Union. The Spanish unions have given greater importance to this area recently and this has been marked at national level by an increase in financial resources. In Italy, respondents talked of their relative isolation in the past and recent attempts to ‘make up for lost time’, although these were still at an early stage. Below national level there was a more limited awareness of the nature of the supranational activities in which the unions were engaged. They were largely seen as being the responsibility of national-level officials. A recent response from BIFU, however, has been to seek to involve more lay members in European-level meetings, in order to widen participation.

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In relation to involvement in European organizations, only HBV, DAG, and ÖTV made reference to the ETUC as a channel which they used directly to influence social legislation. Euro-Fiet (the European section of the International Trade Secretariat for Commercial, Clerical, Professional and Technical Employees), on the other hand, was seen by respondents as having a more significant role, partly because of the direct involvement of union officials from banking and also because of the more immediate relevance of the issues. Recent agenda items have focused on issues relating to the implementation of EWCs, the impact of EU enlargement, and the introduction of the Euro. Euro-Fiet also acts as a conduit to Brussels for other common collective issues. BIFU-UK referred to involvement through EuroFiet in discussions with the European Community on issues such as teleworking and union representation in the central banks of the EU. A major recognition issue has also been referred by the UK unions to Euro-Fiet, with a view to it being taken to the European court. FEBA (Spain) referred in particular to the key role that Euro-Fiet has had in highlighting issues around the impact of the single currency. The information provided has been used to support sectoral negotiations in Spain. The German unions saw Euro-Fiet as another important channel to influence the EU on social legislation and a forum for exchanging views on common problems such as the effects of deregulation. There was a growing interest in the role of EWCs. Spanish and UK respondents, in particular, spoke of their involvement. Although initially much of the preparatory work had been confined to a small group of officials, now that a number of EWCs are being set up, wider participation was becoming more of a reality. Training by the unions was mentioned as a response which was being developed in order to increase participants’ effectiveness. Respondents from Spain saw the EWCs as useful in enabling them to gain a broader understanding of working conditions in other countries, so that common causes could be established. Mention was made, however, of the fact that overcoming cultural differences was a time-consuming and costly process. German unions saw the potential for European-wide collective bargaining on some sectoral issues, but were less enthusiastic about EWCs, tending to compare them, less favourably, with enterprise works councils. In Italy, no EWCs had been formed by banks of Italian origin. In some countries, in line with the global ownership of particular banks, unions were seeing the need to extend activities beyond Europe. The Spanish unions were establishing closer relations with their counterparts in Latin America and endeavouring, together with employers, to set up works councils along the lines of the EWCs. In the UK, BIFU was seeking to establish closer relations with unions in Australia and New Zealand within the National Australia Group (NAG). There were a number of examples of less formal international contacts, to which respondents tended to give as much significance as to the institutional arrangements referred to above. ÖTV is active in the public sector European organization EPSU. The Italian unions referred in particular to close contacts with German unions, and the importance of the German model as a reference point. The Spanish unions talked of links with other Mediterranean countries within the EU, with whom they

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felt a strong cultural affinity, and most of the international activities of the Danish union Finansforbundet were focused upon the Nordic Banking Union. In addition, the UK unions also spoke of other ways of strengthening their position at a European level. The role of Euro MPs has been helpful in advising on European procedures and raising issues in the European Parliament. BIFU retains two Euro MPs for such purposes. The European Court is seen as another option for the resolution of disputes, particularly after the ruling on part-time workers’ pension rights. In conclusion, therefore, quite a degree of diversity was found in the responses in this section, partly due to the differing degrees of internationalization of the finance sector in the respective countries. Thus, UK and Spanish respondents had greater involvement in EWC and TNE activities. Diversity was also related to different degrees of national, institutional support: in the case of the UK, recourse to Europe is seen as a means of gaining legal support to compensate for domestic exposure. Also the nature of traditional relationships, some of which are ideologically based and have been in force for some time, continues to shape activity at a European level. Conclusions The economic situation in the banking sector, and, in particular, the deregulation process, has created an environment in which it has become increasingly more complex and more problematic for the unions to operate. In particular, greater competition and the introduction of new technology into all areas of business products and processes have faced the unions with a steady contraction and restructuring of the labour market, and increasing pressures to adopt more flexibility. Our examination of union responses, focusing on the areas discussed in Chapter 2, has indicated a number of similarities which could be considered to reflect convergence. Examples include the efforts to develop dialogue-based relationships with the employer, strong pressures to continue with the national sectoral bargaining arrangements (except in the UK), a focus on professional as opposed to political unionism, a greater emphasis on recruitment, on strengthening workplace participation, and closer interunion cooperation. Nevertheless, the nature of the union response has varied in accordance with the institutional and cultural context within which the unions are operating. There have also been variations related to the degree of exposure to change in the economic environment, with more developed responses in the more exposed sectors. In the UK, which is highly exposed, job losses have been greatest and the responses have been more developed and more wide ranging: for example, the focus is not just on saving jobs but on the wider issue of ensuring employability. In the case of inter-union cooperation, more radical approaches are to be seen in the UK and in Germany (also exposed), where, in addition, the fragmentation of the unions has resulted in a much weaker position than in the industrial sectors. In both

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countries the unions have been involved in rethinking relationships with hitherto rival unions, to strengthen their bargaining position and to encourage potential members. In the case of Spain, exposure to deregulation has been comparatively high, but the institutional and legal support which the unions enjoy has slowed down the impact. Examples of developed responses are the separate negotiating fora for different types of flexibility, the implementation of the decision to use the workplace branch as the focal point for member participation as opposed to the works committee, and the development of a procedure to ensure regular contact is maintained with members in the large number of very small sub-branches. However, at the same time there is a need to develop more effective responses to counteract the steady increase in the number of employees on individual contracts and hence outside the collective bargaining framework. In Italy, which has so far been less exposed, and Denmark, where strong institutional support has acted as a counterweight, the unions have felt themselves under less overall pressure and responses have tended to be targeted more specifically, and successfully, at a smaller number of issues. In Italy, for example, there is a greater concentration on the detail of the collective bargaining arrangements and on the development of initiatives to increase workplace participation. In Denmark, the recovery of co-management has been a key issue. Notes 1 The authors would like to thank David Green and Geraldine Reardon for their comments on sections of earlier drafts of this chapter and Robert Watkins for help with the compilation of some of the tables. 2 For a fuller discussion see in particular Cressey 1992, Cressey and Scott 1992, MüllerJentsch and Sperling 1995, Storey 1995, and Reardon 1996. 3 See, for example, Anderson 1995, 1997, Cressey and Scott 1992, Müller-Jentsch and Sperling 1995, Storey 1995, Gall 1997, and Thornley et al. 1997. 4 Istituto Ricerche Economiche e Sociali (IRES), based on data provided by FIBACISL, May 1996. 5 IRES, based on data provided by FIBA-CISL, May 1996. 6 BIFU membership statistics, October 1996. 7 Gall takes Blackburn’s definition of a: ‘wholehearted trade union, identifying with the labour movement and willing to use all the powers of the movement’ (Blackburn 1967: 18).

7 Central government administration Rosario Morillo Balado

Introduction The central government administration sector provides essential public services. In recent years it has been operating under significant budgetary constraints, with governments needing to balance the pressure for cost savings with the demand for quality services. It is expected that government should act as a model employer, providing an example for the private sector, although for some observers the government should imitate more the working practices of the private sector, including less job security, while for others, the traditional exchange between job security and low pay should be continued. It is by no means obvious how unions should respond in a sector that is relatively protected from globalization and in which they enjoy high levels of membership. The chapter focuses upon union responses in central government administration in Britain, Germany, Italy, and Spain.1 It will always refer to the locus of the study as central administration, although, in the case of Germany, the regional government level is included, because at this level activities are carried out which are found in central administration in the other countries. The study is confined to central departments, ministries, and other agencies of central administration. Parliament, the armed forces, the police, tribunals, health, education, postal services, railways, and other public companies have been excluded because they tend to be subject to specific regulations in each country. Industrial civil servants in Britain have not been included, being atypical of the workers in central administration in other countries and being organized by mainly non-civil service unions (usually unions organizing similar occupations in other industries). A number of features of the labour force merit comment. Women represent a high proportion of the labour force but, as in other employment sectors, they are concentrated in the lower-paid grades. Two types of employment status are found in Germany and Spain in central administration: on the one hand there is the traditional tenured civil servant whose conditions of employment are subject to special regulation of Parliament, and on the other there are significant groups of employees on more conventional contracts, subject to the employment legislation applicable in

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the private sector. In Germany, the labour force is divided relatively equally between these two groups. In Spain, 65 per cent of the labour force have civil servant status. The first two sections of the chapter consider the economic and industrial relations contexts within which the trade unions are operating. There then follows a discussion of trade union responses. The economic environment of the sector The extent of convergence in public management There has been an ongoing debate about the role and activities of central government in OECD countries since the beginning of the 1980s. It has been argued that governments face economic and social pressures that require changes in the way central administration operates. The ageing of the population and demands for higher quality services point towards the maintenance and improvement of public services. However, at the same time, governments have been under pressure to control public deficits and national debt, particularly in the case of those countries involved in Economic and Monetary Union. There is some debate as to what degree such pressures have produced similar responses from governments. Underlying this debate lies some ambiguity about the concept of public sector reform: ‘is each and every change of the public sector a reform?’ (Lane 1994:517). Hood suggests using the concept ‘new public management’ as shorthand for a ‘group of administrative doctrines that figured prominently in the agenda of bureaucratic reform in several OECD countries beginning in the late 1970s’ (1996:268). For Hood, ‘new public management’ involves advocating change in some of the following seven areas: hands-on professional management; explicit standards and measures of performance; greater emphasis on output controls; disaggregation of units; greater competition; stress on private sector styles of management; stress on greater discipline in resource use. There are few systematic cross-national comparisons of public administration. Researchers often use the country reports submitted by government representatives to the OECD’s survey of developments in public management, which focuses mainly on central administration. Hood suggests considering the reports as a ‘rough indication of the officially perceived agenda of public management change in the 1980s’ (1996:272). He ranks countries as high, medium, or low in respect of their adoption of the ‘new public management’ agenda. The UK, Australia, New Zealand, and Canada are ranked high; Italy, France, the US, and Denmark, medium; Japan, Greece, Spain, and Germany, low. Doubts exist about whether the OECD survey presents a reliable picture of what is happening. Although the survey suggests a convergence of views and actions towards a managerial approach which is seen as the best way to modernize central administration, the questionnaire that national correspondents have to answer mainly looks for elements of ‘managerialism’ in each country and tends to ignore

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reforms which are outside that approach (Flynn and Strehl 1996). In addition, the official reports and rhetoric may not reflect the degree of implementation (ibid.). Thus, in reviewing changes in public sector management across seven European countries, Flynn and Strehl conclude that there is no convergence in public service management or in the responses to the pressures which governments face. Many variables affect the design and implementation of reforms, including ‘the constitutional arrangements in place, political opinions at national and subnational level, public attitudes towards the state and its employees, and the skills and knowledge of public sector managers’ (ibid.: 4). The coexistence of contradictory approaches within the same country has been commented upon. Some reform proposals in relation to US federal government focus on cost cutting and a reduction of activities through privatization and subcontracting. Others focus on developing the effective contribution of employees to continuous improvements in operations, following the recommendations of the 1993 National Performance Review. Doeringer et al. (1996) argue that the failure to develop workplace practices based on high performance has not originated in bureaucratic inertia or lack of market incentives, but in the strongly held prerogatives of federal sector management and the limited scope for employee involvement. A discussion of recent trends in German and Dutch local administration argues that ‘trusting the front-line staff, and allowing them a lot more say in designing, and controlling their work’ are the key to avoiding failures in delivering high-quality and low-cost services (Martin 1997). Decentralizing responsibilities In the UK, the 1982 Financial Management Initiative was the first step in the delegation of financial and personnel management to line managers. The division of departments into executive agencies from 1988 reinforced the delegation of managerial responsibilities. After slow progress during the first two years, with only ten agencies established by the end of 1989, the number of agencies and their coverage accelerated from 1990. More than one hundred agencies now employ around 70 per cent of all civil servants. The size varies. Ten agencies have fewer than one hundred employees, whereas the Benefits Agency and the Inland Revenue each employ more than 60,000 staff and the Employment Service more than 40,000. Executive agencies carry out the delivery of services with central departments concentrating on policy making. In practice, departments often do not want to give up control over service delivery (Flynn and Strehl 1996). Agencies and departments have separate structures and budgets with ministers setting annually the budget and expected performance for each agency. Each agency head, the chief executive, is accountable to a minister for the performance of the agency, and their pay is linked to the performance of the agency. Chief executives are normally recruited on fixedterm contracts through open competition. They have progressively assumed responsibility for more and more personnel decisions including the recruitment of

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all staff below senior level. They can also decide which union to recognize and how to implement equal opportunity policies. The main reform in central administration in Italy was a result of legislation enacted in 1992–93 and 1998 which gave managers greater autonomy from political bodies. Managers are now directly responsible for policy implementation and results, with policy objectives being defined by political bodies. The legislation requires the establishment of mechanisms to control managerial results. Management appointments last for a five-year term, which is renewable, and some managers are recruited from the private sector (EIRR 290 1998b). Some of the proposals being discussed in Germany and Spain resemble those implemented in the UK, but governments in those countries have not yet adopted such reforms to any great degree. However, other important changes in the structure of central government have been introduced. A process of territorial decentralization has been taking place in Spain since the 1980s, with the establishment of regional governments in the seventeen autonomous communities. This has meant the transfer of significant resources and responsibilities from central administration to the autonomous communities. Central administration in eastern Germany has gone through a period of profound change as it has had to take on many new functions as a result of unification and its integration into the West German administrative system (Klages and Löffler 1996). Reducing labour costs In all the countries studied there have been efforts to limit employment and restrain pay in central administration, while in the UK there has been a consistent policy of transferring into the private sector activities previously carried out by central administration. Pay restraint has been achieved through a variety of mechanisms. The Spanish government in 1993, 1994, and 1997 ignored previous agreements with the unions and implemented pay increases below the anticipated rate of inflation. The wage escalator mechanism in Italy was abolished in 1992 following agreement with the unions. The UK government imposed in 1993 a 1.5 per cent ceiling on pay increases and, from 1994, the overall pay bill has been frozen and pay increases have had to be financed by operational savings and reductions in staff. Limits to employment levels have been achieved via a number of methods. In Italy, recruitment was frozen in 1992 and 1997, an approach which has also been adopted by the Spanish government since 1993. Both these countries in recent years have also disestablished a significant proportion of vacant posts. In Germany, a target of reducing employment by 1 to 1.5 per cent each year has been established in order to reduce the number of personnel to pre-unification levels (OECD 1997). In both Spain and Italy, recent changes in legislation have made it easier to dismiss employees in central administration, although until now no great use has been made of this option. Procedures have been introduced in both countries to enable redundant staff to be redeployed between departments after negotiation with the

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relevant trade unions. In Italy, there is also provision for negotiating reductions in working time to prevent redundancies (EIRR 290 1998b). In the UK, the White Paper Continuity and Change set a target in 1994 of reducing significantly the number of civil servants over the next four years. The government expected to achieve the reduction by not replacing staff as they left or retired, although it recognized that some redundancies were unavoidable. The Inland Revenue announced in 1995 that it was going to shed 6,000 jobs by 1998 (FDA 1995). The use of privatization or subcontracting usually means a reduction in public employment as well as often a deterioration in employment conditions of the workers involved, with poorer pay and benefits and less legislative protection, especially for the lower grades (Armstrong and Cornish 1997). Central governments in Germany and Spain have used subcontracting for activities requiring specific technical expertise such as data processing, and for unskilled or semi-skilled work such as cleaning services, catering, and security. Agencies in the UK have to review what they do every five years (it was originally three years), considering whether activities should be continued and, if so, how. The review process can decide either to retain an activity in-house, automatically contract it out, or subject it to market testing (IPMS 1992). Between December 1992 and December 1994, eight civil service organizations were privatized leading to the loss of 5,000 civil service posts (White Paper, Taking Forward Continuity and Change 1995). At least eight more agencies have been privatized since then.2 Under market testing, the activities are put out to tender and usually internal and external bids are considered. Thus, civil service staff are sometimes given the chance to bid to carry out the activity. Under automatic contracting out, the contract goes directly to the private sector without civil servants having the possibility of competing for their own jobs. Market testing and privatization normally result in the loss of civil service posts even when the internal teams win the contract. The 1992-93 market testing programme achieved a reduction of 12,200 posts as a result of contracting out and privatizing activities. Where civil service teams were awarded the work, posts were reduced by 1,700 (The Citizen’s Charter 1994). The programme affected a wide range of areas and grades: from professional and specialist services to executive and clerical operations. Not surprisingly, employment levels for central administration in the countries studied indicate similar tendencies towards stagnation or decline, as can be seen in Table 7.1. OECD data demonstrates a similar evolution of employment in central administration (OECD 1995). Conclusion The discussion of the economic environment of central administration has noted that the desire to limit employment and pay exists in all the countries studied. However, the transfer of jobs to the private sector and the volume of redundancies have been significantly greater in the UK than in the other countries. The UK

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Table 7.1 Employment trends1

1 The areas and groups mentioned in the introduction are excluded. 2 The statistics do not include staff with a fixed-term contract of less than six months of duration. Source: Ministerio para las Administraciones Públicas 1995. 3 Public employees in the ex DDR are not included. Including them, the figure increases to 393,381 (93,692 at federal level and 299,689 at Land level) in 1992. Source: Figures provided by the Institute for Applied Economic Research, Germany. 4 The statistics do not include civil servants employed for less than a year nor the employees in Northern Ireland. Part-time staff are counted as a half unit. Source: Annual Abstracts of Statistics 1994; Civil Service Statistics 1994, 1995. 5 Source: OECD 1995a. 6 Change between 1990 and the latest year available.

experience emphasizes the important influence of ideological considerations about the role of the state on the introduction of reforms. It also emphasizes that administrative reforms are affected by the national contexts in which they take place. We have also noted efforts to redefine and clarify the roles and responsibilities of managers which have had implications for their recruitment and tenure, particularly in Italy and the UK. The industrial relations context This section seeks, first, to review trade union structure in the four countries studied. This is followed by a discussion of union representativeness as measured by union density and the results of works council elections, and then by a consideration of pay determination systems in central administration. Finally, there is a summary of the main problems faced by unions in the sector. Trade union structure and organization The structure and organization of the trade unions in central administration varies considerably in the four countries studied. Table 7.2 summarizes the principal unions established in the sector.

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Table 7.2 Principal trade unions in central administraion

* Figures for ÖTV and DBB include other levels of public administration and other areas of public sector.

Chapter 3 noted that in those countries where all-embracing sectoral federations or unions predominate (Germany, Italy, and Spain), it is common to find other unions organizing white collar and professional employees outside the principal union organizations. DAG and DBB in Germany and CSIF in Spain fit into this pattern. DAG organizes white collar employees in both the public and private sector, but public administration is one of its principal areas of strength (providing 30 per cent of its members). DBB and CSIF mainly coordinate various professional associations of civil servants. The main civil service unions in Britain have traditionally represented specific occupational grades across the civil service, although mergers have produced more inclusive organizations and reduced the number of unions from five in 1995 to three in 1998. PCS was formed in 1998 from the merger of the CPSA and the PTC. The majority of CPSA’s members were administrative officers, administrative assistants, and secretaries. PTC was formed in 1996 by the merger of the NUCPS

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and the IRSF. IRSF represented clerical, secretarial, and middle-management grades in the Inland Revenue. NUCPS was created in 1988 from the merger of the SCPS, representing middle grades in the civil service, and the CSU, representing mainly ancillary grades. The federations of public administration of the DGB in Germany, and CC.OO and the UGT in Spain are involved in mergers with other public sector federations. Such mergers are changing the character of the confederations in those countries, as they become dominated by public sector federations. FSAP-CC.OO, for example, which represents public administration workers in Spain, has agreed to merge with the federations of teachers and health workers. The new public sector federation will be the largest in CC.OO and, symbolically, will displace the metalworkers’ union from that position. Also in Spain, FSP-UGT, which organizes employees from public administration, health, and postal services, is going to merge with the federation of teachers. FSP is already the biggest federation of the UGT. ÖTV in Germany, which organizes workers from public administration, the health service, and transport, has agreed to merge with the DAG, the banking and insurance union, the postal workers’ union, the union for the media industry, and the union of teachers and care workers, with the intention of strengthening union organization and collective bargaining across the whole of the service sector. Out of this merger, proposed by the DGB, two service sector unions would emerge, a private and a public sector union. The proposal would involve the division of the largest union, ÖTV, and of the smaller unions in the group. Most national unions or federations belong to the European Federation of Public Sector Unions (EPSU) which was founded in 1978 and is affiliated to the European Trade Union Confederation (ETUC). The EPSU groups together 150 European public sector unions from the EU and EFTA countries, Central and Eastern Europe, as well as Switzerland, Malta, Cyprus, and Turkey. Representing around ten million members, the EPSU is the largest sectoral federation in the ETUC (FischbachPyttel 1997). Another confederation since the early 1990s has competed with ETUC and the EPSU: the European Confederation of Independent Trade Unions (CESI) (Keller and Henneberger 1997). The CESI is an association of sixteen trade unions or professional organizations from the private, semi-state, and public sectors. CESI’s main objective is to be accepted as a partner in social dialogue at European level (ibid.). Civil servants are the most important group represented by the CESI (ibid.). The DBB in Germany was one of its founding members, and CSIF from Spain is also an important member. The decision of both organizations to seek to extend their membership to workers in central administration with conventional contracts owes something to their common membership of the CESI. CSIF is also trying to expand in the private sector of employment after merging in 1991 with a private sector confederation of independent unions. The erosion of occupational and sectoral divisions in its affiliated unions is likely to enhance CESI’s chances of being recognized at European level. This examination of union structure has established that the division between allembracing industrial federations/unions and more professionally oriented unions

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found at national level in the sector, is also reflected at European level. Unions organizing specific occupational and professional groups (DBB and CSIF) are extending their representation to other groups and thus becoming more like industrial federations/unions, whereas the latter are merging to form larger federations of public sector workers. Union representativeness In three of the four countries studied, works council elections provide a basis for union representation, the exception being the UK. In Spain, works council elections are the prime mechanism for determining which unions can take part in collective bargaining, while in Italy legislation approved in 1997 provides for both union membership and the results of works council elections to be taken into account in determining bargaining agents. The ÖTV typically wins 90 per cent of the seats in the German works council elections. The two main Spanish federations obtained 64 per cent of the delegates in the last elections, with CSIF obtaining 21 per cent. Two other unions, the CIG in Galicia and ELA-STV in the Basque Country, achieved 15 per cent of the delegates in their own regions, which allows them to participate in national collective bargaining. The three main Italian federations won 98 per cent of the votes and delegates in the elections held between 1994 and 1996, which took place according to the new rules of the 1993 Tripartite Agreement. The independent unions played a limited role in these elections as they refused to accept the rules which regulated them. In the elections held in 1988 they had obtained between 20 and 25 per cent of the votes. The union density for central administration in each country is shown in Table 7.3. With the exception of the data provided by the Cabinet Office in the UK, all figures are based upon union estimates. The Cabinet Office calculates union density according to the data supplied by the check-off system, but, as the checkoff system is not the only method of collecting union subscriptions, the UK figure is likely to underestimate density. The density estimates of the unions in the UK vary considerably according to the union, the department, and the occupational group. Table 7.3 reveals a significantly higher level of unionization in central administration compared with the economy as a whole. The large number of staff employed, the often large size of employment unit, and the relatively stable nature of employment, are considered to have benefited the development of union organization in the public services (Marsden 1994). Other explanations put forward include the trade union affiliation of senior managers, the bureaucratization of employment relations, and the promotion of collective bargaining by governments (Hyman 1994a). Recent evidence from the UK and the US indicates that the more favourable attitudes of public sector managers towards the role of unions are a particularly important reason for the existence of higher rates of unionization in the public sector (Freeman 1996; Gallie 1996). In the UK, it has been suggested that agency chief executives coming from the private sector would show less

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Table 7.3 Union density in central administration

Notes 1 Figures correspond to central administration, according to the definition used for the study, with the exception of Germany where they cover local administration and other areas of the public sector such as railways and postal services. 2 1993. 3 1997. 4 1995. 5 Source: Waddington et al. 1996.

understanding of and sympathy with traditional patterns of industrial relations than chief executives coming from the civil service (Corby 1993). The prospects for further significant gains in membership in central administration appear limited for most unions in Germany, Italy, and the UK, given the relatively high rates of unionization which already exist in those countries. In addition, membership has been affected by the reduction or, at best, stability in employment levels. In the UK, membership levels have declined in recent years in all the civil service unions; in the cases of PCS and IPMS, the decreases have been a result of workforce reductions. Although, with the decentralization of collective bargaining, membership increased in some agencies/units, this did not compensate for declines in other areas as a result of cuts in staffing levels. In Germany, the ÖTV and DAG have lost members, but the DBB has been able to maintain its membership. The ÖTV has lost thousands of members in the East since the beginning of reunification, largely because of job cuts in the sector. The DBB is seeking to compensate for the relatively small increase in civil servants in the new federal states, and the absence of growth in the sector in the West, by stronger recruitment efforts amongst workers on conventional contracts. Italian respondents emphasize that there has been no decline in membership, but stagnation because of the lack of employment growth. In Spain, the situation is somewhat different. During the 1990s, there have been membership increases in both CSIF and FSAPCC.OO. In the case of FSAP-CC.OO, this growth has been related to the increase in union credibility as a result of the establishment of national framework agreements which have widened the scope of collective bargaining.

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This discussion of union representativeness has established that union density in central administration is higher than in the economy as a whole in the countries studied and that, in the three countries where there are works council elections, the federations or unions of the main confederations tend to dominate these elections. It has also been suggested that the prospects for membership gains are not good, with the possible exception of Spain where the relatively high number of nonmembers may give more scope for recruitment advances. Collective bargaining coverage Some groups of employees in central administration do not enjoy collective bargaining rights. This is the case in respect of the top five grades of the British civil service, some senior Spanish civil servants, and, importantly, German civil servants as a whole (who also lack the right to strike). The German unions, however, consider that civil servants do have a ‘quasi system’ of collective bargaining. A summary of the pay determination systems and of recent developments in this area in each country appears in Table 7.4. Basic pay increases in Germany, Italy, and Spain are normally negotiated or fixed at national level, thus allowing governments to exercise maximum control and relate increases to national economic priorities. Thus, in Spain, the setting of the national budget can over-rule any previous pay agreements. In the UK, although national pay bargaining was abolished in 1996, in practice the Treasury sets a ceiling on pay increases every year. In Italy and Spain, decentralized bargaining takes place on productivity payments at departmental and agency level. In Italy, other topics negotiated at this level include the introduction of new technology and its impact on work organization, equal opportunities, environmental issues, health and safety, the distribution of working time, and the implementation of occupational classification systems. In Spain, a range of issues negotiated at national level can be further addressed and supplemented at departmental level while the terms and conditions of workers on conventional contracts, who form approximately one-third of the labour force in the sector, are determined by collective bargaining at departmental level. In the UK, agencies and departments have been able to operate their own pay and grading system since 1994–6. Although the requirement for Treasury approval has introduced a degree of homogeneity in pay and grading structures, the new system still represents a departure from the concept of a unified civil service. It also makes it more difficult to implement and monitor the principle of equal pay for work of equal value, as pay structures become less transparent (Rubery and Fagan 1995). Since the late 1980s, a proportion of the annual pay increase of UK civil servants has depended upon the management assessment of individual performance. Until 1993, individual performance-related schemes were regulated by national agreements. However, since 1994–96, the various agencies and departments have had different performance-related pay schemes and the performance-related increases have almost completely replaced increments linked to the cost of living.

Table 7.4 Pay determination systems in central administration (Germany, Italy, Spain, and UK)

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CENTRAL GOVERNMENT ADMINISTRATION 193

Recent evidence suggests that the decentralization of pay bargaining and individualization of pay have led to an increase in earnings dispersion (Elliott and Bender 1997). We can therefore see that the collective bargaining process for employees in central administration has often been complex, with governments tending to want to have the last word regarding pay increases and, on occasion, being ambivalent about the bargaining process itself. We have also noted a trend towards decentralization, particularly in Italy and the UK, the difference between them being that in Italy, the national agreement and a common grading system provide a strong framework for decentralized negotiations. Summary of the problems faced by the unions in central administration Their common economic environment has created similar problems for the trade unions in relation to pay and employment. All unions are, first, concerned about public sector pay and the way in which it is falling behind the private sector. Spanish unions complain that the government uses public sector pay to provide an example of austerity to the rest of the economy. Unlike in Germany, where pay in public administration normally follows the pattern set by IG Metall in engineering, in Spain, pay discussions in public administration normally take place before those in the private sector. A priority of the German unions is the harmonization of conditions in the East and West (EIRR 290 1998a). In Italy, the unions object to the lack of financial autonomy of the agency that has the role of dealing with industrial relations for the government at national level, while in the UK, there is concern about the way staff reductions are being used to fund pay increases (IDS 753 1998). An additional problem in the UK is the government’s use of performance-related pay to reconcile two seemingly contradictory objectives: improving public sector performance and services at the same time as limiting wage increases. The German Interior Ministry also proposed in 1995 to introduce performance-based bonuses that would be financed out of current salary costs. The shrinkage of employment is a second concern of the unions in all countries. The problem continues to be more acute in the UK where the new Labour government has committed itself to the same budget limits adopted by the previous administration. Third, unions are also experiencing difficulties with recognition and their real power to negotiate. Unions in the UK find it difficult to get recognition in newly privatized and contracted-out areas, although rumours about de-recognizing particular unions in some bargaining units of the civil service ended with the new government. Spanish unions are seeking guarantees from the government on the respecting of agreements reached, especially with respect to salary revision clauses. The German ÖTV is pressing for the recognition of bargaining rights for civil servants and for all new entrants to be given a contract falling within the scope of conventional labour legislation and collective bargaining. In Italy, there is concern

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about the resistance of local managers to becoming involved in decentralized bargaining. Unions attribute the opposition partly to management inexperience in dealing with local negotiations, and partly to the scarcity of financial resources available for decentralized bargaining. In conclusion, the unions face similar problems in relation to pay and employment. However, the situation in the UK is clearly the most complex. There, the employment situation has been made more difficult by the volume of redundancies and transfers to the private sector. In addition, unions in the UK are experiencing major problems in maintaining recognition in those areas of work transferred to the private sector. In all countries the difficulties of achieving full bargaining rights in central administration affect the credibility of the unions among their membership. It is difficult to recruit or even retain members when union activity is dominated by the struggle to maintain the status quo, or when governments ignore the outcomes of collective bargaining. Trade union responses We now move on to consider the responses of the unions in central administration to problems they face and seek to relate these responses to the approaches discussed in earlier chapters. The employer relationship The literature reviewed in Chapters 1 and 2 highlighted a need for unions to respond to the shift towards the level of the workplace as the focus of much industrial relations activity and for union relationships with employers to become, in general, more cooperative and pragmatic with a ‘productivist’ orientation, an indicator of this transformation being the restricted use of industrial action. Unions in all countries accept the inevitability of a decentralization of collective bargaining. National agreements provide a framework for decentralization in Germany, Spain, and Italy. Respondents in these countries view the decentralization of collective bargaining as an opportunity to improve upon national agreements, to adapt them to local characteristics and to involve employees more directly in the bargaining process. Respondents from the ÖTV in Germany are very positive about decentralization, believing that only at local level does there exist the possibility of making real advances, although only then with the authorization of higher levels within the service. The union is seeking to negotiate a framework agreement at national level for the introduction of a performance-related component into employees’ salaries, which would leave scope for further negotiation at regional or local level. The Italian unions are asking for more decision making over resource allocation and responsibilities to be shifted to local level. In this context, they are proposing joint training for managers and union representatives in decentralized bargaining procedures in order to develop a common perspective on the new approach. As in

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the German case, the Spanish unions are seeking to establish framework agreements at national level in areas such as career progression and pay allowances, which can then be supplemented by more local-level bargaining. They also are pressing for the establishment of centralized bargaining for employees on conventional contracts in order to introduce more standardization of their working conditions across ministries, and enable transfers between departments through the establishment of a common classification system. UK respondents consider decentralization as inevitable, and there is no concerted campaign among the unions to return to the previous model of national bargaining. It is not considered feasible. There are, however, expectations that some degree of centralization may be possible in the future. An option suggested by some national respondents was the negotiation of a national framework for pay and grading with flexibility over its implementation at local level. UK respondents consider that both advantages and disadvantages have come from the experience of decentralization in the British civil service. The advantages include the possibility of tailoring pay and grading systems to the peculiarities of each bargaining unit, and the achievement of improvements in some working conditions, such as holidays, which would not have been possible in central negotiations. Decentralization has also brought an increased interest among members and nonmembers in union activity. However, an important disadvantage of decentralization is the difficulty the unions find nationally in monitoring pay increases, because of the variation in grades between bargaining units. Although national officials have more or less abandoned the attempt to coordinate bargaining tightly from the centre, they try to ensure information is exchanged between bargaining units and provide guidelines on how representatives should approach negotiations each year. In addition, decentralization is seen as undermining important principles such as fairness, comparability, pay progression, and the need for cost of living-related increases. Decentralization has also meant major new costs for the unions as they have had to create new regional structures and train representatives to cover more than a hundred bargaining units spread throughout the country. This has been a particularly heavy burden for the smaller unions. There was important evidence in the responses of a recognition of the need for a pragmatic and cooperative approach to the employer to be adopted. It was recognized that, because the employer in central administration (i.e. the government) has the power to legislate and directly influence the industrial relations system in the sector, it was important to ensure the legislative support of the government for union activity and collective bargaining. This in turn entailed a degree of cooperation and trade-off. Thus the Spanish framework agreement of 1994 widened the scope of bargaining, but also involved a commitment by the unions to relate pay increases to the economic cycle and the situation of the country. In the German, Italian, and Spanish responses there was a degree of recognition of the fiscal constraints faced by governments and of the need to provide high-quality and low-cost services.

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However, there are interesting differences in emphasis in respect of the process of collaboration seen as appropriate. The German unions sought participation in strategic discussions about the future of the public services and emphasized that, for reforms to be successful, the support of unions and the involvement of employees are essential. The ÖTV argued that, if public services are to be maintained, employees must be pragmatic and help the government to make the necessary savings, but at the same time put forward innovative ideas on how this can be achieved without affecting the quality of services or employment levels in the sector. Thus, the union is supporting pilot projects in selected departments in which new forms of cooperation between employer and employees are being tested. The German respondents were interested in sponsoring models of co-management in the service. In Italy and Spain, the emphasis tended to be more on using conventional collective bargaining mechanisms to resolve problems. Italian respondents stressed the importance of developing bargaining on work organization in order to improve office organization and staff motivation. In both Italy and Spain, the unions were party to national agreements which emphasized the need to improve working conditions and professional development with the aim of increasing and maintaining the effectiveness and efficiency of services. In the UK, few opportunities had existed for the unions to cooperate at national level with the previous administration, although, at local level, difficulties with government policies may, in some cases, have brought management, unions, and employees closer together as they all felt themselves to be victims of the government policies. The experience of market testing illustrates the problems all have had to confront at local level. Departments were under considerable pressure to produce a market testing programme, especially up to 1994. Since then, there appears to have been more freedom to look at alternatives. All unions have encouraged their members to become involved in in-house bids in order to ensure that terms and conditions are maintained and staff reductions are minimized. However, the need to win the contract limits the possibility of protecting existing working conditions. Sometimes, in this situation, the staff themselves propose a deterioration in working conditions by, for example, introducing temporary contracts to reduce costs. With the new Labour government, the unions are seeking a formula to reduce the impact of market testing. The approach of the new government is seen as less dogmatic and more consensus based, and the unions are entering into partnership arrangements with preferred private sector employers, whereby some work is kept in-house and some is done in the private sector. The public sector is often characterized as being strike-prone. Shalev (1992) finds that in nine of the sixteen OECD countries studied the share of public services in the total volume of strikes increased in the 1980s. Shalev also notes that individual public sector strikes tend to occur on a large scale and therefore tend to make an important contribution to the total volume of strike activity in the year of their occurrence. For example, a strike by British civil servants over market testing, privatization, and cuts in the service accounted for 42 per cent of all workers on strike and 25 per cent of all strike days lost in 1993 (Beaumont 1996). However,

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despite the strike-prone image of the public sector, the official union policy in the countries studied tends to be that strikes are very much a last option. Unions are using other tactics to exercise pressure on governments, with an emphasis on seeking to influence public opinion. In Spain, there has been recent emphasis upon establishing effective procedures for resolving disputes. There are exceptions to this overall approach. In Italy, the traditional search for consensus and the desire of the main federations to avoid industrial action is in contrast to the importance given to strike action by the independent, autonomous unions such as the powerful managers’ organization, Dirstat-Confedir. For some observers, there is a clear relationship. The espousal of militancy by the independent unions is a way of establishing a distinctive credibility. In addition, in certain UK and Spanish ministry departments where left-wing factions dominate, union representatives also favour a more frequent use of work stoppages. However, in general, respondents emphasize that strikes are only worthwhile in those relatively rare situations where the union is confident that its demands will be met. The Spanish unions find it particularly difficult simultaneously to mobilize conventional contract workers and civil servants, given their different working conditions. In the UK, legal restrictions have reduced the amount and the duration of industrial action in the civil service. Respondents also report that the threat of holding a ballot is sometimes sufficient to change management attitudes. The devolution of pay bargaining and grading systems has limited the potential for organizing industrial action on a national scale, as civil servants are now working under a variety of different conditions and grading structures. In any case, decentralized bargaining makes concerted national action for better pay and conditions unlawful (although it may contribute to an increase in localized strikes) (Corby 1993). Inevitably, pay and job security are normally the issues being pursued in those limited circumstances in which unions still feel that strike action is an appropriate tactic. Thus, in Germany, the most important strike in recent years took place in 1992 when the government refused to accept a pay increase recommended by arbitration. Similarly, in Spain, the unions have organized a number of strikes during the 1990s following government refusal to apply salary revision clauses. In conclusion, respondents in central administration tended to identify with the decentralization of bargaining arrangements, but within a framework of national agreements. They also emphasized a collaborative approach to employer relations. There were, however, some important variations in response. The situation faced by the UK unions has been so difficult that the potential for collaboration with the employer at national level has been extremely limited, although it was easier to identify commonality of interests locally. In addition, in the German responses, it was possible to detect a greater ambition for co-management in the sector than in the other countries where collective bargaining was seen as the main mechanism for regulating relations with the employer.

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The bargaining agenda Given the financial constraints faced in central administration, there has been limited scope for the unions to make progress in the area of pay. The unions’ attention has increasingly focused on attempting to protect current employment levels, standardize conditions between different groups of employees (permanent/ temporary, conventional contract workers/civil servants, full timers/part timers), guarantee equality of opportunity, and extend training opportunities. This does not mean that unions have renounced the objective of protecting the living standards for public employees. A frequent complaint is that governments continue to impose austerity policies on public employees, even when the economic situation has improved and the convergence criteria for Economic and Monetary Union have been met. In the area of pay, there has been an increasing interest in locating perfor manceand productivity-related increases/bonuses on the bargaining agenda. In most countries, this development was viewed positively as long as it was negotiated, agreed procedures were introduced to regulate the performance appraisal process, and the performance bonuses were in addition to the annual salary award. The Italian unions, in particular, see pay increases related to productivity as a useful method of enriching decentralized bargaining. Typical complaints in this area are those of Spanish respondents, that productivity bonuses are too often based on arbitrary management decisions according to non-merit based criteria (such as working after normal hours). The situation in the UK is more complex. Economic constraints have seriously affected performance-related pay schemes. The schemes are not perceived as rewarding performance. Public expenditure limits have made it difficult to meaningfully reward good performance. In order to operate within tight budgets, management are increasingly reducing the differential between high and low performers. A survey of the Inland Revenue staff by the Centre of Economic Performance found that 78 per cent of employees believed that there was an implicit quota imposed on the number of top performance ratings to be given (IDS 753 1998). Unions in the UK are counting on the new Labour government to move the emphasis back to across-the-board pay increases or at least to reduce the proportion of annual pay increases which are based on performance. The need to maintain employment levels has ensured an emphasis upon employment protection on the union bargaining agenda. However, the priorities vary according to the intensity of the problem. In the UK, prominence is given to finding mechanisms to avoid redundancies, or implement them in the least traumatic way. The safeguarding of the position of employees in newly privatized and contracted-out areas has received particular attention. The recourse to legislation, in the form of the Transfer of Undertakings Protection of Employment Regulations (TUPE) has been important in this respect. The regulations were enacted in 1981 in order to implement in the UK the Acquired Rights Directive of the EU. The Directive seeks to protect the terms and conditions, including union

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recognition, of workers transferring from one organization to another. In the 1992-93 market testing programme, TUPE regulations applied to 7,200 of the 12, 000 posts affected by contracting out and privatization (The Citizen’s Charter 1994).3 In Germany, there is a drive to extend part-time work as a means of creating jobs, on condition that the working conditions and career prospects of part timers are improved. In Spain and Italy, representatives stressed the need to negotiate the transfer of workers from overstaffed to understaffed departments in order to avoid redundancies. The conversion of temporary contracts into permanent appointments, and the achievement of civil service status for some categories of workers on conventional contracts, are important objectives for the Spanish unions. In Italy, the unions are seeking the application of national agreements to all categories of flexible employment (part-time contracts, fixed-term contracts, training contracts, and teleworking). Equal opportunities issues form an important part of union bargaining proposals in all the countries studied. The PCS in Britain, the DAG in Germany, and the ÖTV in East Germany all have more women than men in membership. However, there is some evidence to suggest that while issues directly concerning women normally form part of the bargaining agenda, they are also among the first to be dropped during negotiations (Waddington and Whitson 1996). Research indicates that the development of equality issues for the negotiating agenda is more effective and their prioritization is more likely if women are well represented in the negotiating teams and in the decision-making structure of unions (Dickens 1997). Unions in all countries indicated a willingness to increase the number of women officials. Both the women’s departments of the main Spanish unions are calling for an increase in the number of female negotiators trained in equal opportunities issues. The funding available through EU institutions can play an important role in providing education in the equal opportunities area for trade unionists, particularly in Spain where resources are limited. Interestingly, the decentralization of bargaining arrangements in the UK has resulted in some advances in this area. Equality of opportunity and maternity and paternity leave are issues upon which the unions have made some progress through decentralized bargaining. Fairbrother (1996), in analyzing the effects of decentralization in the Benefits Agency, argues that unions at local level have been more determined to press issues such as equal opportunities and sexual and racial harassment, as well as the extension of the conditions of employment of full-time workers to part timers. However, factors outside immediate union control also influence the results of bargaining in this area. Lewis (1997) explains the problems of implementing familyoriented policies (including flexible or reduced hours of work and periods of leave) in a case study of a large British public sector organization. The organization was in the process of restructuring and had already contracted out much of its former work. According to the personnel department, the ‘[equal opportunities] provisions are largely ineffective as the prevailing workplace culture makes it difficult for most

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employees to take advantage of them’ (Lewis 1997:14). The provisions, in addition, created considerable hostility among employees without family responsibilities who were anxious about losing their jobs and yet felt that other colleagues were receiving benefits. Cunningham et al. (1997), in a case study of a large civil service agency, reveal how managers perceive equal opportunities as no longer being an issue because they need to focus on improving performance and implementing efficiency savings. The authors argue that greater managerial autonomy has considerably eroded the ability of the centre to monitor and sustain equal opportunities practices on a service-wide basis. The study also suggests that delayering has negatively affected the representation of women at higher executive officer (HEO) grade and above (HEO is the grade at which the proportion of women starts to be lower than that of men).4 Thus, although with decentralization UK local union representatives have been active in putting forward equal opportunities issues and integrating them into union policy, they have by no means always been operating in a favourable context. Several writers point out that, all things being equal, equality of opportunity in employment is more easily achieved by centralized bargaining because larger groups of staff are covered, thus diluting the potential for hostility between employees (Armstrong and Cornish 1997; Rubery and Fagan 1995). Occupational training is considered by respondents as an important instrument for improving public sector performance, protecting employment, and thus avoiding the consequences of some of the destructive government cost-cutting strategies. The Spanish unions in the sector renewed with the government in 1997 the agreement on continuous professional training. The Italian unions are pressing for the dedication of 1 per cent of the total wage bill to training. ÖTV’s programme on modernizing the public services calls for an increase in continuous training for employees and leadership training for managerial staff. Special attention is paid in ÖTV’s programme to making available training for women as a way of increasing their access to promotion and management positions. Only the UK unions have had to deal to any great degree with new management techniques such as teamwork, quality circles, and mechanisms for communicating directly with employees. Respondents reported that new management techniques have forced them to improve communication with members and to dedicate more resources to advisory services and education. After initially adopting an oppositional stance, the unions now cooperate with management when the latter proposes a genuine initiative and involves the unions in consultation. German unions are supporting the introduction of teamwork if staff councils are given the opportunity to become involved from an early stage. As already indicated, the reform of public administration is a priority issue for the German unions. The ÖTV sees this as being an opportunity to put forward a new programme based more on cooperation and dialogue than the usual ritual associated with wage negotiations. All the unions have put forward ambitious proposals for the modernization of public administration in response to the various suggestions made by the government in recent years. The ÖTV’s programme is perhaps the most complete in that it embraces the interests of most constituencies—civil servants,

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manual and white collar workers, managers, and women. It covers a wide range of areas, including the need to focus on the quality of services and to delegate responsibilities, claims for income and conditions of employment which provide adequate compensation, and quotas for women in managerial grades. This examination of the bargaining agenda has identified a degree of convergence in the responses from the different countries studied. There is some evidence that qualitative issues are becoming more important for the unions and that through the qualitative agenda unions are trying to take into account the various interests of their different constituencies. As Hyman (1994) pointed out in a different context, in relation to the German metalworkers’ Tarifreform 2000, the ÖTV’s proposals for the reform of the public services ‘permit a reconciliation of potentially conflicting interests’. Central administration reform, equal opportunities, and training are the main examples of this qualitative agenda. The discussion of equal opportunities issues emphasized the importance of union collective bargaining pressure being accompanied by favourable institutional and administrative structures. Finally, notwithstanding the previous comments, it should be stressed that more quantitative issues related to employment and pay are still very important for the unions. Political involvement In Chapter 2, it was argued that unions need to complement collective bargaining with intervention at a political level to influence social and economic decisions in the interests of their members and to ensure a favourable legal context for union activity. Inevitably, in central administration, influencing the political process is even more important than in other sectors. Respondents in all countries emphasized the importance of legislation being enacted to guarantee union representation and clarify the status of collective bargaining procedures and outcomes. The UK unions expect union recognition and representation in newly privatized and contracted-out areas to be helped by legislation the new government has promised to enact. The Spanish unions have achieved greater guarantees for the implementation of agreements in conjunction with the introduction of dispute resolution mechanisms in the Public Function Statute agreed with government in 1998. In Italy, the 1993 Tripartite Agreement and subsequent administrative reform have provided unions in central administration with a system for regulating employment conditions based on collective bargaining and union representation. Before, the influence of workers’ representatives in the sector was limited and they had to have recourse to lobbying and participation in the administration boards of departments. The ÖTV and DBB in Germany are seeking to formalize the ‘quasi system’ of collective bargaining that exists for civil servants. The government is insisting that for civil servants to enjoy collective bargaining rights, they must first renounce their status as civil servants. The ÖTV is prepared for teachers, postal workers, and similar occupational groups to lose this status in return for bargaining rights, but

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not employees in core governmental services. The DBB, however, rejects this approach and considers it important to maintain the status of civil servant on a wider basis (and with this, the absence of the right to strike). The ÖTV considers the DBB’s position has been adopted because its raison d’être would be threatened by such a move. The DBB can, however, block the ÖTV’s proposals as they require the support of a majority of MPs (being an amendment to the constitution) and the DBB has considerable influence in Parliament. The unions in all the countries in the study are seeking to exercise political pressure in support of the welfare state and in defence of public services. They are also attempting to involve other collectives in the community in these campaigns, such as consumer and resident groups, which have an interest in the maintenance of public services. The ÖTV has developed a long-term strategy that depends upon building a consensus in society on economic, environmental, and social policy in relation to the provision of collective goods. Among the areas around which it feels such a consensus could be built are delivering efficient and effective public services, and establishing environmentally sound systems for the collection and disposal of waste and supplying energy. It initially had to concentrate on winning support among its own members and officials. The UK unions jointly organized a campaign against market testing with the message that contracting out and privatization gave more priority to cost factors than to quality of services. The Public Service, Tax and Commerce Union (PTC), in its document The Future of Public Services (1997a), has developed a programme which seeks to meet the needs for efficiency and effectiveness, whilst providing job security and quality of services. In Spain, a campaign for the defence of public services is coordinated at confederal level to ensure that all federations with public sector workers are involved. The CGIL in Italy has put forward proposals which focus upon improving productivity, the professionalism of public employees, and the quality of services. As discussed elsewhere, the traditional links of trade union movements with leftwing parties are tending to decline in all the countries studied. ÖTV representatives believe that the closer relationship with the SPD which developed as a result of the latter’s long period in opposition is likely to be replaced by what is perceived as the UK model, of more distant government-union relations following the SPD’s win in the last federal election. This is viewed in a positive light, as undermining the view of the trade unions as part of a political movement and thus making them more attractive to potential members. Respondents acknowledge the need to work with all the principal political parties, particularly in a sector like central administration where many issues relevant to the unions and their members are decided in Parliament. In Germany, individual unions continue to try to influence the decision makers through direct contacts with members of Parliament. In practice, the ÖTV has continued to cooperate more closely with the SPD on the reform of public services, finding this party more receptive than the parties of the governing coalition. It has also improved its relationship with Bundnis 90 (the Greens), helped by the emphasis upon environmental issues in the union’s reform programme. However, the Christian Workers’ Commis-sion, the previously important pro-union

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parliamentary faction within the CDU/CSU, appears to have lost influence within the coalition and is now discounted by the unions as a significant force. As in Germany, the Spanish and Italian unions emphasize that they maintain relationships with all political parties. In Spain, every year, before the approval of the national budget, they send their proposals and comments to all political parties. This even-handed approach has helped relations with the new Popular Party government. Although the latter is eager to increase the participation of the private sector in the provision of public services, it has, at the same time, been willing to reach important compromises with the unions such as the Public Function Statute, upon which limited progress had been made under the previous Socialist administration. In the UK, none of the unions represented in central administration are affiliated to the Labour Party, and some of the unions retain parliamentary advisers from all three main parties. UK respondents, however, feel that they have now more access to ministers than before, as the new government is more prepared to listen to the unions. ‘Labour ministers have shown a readiness to include the unions in a dialogue on the future of public services’ (PTC 1997:4). On the other hand, the limits to this dialogue are recognized because the new government’s continued commitment to previous budget limits reduced their flexibility. As one national representative explains: Tactically, it is a slightly different approach—how we deal with this government; we will probably have to do more difficult negotiations rather than being involved in endless conflict (and generally losing). Some of this will probably involve compromises that we may not like. This discussion of union political involvement has, therefore, indicated the delicate path which has to be trodden by all the unions in central administration and the pragmatism which now characterizes their relations with political parties who form the actual or prospective employers of their members. Respondents have indicated that their political activity focuses on two principal areas, the defence of the public sector and the welfare state, on the one hand, and the quest for favourable institutional arrangements regulating the employment of civil servants. Relations with the membership All the unions involved in the study are paying increased attention to membership recruitment. This is perhaps most visible in the UK, where membership is the only measure of union representativeness. Following the introduction by the previous administration of the legal requirement that, every three years, UK unions have to obtain their members’ agreement to their employer deducting the union subscription from their salary (check-off), the unions set up special recruitment units and appointed organizers in each region. Recruitment became much more centrally coordinated and unions were able to identify those areas where membership levels were low in

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relation to potential membership. The decentralization of collective bargaining has created specific problems for recruitment. Local representatives and full-time officials have tended to forget about recruitment as their efforts have been directed to coping with the changes in organization and bargaining structures. To counteract this and learning from US union practices, the IPMS appointed in 1997 six organizers to concentrate upon recruitment in conjunction with the branches. The union recognizes that, in practice, members tend to be recruited by local representatives, as suggested by Waddington and Whitston (1997). The ÖTV believes the development of apathy is an important factor in the decline in membership. They consider that an important part of the answer to the membership problem lies in increasing involvement in the union and raising the profile of the union in the workplace. The dilemma should not be expressed in terms of individualism versus collectivism, but in terms of managing the dynamic relationship between the two. While it may be difficult to persuade employees to fight for a collective issue such as union bargaining rights, they are more willing to be involved in issues which they relate more directly to their individual situation, such as the day-to-day, more tangible activities of their staff councils. Thus, the union has instituted a recruitment drive amongst staff councillors and increased the provision of specific training services for them. In addition, as part of the union’s decentralization of its internal structure and decision-making processes, staff councillors and individual employees are being encouraged to come up with solutions for specific local problems. The Spanish unions have similar problems to their German counterparts: a weakness in the identification of employees with the unions in the workplace; very often delegates standing for elections on a union ‘slate’ are not even members of the union. As in Germany, staff and works council representatives tend to be preoccupied with the problems of their own department, while the union branches tend to have a wider perspective. However, unlike the ÖTV, the Spanish unions are seeking to increase their appeal to potential members by strengthening the role of the union branch. The channelling of union policy and activity through the works and staff councils is not seen as helping the membership situation. It is also felt that employees do not appreciate the differential contribution of each union if the emphasis is upon joint action through the works and staff councils. Employees would have a clearer understanding of the relative significance of the contribution of each union if the branch were to have a more prominent role. This approach, however, clearly has its problems. Non-members are likely to feel that works and staff councillors should be answerable to the workers who elected them, rather than the union branch to which they belong. It has also been pointed out that even union members tend to support the staff and works council more than their own union (Rebollo et al. 1993, quoted by Miguélez 1995). There is some recognition among respondents of the need to expand membership to occupational groups not traditionally organized. In Spain, the UGT and CC.OO are trying to attract technical and professional staff by including issues of relevance to them in their bargaining proposals. As noted earlier, the DBB and CSIF are

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seeking to increase their membership among conventional contract workers. The CSIF is also attempting to bring professional associations into the union by offering them representation at national level. In the UK, the PCS considers the newly privatized and subcontracted sector as a potential area for membership expansion, although it recognizes that it faces a number of problems such as employer hostility, competition from non-civil service unions, and the lack of an existing industrial relations structure. The IPMS sees most of their future potential membership as lying outside the public sector. Currently, one-third of the union’s membership is in the private sector. The FDA is attempting to organize the top grades in other areas of the public sector such as the NHS. When members are transferred to the private sector and bargaining rights do not exist, the UK unions attempt to maintain membership by offering individual representation and services. NUCPS introduced in 1995 a reduced rate of subscription for privatized sectors where the union did not have collective bargaining rights but members were still entitled to individual services. The IPMS and FDA, in addition, have set up a service providing advice and assistance on individual contracts, in response to the increase in the number of these contracts among higher grades. Germany and the UK are making some efforts to recruit other groups not well represented in membership. The German unions, for example, are trying to recruit more women and young employees by improving services to these groups, creating special committees for them and reflecting their interests in union bargaining agendas. The UK unions have produced recruitment material for women, ethnic minorities, the lowest paid grades, and casual workers. However, respondents do not appear to be very optimistic about the results of these efforts. The most important and realistic objective is seen as being the consolidation of the existing membership. The need to decentralize union structures so as to facilitate member involvement and increase union credibility, which was discussed in Chapter 2, is a theme of some of the responses in central administration. For the ÖTV it is seen as a central development. In 1994, the union initiated an internal reform process to decentralize its internal structure and decision-making process, although, given the size of the country, it believes the maintenance of a hierarchical element in the union’s internal organization is unavoidable. The union has sent officials to observe the process of union decentralization in New Zealand, which came about as a result of the reform of public services in that country. This internal reform process, together with its programme for the modernization of public services, is expected significantly to improve the image and credibility of the union. British representatives consider that members identify more with agreements reached at a departmental/agency level than when bargaining was conducted nationally. Members have now more control over the bargaining process as they are closer to the locus of negotiations. Fairbrother (1996) argues more participative forms of unionism have begun to emerge at a local level as a result of pressures from members, some of them previously inactive, and local activists. The decentralization of bargaining arrangements in Britain has also meant a shift in the relationship

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between lay representatives and full-time officials. Lay representatives, who are generally unpaid, now have to be responsible for more negotiations at a local level without the assistance of a full-time official. Whereas previously national officials represented and spoke for members, they now have to concentrate on facilitating workplace organization, supporting lay representatives, and encouraging the development of networks of activists from different workplaces (ibid.). Italian representatives acknowledge the need to consolidate their local organization and develop more effective representatives at workplace level. The spread of works councils has helped the unions to increase their contact with employees. All the main unions in Italy emphasize the importance of systematic training activities for local representatives in order to develop leadership skills and the capacity to engage in bargaining at workplace level. The emphasis in Spain, as already mentioned, has been on strengthening the union branches at the expense of the works councils, with policy being agreed in the branch and then communicated to the works council. This is considered the most effective way of increasing members’ participation in the bargaining process. Mergers and greater collaboration between unions are considered by respondents as offering ways of extending union influence, increasing credibility, and improving the services offered to members. Unions increasingly tend to act together by presenting joint claims to the employer. The precursor to merger has often been increased collaboration in the collective bargaining process. In the UK this has been the case, with increased collaboration between the unions in local-level bargaining, and in Germany with national-level collaboration between the ÖTV and DAG since 1994. The federations of the main unions in Italy and Spain have been working together since the 1980s as part of ‘unity of action programmes’ promoted at confederal level. Greater independence from the political parties in both countries has helped to improve relationships between the unions. In Spain, the UGT and CC.OO have increased their cooperation with CSIF in recent years, particularly at national level. The widening of the constituencies represented by CSIF has been an important factor contributing to this. It would, however, be wrong to interpret the recent mergers in Britain as largely being driven by union strategies to enhance their credibility and so on. They can more convincingly be seen as a response to the employer strategies of decentralizing collective bargaining and the extension of single-table bargaining. The merger between the CPSA and PTC is an important initiative. In the past, merger attempts between the NUCPS and CPSA failed, in part because of the existence of some class antagonism between the two unions. The CPSA saw itself as the union of the lower grades, whereas the NUCPS perceived itself as the union of managerial grades.5 Separately, the IPMS and FDA established a federation with several other small unions, but eventually the project failed. The IPMS is now considering whether to continue as an independent organization. Other options include merging with the PCS or with two unions with a similar membership in the private sector, MSF and the NUI. The last represents the most radical option because IPMS would, in practice, become part of a private sector union with members in the civil service. It

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seems the option preferred by the national officials, but some local representatives would rather the union merged with the PCS or continued independently. Mergers in Germany and Spain have not been driven as much by employer strategies but have been strongly promoted by the respective confederations. The merger of the ÖTV and DAG is seen as extremely significant because the DAG was originally established as a competitor to the DGB and the merger would bring it under the umbrella of the DGB. CC.OO respondents in Spain expect the merger of the union’s public sector federations to free resources to improve organization at workplace level, as many provincial, regional, and sectoral structures which currently absorb too much time and energy will disappear. The review of the literature in Chapter 2 posited the importance of unions recognizing that members have wider needs than those directly associated with the workplace. We have already indicated the interest of respondents in central administration in the defence of public services and the welfare state, but these issues do, of course, very much coincide with the workplace interests of their members. Wider social issues tend to be the responsibility of the confederations in Spain, Italy, and Germany. Notwithstanding this, environmental protection has become an increasingly important issue for all the German unions involved in central administration. The civil service unions in the UK have more independence from the TUC. They tend to be active on those issues that coincide with their members’ interests. Thus, the PCS has organized campaigns in the areas of social security, unemployment benefit, training provision, and taxation policy, while IPMS has been active on research and environmental issues. Environmental protection is becoming increasingly important for all German unions in central administration, while in Spain and Italy those issues tend to be the responsibility of confederations. In relation to the non-work needs of members in the area of individual services, it tends to be the view that commercial services should have a secondary role in the recruitment of new members, although they are considered useful in retaining existing members. Some respondents in the UK and Spain dislike the idea of members seeing the union as a provider of commercial services which could be offered by any private company. In this section we have noted the increased importance given to recruitment, organization, inter-union collaboration, and restructuring (including a degree of decentralization) by the unions. However, there are differences in approach. For example, internal restructuring has not always been initiated for the same reason. The objective of the ÖTV has been clearly to increase members’ access to and involvement in the union and decentralization has been embraced as an essential policy of the union. In Spain and Italy, the focus has been upon improving union organization at workplace level by consolidating existing structures. In the case of Spain, this means promoting the union branch at the expense of the works council (since most employees are not union members, this is unlikely immediately to improve employee involvement). In the UK, decentralization has been more a pragmatic response to external changes in the structure of the civil service. Similarly, we have also noted different emphases in the recruitment area. The UK emphasis is

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upon appointing special organizers, the ÖTV stresses the role of the works council, while in Spain the focus is on the need to promote the branch role. Supranational activity and organization Unions in all the countries studied recognize the importance of supranational activity and the need to increase cooperation and coordination in order to build a common response to European developments that affect the sector. As mentioned earlier, most unions belong to the EPSU. However, the DBB in Germany and CSIF in Spain belong to the CESI. Through these organizations, the individual unions concentrate on improving links with their counterparts in other countries. The Spanish and Italian unions are seeking to strengthen the influence of the Mediterranean countries in the EPSU. The EPSU seeks to influence the ETUC’s position on key issues such as the role of the public services. It also tries to increase the awareness of European union policy among its affiliated unions, particularly through the production of training materials (Fishbach-Pyttel 1997). In relation to the EU decision-making processes, the EPSU is seeking to influence European institutions on issues such as the need to guarantee public cover for sickness and old age. It tends to be supported in its efforts by the European Parliament, the European Centre of Enterprises with Public Participation and some members of the European Commission (ibid.). A priority is the promotion of the social dialogue in the public sector through the four standing committees (central administration, local and regional administration, health care and social services, and public utilities). Issues considered to be particularly appropriate for social dialogue include job creation, equal opportunities, quality standards for public services, privatization, and contracting out (Keller and Henneberger 1997). Social dialogue has been easier to establish with the employers’ organizations of local and regional authorities, and of some public utilities (electricity). In the case of central administration, it has been more complicated. This is partly because of the absence of an effective employers’ organization at European level and partly because of the reluctance of most governments to engage in social dialogue. An additional problem is the CESI’s demand for recognition as a social partner, a proposal that has the support of the German Interior Ministry. Other factors which hinder the work of the EPSU and the development of supranational activity generally include the differing priorities of the individual national unions and the differing systems which exist for the regulation of industrial relations in central administration in different countries; legal regulation versus collective bargaining, consultation versus negotiation (see Fishbach-Pyttel 1997; Keller and Henneberger 1997). In addition, there is a lack of resources. The EPSU has a total staff of five, and the CESI, seven. There are also some problems of demarcation between the EPSU and the PSI, the international secretariat for public services. There is some direct involvement by individual national unions at a European level to influence legislation. For example, the IPMS and PCS are lobbying the

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European institutions on the revision of the Acquired Rights Directive, which guarantees some protection of terms and conditions when employees are transferred from one organization to another. In addition, the TUC is working with the Socialist Group in the European Parliament and the Social Affairs Committee to influence the new proposals to amend that Directive. On the same issue, the EPSU coordinates the response of the unions in the different countries to amending the Directive through a legal network based on e-mail. Conclusions This analysis of union responses in central administration has indicated a number of similarities in the four countries studied. The unions show an awareness of the fiscal constraints under which the sector is operating and are opting for a collaborative rather than confrontational relationship with the employer. The bargaining agendas of unions are paying an increasing attention to qualitative issues such as the reform of the public service, occupational training, and equal opportunities, which are viewed as instruments for protecting employment and providing a more costeffective public administration, as well as a means of integrating the interests of the different union constituencies. Respondents tended to agree with the need to bring the unions closer to their members and to improve work- and non-work-related services in order to maintain membership. Greater union collaboration and mergers are seen as part of this process of improving the services and credibility of the unions. In general, also, the responses in central administration coincide with the type of strategic development discussed in Chapter 2. However, some qualifications need to be made to this overall picture of convergence. Differences in response have been identified which can often be related to peculiarities of the industrial relations and economic context in which unions are operating. The UK unions have had to deal in a short period with the introduction by a hostile government of radical changes in bargaining structures and employment security. The need to respond urgently to these changes has absorbed the vast majority of union resources and time (although it is now hoped that the change of government, and therefore employer, opens up the possibility of operating in a more favourable environment). In contrast, the German unions have been working within a much more stable industrial relations context and have therefore had more opportunities to build up a response to the reform proposals made by the government and to introduce radical structural reform. The Italian unions have faced a transformation in their economic and industrial relations context, but the changes have been introduced more gradually than in the UK (and with the support of unions). The Spanish unions operate within an industrial relations context that is still developing. Although recent Spanish governments have generally supported collective bargaining in central administration and the role of the unions, the application of agreements has so far remained dependent on government goodwill (which has not always been present).

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More strategic responses are to be found in Germany, and especially in the ÖTV. The ÖTV is developing a strategy based on co-management and the improvement of relationships with members. There is a consistency in response between the different union levels, and national and workplace structures are well coordinated. There are also examples of strategy implementation with a strong internal campaign to convince members and officials of the need to influence the design of public service reforms. The Italian unions are promoting a collaborative relationship with the employer and appear to be successfully extending their presence and influence in the workplace, although it is too early to definitively evaluate the outcome of their initiatives. In the UK, the creation of PCS increases the possibility of strategic responses being developed. However, a major problem lies in the disagreements which exist between different levels of the union structure. Sometimes they appear to be working against, instead of complementing, each other. In Spain, the unions have tended to act at national level, not paying enough attention to workplace organization, with the result that national initiatives very often do not reach other levels of the organization. This centralization of policies is exacerbated by the lack of coordination between different levels of the federal structure, the tensions between union branches and works and staff councils, and the lack of resources as a result of the low membership. Notes 1 In this sector, it proved impossible to cover data on Denmark in time to include it in the research study, due to unforeseen personnel moves. 2 Agencies privatized since 1995 include the Transport Research Laboratory, the National Engineering Laboratory, the Laboratory of the Government Chemist, Natural Resources Institute, the Chessington Computer Centre, the Occupational Health and Safety Agency, Her Majesty’s Stationery Office, and the Recruitment and Assessment Services Agency. 3 A report published by the Equal Opportunities Commission (1995) argues that the TUPE may not give the degree of protection for jobs, terms, and conditions that some trade union representatives and managers involved in the study believe. The report states that, in practice, employees’ rights are not protected because employers can reduce staffing levels for economic, technical or organizational reasons and apply reduced terms and conditions for their new employees. Although the TUPE applies to temporary and casual staff, the contractor can decide not to renew the contracts of temporary staff when they come up for renewal. 4 The three grades below higher executive officers are, in order of importance: executive officer (55 per cent of staff are women), administrative officer (72 per cent of women), and administrative assistant (70 per cent of women). Source: Civil Service Statistics 1994. 5 The term ‘class antagonism’ has been taken from Fairbrother 1996.

8 Conclusions Mike Rigby, Roger Smith and Manuel Pérez Yruela

Introduction In this final chapter we seek to relate the findings of the four sector-based chapters more directly to the issues raised in Chapters 1 and 2. We draw some conclusions on the relevance of the findings for the debate on the convergence or divergence of European industrial relations systems, and consider to what extent the responses of the union representatives are consistent with the role of trade unions as reflected in the literature reviewed in Chapter 2. We also discuss the strategic nature of the responses identified. Finally, we reflect upon some of the implications of the research for the trade unions. Convergence/divergence? We indicated in Chapter 1 that the academic literature on European industrial relations of the last two decades has tended to emphasize the differences in industrial relations systems rather than their similarities, giving particular weight to the distinctive national contexts in which the systems are located. This emphasis has persisted, in spite of agreement on the existence of broad periods in post-war Europe through which most industrial relations systems have passed, such as ‘the revolt from below’ in the late 1960s and early 1970s, and neo-corporatism or concertation in the later 1970s. It is suggested that the data that has been reported here on trade union responses, by showing quite a high degree of convergence at a general level, does not fully support the emphasis on divergence noted in the literature. Most union respondents were dealing with enterprises operating in a significantly more competitive environment than in the 1960s and 1970s, as a consequence of which they commonly faced a more intransigent management, seeking to restrict trade union influence and reduce labour costs. The direct causes of this changed environment varied according to sector. In the case of the manufacturing sectors, the globalization of markets was the main factor, while in banking, deregulation and the development of domestic competition was a major influence. However, even central administration was subject to similar, if less intense pressures. The increasing

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need to restrain public expenditure was encouraging governments to seek to reform the public services and improve productivity. Given the similarity in the challenges faced by our respondents, a relatively high degree of convergence in their responses should not be surprising. In respect of union-employer relations, most of the responses reflected a consensus about the need to move away from oppositional stances and develop a more collaborative relationship with employers at a decentralized level. In particular this was manifested in a rejection of industrial action as a significant tactic, a recognition of the need to contribute to the competitiveness of the enterprise, and a positive approach to flexibility and HRM techniques. If we turn to consider internal matters, a greater attention to membership issues in respect of recruitment and organization, communications, and training was evident. Unions were also seeking to strengthen the sectoral element in their structure to give a more focused service to members, as well as stressing the importance of greater unity and inter-union collaboration. In all sectors this latter element was also manifesting itself in considerable merger activity which sought to consolidate the unions’ strength. The merger activity did take different forms in different countries. In Italy and Spain, there was a great deal of activity in the merger of federations within the main confederations. In Germany and the UK, there have been an increasing number of mergers between independent unions, while in Denmark we have noted the development of cartels or federations of unions to take forward collective bargaining in particular sectors. A potential contradiction in these structural developments should be noted. Sometimes the development of a sectoral focus is not helped by the creation, by merger, of federations responsible for a multiplicity of sectors. The sectoral focus is diluted and competition for resources and attention breaks out between the different sectors of the federation. Responses in respect of political and supranational activity also showed similarities. A distancing of relations with political parties of traditional allegiance and a more pragmatic approach to political activity were common developments. Respondents showed an increasing interest in supranational activity, stimulated by the opportunities presented by the development of European Works Councils. Any variations in the responses should therefore be located within this overall pattern of convergence. Such variations can largely be traced to distinctive sectoral or national contexts. For example, the strength of collectivism in Denmark and the confidence of union representatives reduced the number of new policies put forward by Danish respondents. The approach to HRM techniques differed according to national context. In the UK and Spain, there was a more suspicious and less positive view adopted of developments such as teamwork, related to the weaker position of the unions in those countries. In Denmark, Germany, and Italy, on the other hand, such practices were seen by respondents as offering opportunities to humanize the work situation of their members. The decentralization of collective bargaining is another area where variation in response is worth comment. First, it should be stressed that decentralization means different things in different contexts, given that we can find a multiplicity of

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bargaining levels in the sectors and countries covered; plant, enterprise, regional/ provincial, and national sectoral. Although respondents generally accepted the need to operate in a more decentralized collective bargaining environment, whereas Italian and Danish respondents viewed decentralization positively, as offering opportunities to improve on national agreements, the views of other respondents were more ambivalent. German respondents tended to view decentralization as a necessary concession to maintain the integrity of multi-employer bargaining. In the Spanish electronics sector, the emphasis was upon building up more centralized national sectoral bargaining to compensate for the weakness of union influence at decentralized provincial and enterprise levels. In all countries except the UK, the importance of maintaining an articulated two-tier bargaining structure consisting of multi-employer and enterprise levels was stressed. UK respondents, however, tended to accept decentralization to plant/operating unit level as an inevitability and therefore did not weigh its merits in any strategic sense against those of other bargaining levels. As this discussion of variations in response in relation to HRM techniques and decentralization has indicated, the responses of UK representatives often differed in emphasis from those of other countries. The more exposed situation of collectivism in the UK confronted union representatives with problems of a more intense nature. This, in turn, influenced the nature and self-confidence of their responses. For example, in the case of central administration, while most other respondents were concerned about the consolidation of collective bargaining at national level, and participating proactively in the reform of the public service, the UK unions were preoccupied with reacting to the initiatives of the Conservative government in relation to decentralization, market testing, individualization of pay, and so on. This situation was replicated in other sectors. The institutional weakness of the unions in the UK and the more exposed nature of the UK economy (which in turn strengthened management’s will to minimize union influence) on the one hand emphasized the importance to respondents of developing new policies. However, these factors also reduced their self-confidence and ability to develop and implement effective responses. We return to this theme later in a discussion of the strategic nature of trade union responses. So far, we have explained variations of response in terms of differing national contexts. There are, however, some differences which can be more appropriately related to variations in sectoral context. In relation to some areas, for example, it is possible to detect a manufacturing-service sector division. In the service sectors of banking and central administration, collective bargaining is less consolidated than in manufacturing in most of the countries in the study. This in turn affects the union agenda. In central administration, even in countries like Denmark, Germany, and Italy which have typically strong collective bargaining institutions in other sectors, the consolidation and improvement of the national collective bargaining machinery is a priority for the unions. In the case of banking, the emphasis in responses was also on the importance of strengthening national sectoral bargaining. Decentralization was not viewed positively because it was a process which the

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unions could not control. It is in this context that it is possible to understand why banking was the only sector where a significant proportion of respondents were not unequivocally supportive of a collaborative relationship with employers, at least in the short term. The position of the respondents in Denmark, Germany, and the UK seemed to reflect a situation where the banking unions had on occasion to adopt a more oppositional stance in order to be taken seriously by employers and establish meaningful collective bargaining. Although greater collaboration with the employer may have been an ultimate objective of the unions in the sector, they were in the process of establishing (or reaffirming in the case of Denmark) their union credentials and consolidating their bargaining role. In contrast to the service sectors, in food manufacturing and most of the electronics sector there is a longer tradition of stable bargaining machinery and the preoccupation of the respondents is more on establishing the correct equilibrium between multi-employer and enterprise bargaining levels. There are other areas in which this manufacturing-service division is apparent. For example, the approach to political relations of the unions in the service sectors is more circumspect. They tend to be careful not to become associated with any specific political party. In the UK, for example, it was seen as important for political contact to be even-handed. Thus, in the banking sector, equal contact was maintained with MPs from the Conservative and Labour Parties. The challenge has been to exercise some political influence without offending a membership whose natural tendency is to view political contacts as outside the professional remit of their unions. Respondents in the manufacturing sectors, on the other hand, tended historically to have been comfortable with the maintenance of close relations with parties of the left. Although these relations were no longer as close as previously, often as much a result of changes in party policy as of union inclination, they were still important to the unions and could be of considerable use in dealing with particular problems at regional, national, and European level. There were also interesting variations in response between the two manufacturing sectors. Although respondents in the food manufacturing sector subscribe to the need for a collaborative relationship with the employer, to adapt to decentralization, and to focus on membership and structural issues, there is not the same degree of innovation and disjuncture in union policies as in the electronics sector. Although unions in the food manufacturing sector face problems which are similar to their counterparts in electronics, such as a more competitive environment, pressure for increased flexibility and decentralization, technical change, and rationalization, the problems are not experienced with the same intensity. The pattern of industrial relations tends to be more paternalistic with both management and unions willing to engage in joint problem solving, even in the process of managing rationalization exercises. In electronics, on the other hand, the harshness of the globalized, competitive environment and the associated management strategies translate into a more difficult industrial relations situation and therefore call for more radical responses from the unions. In respect of employer relations, these responses vary

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from the single union agreement in the UK to aspirations for co-management in Denmark, Germany, and Italy. Contemporary role of trade unions In Chapter 2 we reviewed the academic literature on the contemporary role of trade unions in European society. There was a consensus about the approaches which trade unions should adopt in several areas. The most important of these were: a collaborative approach to employer relations within a more decentralized bargaining structure; the promotion of qualitative at the expense of quantitative bargaining issues; an emphasis upon political intervention both to help to ensure legislation or ‘a legitimate climate’ favourable to collectivism in industrial relations and enable the unions to exercise an influence on macro-economic and social issues; more emphasis on membership issues, including decentralizing the union structure and encouraging member participation, attracting non-traditional groups into membership, and taking a greater interest in the non-work-based needs of members; the development of more involvement in supranational activity and collaboration. To what extent did the responses in the study reflect the approaches identified in the literature? As we have already indicated, the adoption of a more collaborative, less oppositional approach to relations with employers within a more decentralized context was generally evident in the data of the study. Also, respondents indicated an awareness of the importance of the unions seeking to exercise political influence to strengthen their position, although the degree of political involvement varied a great deal. We have already commented upon the caution of the service sector unions. There were also interesting differences between countries. For the Spanish unions, the maintenance of corporatist relations with the government was an important means of compensating for the organizational weakness of the trade union movement and of achieving gains in social, economic, and industrial areas. At the other extreme, UK respondents’ view of political intervention was more limited in its emphasis. It was seen largely as a way of securing legislation to make it easier for the unions to carry out their independent bargaining role. The evidence in respect of the development of a qualitative bargaining agenda was less conclusive. Most respondents reported that the more difficult environment in which they were operating was resulting in a more restricted bargaining agenda than previously. It was no longer feasible to present a long ‘shopping list’ in negotiation. Traditional issues such as pay and job protection were still prioritized by most respondents, with an increased emphasis upon the latter. Therefore, although there was an increased interest in a qualitative agenda, it was often difficult to give qualitative issues sufficient priority, and some, such as equal opportunities, seemed to be receiving less attention than before. Only occupational training figured consistently as a qualitative issue on the bargaining agenda, and even here there was little practical evidence of it being progressed. It is perhaps in respect of membership issues that the greatest deviation from the approaches discussed in Chapter 2 could be identified. Although membership issues

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were viewed as being of considerable importance by respondents, the primary emphasis was not, with a few exceptions, upon decentralizing the union structure and enhancing membership participation. The unions were concerned above all about membership levels and therefore most of the responses related to how to improve recruitment. Two aspects of this tended to be emphasized: the development of more effective organizing methods and making the union more attractive by enhancing services to and communications with members. The perception of members underlying this approach had more affinity with a top-down view of the union which saw the members more as consumers (and therefore representing problems) than as a force to be released within a more participatory structure. Respondents in Germany provided the most important exception to this pattern. There, the decentralization of the union structure to involve the membership and reduce the directive role of national and regional officials was seen as a major project. Italy was the only other country where a debate on membership involvement appeared to have started, but it had not progressed to the degree evident in German responses. It is true that in the case of UK central administration a significant decentralization of the union structures had taken place, but this had come about more as a reactive response to the disestablishment of national bargaining and the need to service local agency negotiations rather than being driven by considerations of membership involvement. Given the loss of membership and the economic difficulties faced by many of the unions included in the study, it is perhaps not surprising that the overall approach to membership represented a more immediate managerial-type response than a longer-term and more complicated developmental one. The responses also did not fully mirror the approach to involving non-traditional groups in union activity mentioned in Chapter 2. Although, certainly, most respondents saw it as important to encourage the involvement of women, ethnic minorities, young workers, and employees in small firms in union activity, and mentioned union policies directed to this end, in practice, in most unions, greater emphasis was placed upon what was seen as the more realistic option of consolidating membership among traditional groups even though, in many cases, these were contracting as a proportion of the labour force. The reasons for the limited advances in non-traditional areas are complicated. In the case of small firms, the problem was largely seen as a resource issue. The members likely to be recruited in this area are not seen as compensating for the time which would have to be expended. In the case of the other groups, the pressure for attention and resources within the unions tends to come from the traditional groups already in membership, which reduces the resources available for new membership initiatives. In respect of the final membership issue discussed in Chapter 2, the need for unions to accommodate within their agenda the non-work-based needs of members, most unions had developed a range of individual services in areas such as insurance, holidays, legal and tax advice, while via their confederal structures there appeared to be a recognition of the importance of union intervention on issues such campaigns for full employment, the preservation of the welfare state, and the maintenance or

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improvement of social security cover. The absence of a strong central confederation in the UK meant that these latter issues received less attention. The final area identified in Chapter 2 was the need for unions to become more active in supranational activity. The establishment of European Works Councils had clearly had an impact upon the responses of union representatives and provided a stimulus to the consideration of union activity beyond national boundaries. In the initial round of interviews, the prospect of EWCs dominated the thinking of national officers about supranational activity. By the time the second round of interviews took place, this interest in EWCs had spread to some enterprise-level representatives as well, in the case of the manufacturing sectors. Several of these representatives were by that time active in functioning EWCs. In addition to making EWCs work, responses tended to emphasize the importance of influencing and taking advantage of European-driven legislation, and the need to participate in the appropriate trade union federations at European level. However, in both interview rounds, a developed view of supranational activity was only evident in the responses of national-level officials. Respondents at other levels were preoccupied with domestic issues. Certainly, there was little in the responses to indicate the imminence of significant developments in terms of any Eurobargaining project. It is suggested that the involvement of trade unions in the bargaining area at European level in the immediate future is more likely to consist of attempts to coordinate strategy at a general level than of direct participation in bargaining. (A recent example of this is the adoption by the main trade union confederations of Germany, the Netherlands, Belgium, and Luxembourg of a joint declaration on the main features of a bargaining strategy for the 1998/99 round of negotiations.) This comparison of the data of the study with the approaches discussed in Chapter 2 has therefore identified a number of areas where the union responses do not fully reflect the emphases developed in the literature. In part this may be because the data was collected during a process of change which is still unfolding. For example, many respondents acknowledged the desirability of progressing a more qualitative bargaining agenda, but could not move forward more quickly on it in the circumstances in which they found themselves, fighting immediate threats to employment. The difficult environment in which many respondents were operating, and their lack of financial and human resources, encouraged defensive reactions which imposed limitations on the development of radical policies in areas such as the bargaining agenda, membership, and supranational activities. This encouraged, in a membership context, a focus on top-down organizing policies directed at traditional membership groups rather than questioning of the nature of the relationship between a union and its members, or serious efforts to expand into non-traditional membership areas. As pointed out in Chapter 2, major change of this kind requires considerable organizational resources and commitment. The absence of the former makes the latter less likely.

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Strategic responses? Our earlier discussion put forward three criteria by which to measure the strategic nature of the responses identified in the study. First, the strategic nature of responses should be reflected in a consistent pattern of identification with them at all the levels of the union, indicating a coordinated approach to their development. Second, strategic responses should be innovative and represent some degree of disjuncture with previous policies. Finally, there should be some evidence of strategy implementation, the operationalizing of the policies being put forward. Many of the responses identified in the study were not strategic according to these criteria. In some cases, policies put forward by national representatives found little echo at other levels of the union. Responses in the area of supranational activity were a clear example of this. Sometimes policies did not represent any major break with previous approaches. This could be said to be the case in respect of some of the membership issues raised. Finally, it was not always evident that implementation had taken place to any degree. An example of this was the oftenmentioned importance of putting training higher up the bargaining agenda. This lack of strategic responses at one level is not surprising. Trade unions have in the past tended to be characterized as reactive organizations. Many of the problems contemporary trade unions face are relatively new and there is not a great deal of experience in dealing with them. In addition, as we have already indicated, the unions’ resources are limited, partly because of the very problems confronting them. Notwithstanding the non-strategic character of many of the responses identified, the data does help us to identify those circumstances in which strategic policies are more likely to be developed. As one would expect, those representatives who were facing a more difficult environment tended to recognize the need for new approaches. Thus, representatives in the electronics sector were very conscious of threats to collectivism and of the need to develop new approaches if the trade union role was to be sustained. However, being in a relatively exposed situation did not of itself result in unions developing strategic responses. Thus, the responses of the UK unions did not appear to be particularly strategic. The exposed union situation in the UK, with an extremely competitive economic environment and a low level of institutional support for collectivism, encouraged a considerable number of new policy proposals, particularly in areas such as membership. However, typically these responses were defensive and fragmented and did not form part of an integrated approach. New policies developed by unions operating in a difficult industrial relations environment only tended to be translated into a strategic response when the unions were operating in a particular institutional context. The most strategic responses tended to be found among those put forward by the Danish, German, and Italian respondents. Examples of such responses included the efforts to strengthen the role of works councillors, extend and deepen codetermination, and decentralize the union structure in the German electronics sector. In Italy, there are the examples of the efforts of the manufacturing unions to

CONCLUSIONS 219

develop enterprise bargaining and, in the electronics sector, to establish observatories with employers to facilitate economic planning. In all three countries, representatives saw new management techniques as something to be exploited which had the potential to create a more rewarding work environment for their members. All of these examples of strategic responses had common characteristics. They were generally articulated by respondents at all levels in the unions involved as priority policies which represented new directions for their union. They were also policies in which the unions had clearly invested resources—there was evidence that there was a coordinated effort to implement them. A separate comment should be made about the Danish case. Many of the responses of the Danish representatives were not innovative, but reflected a confidence in the effectiveness of existing policies and a lack of conviction of the need for new strategies. The extremely supportive context for industrial relations in Denmark and the limited threats to collectivism largely explain this pattern of response. However, in those limited cases where difficulties were identified, the strong national context facilitated strategic responses, e.g. the management of restructuring in the food industry. The institutional context in which the unions were operating in Denmark, Germany, and Italy appeared to be a key factor which made more likely the development of a strategic response. The relative stability of multi-employer bargaining and the workplace representative structures provided a security for collectivism, and hence the unions, which gave the latter the self-confidence, space, and resources to develop and implement strategic responses. This process was also helped by the structure of the unions themselves. In the case of the German industrial sectors, particularly, the existence of one major union only in each sector encouraged a strong and undiluted focus on the problems of the sector and a high degree of unity and coordination in the response. Conversely, the existence of a fragmented union structure in the banking sector in Germany diluted the cohesion of the responses. In the case of Italy, although there existed a multi-union situation in the same sectors, all three federations were clearly focused on their sector, and all inclusive. There had also, in any case, been considerable emphasis on unity of action between the federations. The existence of strong confederal structures also facilitated strategic development, increasing the security and political integration of the affiliated unions or federations, by providing the link with national political institutions, as well as providing a source of stimulus and avenue of crossfertilization with the rest of the trade union movement. The national context of the Spanish representatives was similar at one level. The legislative framework encouraged collective bargaining and the representative role of the trade unions. There were also strong confederal structures with sector-focused federations. However, the responses of the representatives lacked the consistency of the Danish, German, and Italian unions. The views put forward at national level did not always concur with those of enterprise-level representatives, thus creating problems of implementation, particularly when the organizational weakness of the unions in the enterprise was taken into account. This was particularly evident in the

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case of policies such as the development of more collaborative relations with employers, and greater unity with union rivals. Therefore, the relatively centralized Spanish federations were limited in the policy options available to them. The Spanish unions were most effective in pursuing those policies which did not directly depend upon the mobilization of sustained rank-and-file pressure, but relied on the willingness of the government and national employers’ organizations to make concessions to preserve social partnership. The success which the unions have had in developing a national sectoral negotiating structure for engineering and electronics is a good example of this. This may appear to run counter to the decentralization found in the other countries, but it is entirely logical given the Spanish situation, providing both the unions and employers’ organization with the opportunity to reassert their role in the face of the fragmented, small-firm-dominated sector in which they have to operate. The UK unions did not enjoy to any degree the supportive context of the unions in the other countries. The absence of multi-employer bargaining structures and legislative support for collective bargaining put the UK unions in a very defensive position and made it difficult to develop anything but reactive responses while the fragmented union structure weakened the articulation of the responses which were developed. The data, therefore, to a considerable degree, confirms the approach of the literature reviewed in Chapter 2, which emphasized the importance of trade union structure and the institutional context of industrial relations for the development of strategic union responses. Thus, although the sector in which they were operating posed common problems to the representatives across national boundaries and generated convergent responses at a general level from respondents, at a more detailed level the responses differed considerably in their degree of strategic content and these differences could be traced to the impact of the differing national contexts in which the unions were located. Implications for the unions The problems faced by most representatives interviewed in the study originated not in the new HRM policies generated by the management representatives with whom they had to deal on a day-to-day basis. They could be traced back, in most cases, to the more competitive situation which the employing organizations faced. The ability of the unions to roll back the direction and pace of these competitive pressures is limited. This makes inevitable and necessary a process of union adaption to this new industrial environment. This study suggests that the success of this process of adaption is not only a function of the specific policy initiatives adopted by the unions, but of the context in which they are developed and implemented. Only unions operating in a supportive context, reflected in strong collective bargaining institutions and a focused union structure, are likely to have the selfconfidence and ‘space’ to develop strategic responses. It is, therefore, as important for unions to seek to strengthen the institutional context in which they are working

CONCLUSIONS 221

as it is to develop new policies—the effectiveness of the latter process is dependent upon their success in the former. Part of their context is more directly under the unions’ control—that is their own structure and organization. Priorities here include strengthening the confederal union structure, ensuring an undiluted and undivided sectoral focus, working for unity and coordination of policy if not merger, and establishing an appropriate balance between national- and enterprise-level organization. A more difficult task is to build up the support for the unions’ role in other institutions, to strengthen and increase the number of settings in which the unions are established and accepted, and to increase the ‘stickiness’ of institutions underwriting union influence. The most important of these are multi-employer institutions. This includes not only conventional collective bargaining structures, but more specialist institutions, e.g. for training delivery, management of social security systems, arbitration and mediation services. There are, however, other productive areas for union attention, including regional political structures and significant social/ pressure groups. The development of regionalism in European political structures presents an opportunity for trade unions—there is considerable potential for an identity of purpose between unions and regional governments in the employment area, and the scope for building alliances which can help to institutionalize the unions’ role; in Germany and Spain there are already several examples of this. A similar case can be made for union alliances with other social groups, such as consumer organizations, the church, and environmental organizations, where coincidence of interest can be a source of mutual strength. Finally, legislative initiatives inevitably can have an important role to play in strengthening the context in which unions operate by being a source of procedures underwriting the position of the unions in society. Because of this, continuous union political involvement at national and EU level is essential. A current priority in this context must be to ensure the implementation of European Commission proposals on national-level information and consultation. The UK trade union movement, on the evidence of this research, has the most difficult environment of the countries studied. The absence to a large extent of multiemployer-union institutions and the legislative framework inherited from the 1980s ensure this. However, recent legislative initiatives sponsored by the new Labour government (however watered down), the emergence of stronger regional institutions, and an increased interest in the involvement of the social partners in occupational training, are all developments which should provide opportunities to the unions to reduce their exposure and construct a more supportive national context. Notwithstanding the problems faced by our respondents, the position of trade unions in the EU still looks considerably stronger than in other regions of the industrialized world. Models of labour market regulation in the US and the Pacific Rim have traditionally been much less interventionist on behalf of labour, or on the establishment of stable collective bargaining systems. Recent developments in these

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other regions have, if anything, weakened the capacity of trade unions to intervene industrially or politically on behalf of worker interests. European trade unions should, therefore, draw some encouragement from the stronger tradition in the EU of active state intervention in creating pluralist institutions which both encourage and strengthen trade unionism. The pursuit of labour market policies to create a skilled and educated workforce, the Social Chapter, and other aspects of the social programme of the EU, can be seen to consolidate a European model of labour market regulation which involves a social partnership model of industrial relations at both a political and enterprise level, granting both legitimacy and influence to trade unions. The continuance of this supportive EU context will be an important issue for the unions as they seek to adapt to their new environment.

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Index

Abbreviations have been used; see list at beginning of book on page xiii. Abbey Life 141 ABI 153 AC 42 ACAS 165, 171 Acquired Rights Directive 198, 208 ACRI 153 Addison, J.T. 82 AEB 154 AEEU 67 (Table 4.8); bargaining agenda 87; employer relationship 79; organization 68; political involvement 89; relations with membership 92–6, 94, 95, 96 AEU 95 agency workers 109 Alcatel: capital 55; EWC 98; global status 59; government strategy 77; individual contracts 74; sales 56 (Table 4.3); teleworking 88; works council elections 71 alliances, building 171–5, 220 Alonso, L.E. 26 Amper 55 Anderson, T. 141, 142, 146, 148, 153, 158 Anglo-Irish model 1, 2 APEX 67 (Table 4.8), 68, 95 APK 155 Apple 60 (Table 4.6)

apprenticeship 92, 167 arbitration 81, see also ACAS Argentaria 154 Armstrong, P. 184, 200 ASSICREDITO 153 Associated British Foods 106 (Table 5.2) ASTMS 95 AT&T 55 Australia: Organizing Works campaign 92; public management agenda 181; trade unions 186 Austria: bargaining 2; concertation 14 Baccaro, L. 90 Bacon, N. 18, 21 Baglioni, G. 7 Bamber, G.J. 7, 10, 14 Banca di Roma 167 Bang and Olufsen 55 banking xv, 138, 178–3; assets 142–6 (Table 6.4); bargaining agenda 163–73, 213; casualization 167; collective bargaining coverage 153–8, 212–20; concentration 142–6; decentralization 159–3; deregulation process 139–5; developments in information technology 144–8;

233

234 INDEX

direct banking 161–6; economic environment 139–5; employer relations 158–6, 213; employment trends 146–9 (Table 6.7); flexibility 168; future trends 146–50; global perspective 140 (Tables 6.1–3); impact of deregulation 142–9; industrial relations context 148–60; inter-union relations 174–80; job security 165–9; management human resource agenda 147–1; outsourcing 161–5; pay bargaining 163–8; political involvement 170–5, 213; problems faced by unions 156–60; productivity 143–7 (Tables 6.5, 6.6); recruitment and organization 172–8; supranational activity 176–2; trade union membership 151–5 (Table 6. 9); trade union organization 148–3 (Table 6. 8); trade union recognition 160–4; trade union relations with membership 172–80; trade union responses 157–82; training 168–3; world and European context 139 Barclaycall 162 Barclays 149 (Table 6.8), 151, 159, 175, 176 Bareham, J. 104, 105 bargaining, collective 46–49; agenda xv, 20–4, 214–2; agenda (banking) 163–73, 213; agenda (central government administration) 197–6, 213; agenda (electronics) 82–89; agenda (food manufacturing) 127–32, 136• 40; coverage (banking) 153–8; coverage (central government administration) 190–7 (Table 7.4); coverage (electronics) 72–7, 81• 4, 82– 89;

coverage (food manufacturing) 114–19, 136; decentralization 7, 14, 81• 4, 115, 136, 159–3, 153–7, 212; proportion of workforce covered by agreements 3; qualitative and quantitative demands 20 • 4, 35, 82–5, 214–2; TNE-level 33 Barilla 119, 128 BCH 143 BDA 48 Bean, R. 2, 14, 130 Beaumont, P.B. 196 Belgium: banking sector 140 (Table 6.3); ETUC policies 30; state involvement in industrial relations 2 Bender, K.A. 191 Bendiner, B. 10 BFAWU 111 (Table 5.4), 112 BG Bank 142, 153 BHV 143 BIFU 149 (Table 6.8); impact of outsourcing and direct banking 162; inter-union relations 175, 176; job security concerns 165, 166; organization 151; pay bargaining 164; political involvement 170–4, 178; position of women 146; recognition 160• 4; relations with membership 172, 173; supranational activity 177, 178 Boreham, P. 23 Bosch 53 Boxall, P. 17 Boyer, R. 17–18 Brewster, C. 14 Bridgford, J. 13, 14, 31, 33 Bull 60, 83 Bundnis 88 131, 171 business unions xvii, 1 Cadbury 124

INDEX 235

Cadbury-Schweppes 106 (Table 5.2) La Caixa 144 Canada: banking sector 140 (Table 6.1); public management agenda 181 Candy 81 Canon 60 (Table 4.6) career development 21, 22 casualization, banking sector 167, 169 CC.OO: banking sector 148, 149 (Table 6.8), 152 (Table 6.10), 160, 168–2, 170, 175; central government administration 186 (Table 7.2), 187, 204, 205, 206; electronics sector 67 (Table 4.8), 71, 79, 90–3, 93, 94–8; food manufacturing sector 111 (Table 5. 4); history 42; organization 42, 93, 175, 187; political involvement 42, 90–3; relationship with UGT 38, 94–8; strike activity 44, 94; works council elections 152 (Table 6.10) CDU 91, 202 Ceccini, P. 13 central government administration xv, 180– 6, 208–15; bargaining agenda 197–6, 213; collective bargaining coverage 190–7 (Table 7.4), 212–20; convergence in public management 181– 7; decentralizing responsibilities 182–8; economic context 181–90; employer relationship 194–197; industrial relations context 186–8; political involvement 201–8; problems faced by unions 191–8; reducing labour costs 183–90 (Table 7. 1); supranational activity 207–14; trade unions relationship with membership 203–13; trade union representativeness 188–5 (Table 7.3); trade union responses 193–208;

trade union structure and organization 186–3 (Table 7.2) Centre of Economic Performance 198 CEOE 48 CESI 188, 207–14 CFDT 30 CGIL: banking sector 148, 149 (Table 6.8), 173; central government administration 186 (Table 7.2), 202; electronics sector 88, 92; organization 41–5 CGM 65, 68 CGT 27 Christian Democrat Parties 131, 170 Christian Workers’ Committee, Germany 91, 202 CIG 42, 188 CISL 41, 95, 148, 149 (Table 6.8), 186 (Table 7.2) Citizen’s Charter, The 184, 198 Clarke, O. 5, 6 CNT 42 CO-Industry 68, 72, 90, 91, 94, 100, 111 COBAS 71, 92 Cockburn, C. 29 Coller, X. 137 Collective Agreement Act (1949), Germany 40 Commerzbank 160, 173 Commission for Racial Equality 165 Common Agricultural Policy 134 communication 64–6, 87, 200, 212 Communist Parties 27, 42, 90, 91 Compaq 60 (Table 4.6) computer networks 9 concertation 6, 210; failure of 11–12; in Spain 38 Confapi 73 Confederation of British Industry 78 Confindustria 48–2 Conservative Party, UK 91, 170, 212, 213 consultation 64–6 consumer preferences, changing 104 Continuity and Change 184 contracts:

236 INDEX

fixed-term 167, 199; flexibility 63; food manufacturing sector 109; individual 74, 87, 110, 148, 156, 179; part-time 76, 109, 167, 199; temporary 76, 109, 130, 167; training 199 convergence 3–6, 14, 14, 99, 210–21; in public management 181–7 cooperatives 118 Corby, S. 189, 197 Cornish, M. 184, 200 Council of Ministers 30 CPSA 187, 205–12 craft unions 3 Cressey, P. 144, 146, 146, 147 Crouch, C. 5, 7, 14, 19, 22, 25, 115 CSIF 186 (Table 7.2), 187, 188, 190, 204, 205, 207 CSU 187 Cunningham, R. 199 DA 38, 48, 153 DAG: banking sector 149 (Table 6.8), 151, 152, 155, 170, 174, 177; central government administration 186 (Table 7.2), 187, 190, 199, 205–12; electronics sector 68; membership 41, 190, 199; merger proposal 187, 206; political involvement 170 Danone 106 (Table 5.2), 120 DBB: central government administration 186 (Table 7.2), 187, 188, 190, 204; membership 41, 190, 204; political involvement 201; supranational activity 188, 207 DBL 148 Deery, S. 7 Deloitte Touche 141, 147 Delors, J. 13 Den Danske Bank 142 Denmark: banking sector 138, 139, 141–9 (Tables 6.4–7), 179;

bargaining agenda (banking) 165, 168–2; bargaining agenda (electronics) 84, 85, 87; bargaining agenda (food manufacturing) 127, 128, 129, 130, 137; collective bargaining 2, 47, 48, 100; collective bargaining (banking) 153; collective bargaining (central government administration) 213; collective bargaining (electronics) 72, 75, 76; collective bargaining (food manufacturing) 115–18, 117, 136; electronics sector 53 (Table 4.1), 55, 56 (Table 4.2), 61–3 (Table 4.7); electronics sector unions 67 (Table 4.8); employer relationship (banking) 158–2, 161–6, 213; employer relationship (electronics) 77, 81, 214; employer relationship (food manufacturing) 118–1, 120–3, 123, 125, 137; food distribution 107; food manufacturing 105 (Table 5.1), 106, 107 (Table 5.3), 108–12, 121; employers’ organizations 48; flexibility 64; food manufacturing 104; ideological orientation of unions 43; industrial conflict 49; industrial relations xiv; inter-union relations (banking) 174; legislation 40; political involvement 44; political involvement (banking 170; political involvement (electronics) 89, 90; political involvement (food manufacturing) 130; problems faced by unions in banking sector 156–60; problems faced by unions in electronics sector 76; problems faced by unions in food manufacturing sector 118; public management agenda 181; regulation 36;

INDEX 237

state involvement in industrial relations 2, 38, 40; strategic responses 218; supranational activity (banking) 176, 178; supranational activity (electronics) 97; supranational activity (food manufacturing) 134, 135; trade union confederation 42, 43, 111, 133, 212; trade union membership 45, 212; trade union membership (banking) 151– 5 (Table 6.9), 172, 176; trade union membership (electronics) 68, 71 (Table 4.9), 92, 93–7, 95, 96; trade union membership (food manufacturing) 113 (Table 5.5), 118, 133; trade union organization (banking) 148– 2 (Table 6.8); trade union organization (electronics) 67–68 (Table 4.8); trade union organization (food manufacturing) 110–14 (Table 5.4), 133; trade union recognition 40, 41; trade union responses to change 99, 212– 19, 218; works councils 133, 137 deregulation: banking sector 139–5, 179, 210; future trends in banking sector 146–50; impact in banking sector 142–9; US model 13 DF 111 (Table 5.4) DGB: banking sector 149–3 (Table 6.8), 170, 171; central government administration 186 (Table 7.2), 187, 206; ETUC role 29; membership 41; merger proposals 176, 206; political involvement 44, 170, 171; role 43, 48; shorter hours policy 167 Dickens, L. 199 Dickson, T. 65

Digital 56 (Table 4.3), 60 (Table 4.6) direct banking 144, 155, 156, 161–6 Dirstat-Confedir 196 distribution, food 106–9 divergence xvii–3, 14, 210–21 Doeringer, P.B. 182 DRL 148 DS 148 DsF 38 Due, J. 1 Dunlop, J.T. 3–4 EAL-UIL 134 Economic and Monetary Union 33, 78, 181, 197 Edwards, P. 36, 39 EEPTU 95 EICs 30, 31 EIRA 13–14 El-Agraa, A.M. 14 ELA-STV 42, 71, 188 electronics xv, 51–5, 99–3; bargaining agenda 82–89; collective bargaining coverage 72–7; economic environment 53–61; employer relationship 77–82, 213–1; employment 61–3; enhancement of human capital 66; European electronics in a world context 53–7; flexibility 61–5; globalization 55–59 (Tables 4.2–5); imports/exports 56 (Table 4.2); imports/exports by subsector 59 (Table 4.5); individualism v collectivism 64–8; industrial relations context 67–77; Japanese production in Europe 56 (Table 4.4); management human resource agenda 61– 9; political involvement 89–3; production methods 64; problems faced by unions 75–9; subsectoral differences 59–2; supranational activity 96–98;

238 INDEX

ten principal companies in European market 56 (Table 4.3); trade union organization and density 67– 71; trade union relations with membership 91–9; trade union responses 77–98 Elliott, F.E. 191 employee: councils 82; participation systems 3; see also works councils employers: organizations 2, 14, 28, 64, 82, 134; relations with xv, 212; relations with (banking) 158–6; relations with (central government administration) 194–197; relations with (electronics) 77–82, 213– 1; relations with (food manufacturing) 118– 8, 134, 213–1 employment: banking sector 146–9 (Table 6.7); central government administration 183– 90 (Table 7.1); electronics sector 61–3 (Table 4.7); food manufacturing sector 107 (Table 5. 3) Engels’ Law 104 enterprise-level focus 19–2, 35; banking sector 159–3; electronics sector 72, 73, 81 environmental protection 206, see also Green Party EPSU 178, 187, 207–14 equal opportunities 22, 169, 199–6, 215 ERECO 104 Ericsson 55, 59 Eridania Beghin-Say 106 (Table 5.2) ethnic minorities 25, 165, 215, see also racial discrimination ETUC 14, 27–31, 33; banking sector 177; central government administration 187, 207; electronics sector 97–1 EU:

constitution 29; food industry 103–6; food manufacturing employment 107 (Table 5.3); impact on national economies 27; ‘Social Europe’ 1; Social Programme 13–14; trade union role 97; UK attitudes 39 Euro-Fiet 177 European Central Bank 139 European Centre of Enterprises with Public Participation 207 European Commission 13, 14, 29, 101, 105, 142, 207, 221 European Court 178 European Industrial Relations Observatory 14 European Monetary Union 33, 78 European Parliament 30, 89, 98, 178, 207– 14 EWCs 14, 14, 21, 31–5, 212, 216; banking sector 177–2; electronics sector 97–1; food manufacturing sector 119, 134–8 FA 148, 153 FABI 149 (Table 6.8) Fagan, C. 191, 200 Fairbrother, P. 199 FALCRI 149 (Table 6.8) FAT 111 (Table 5.4) FDA 184, 204, 206 FDI 108–11, see also investment FEBA 148, 149 (Table 6.8), 170, 172, 173, 175, 177 Federation of the Electronics Industry 54 Federmeccanica 74 Ferner, A. 7, 9, 12, 14, 37, 38 Ferrero 128 FeS 148, 149 (Table 6.8), 171, 172, 173, 175 FeS-UGT 146, 148, 149 (Table 6.8), 152 FIBA 148, 149 (Table 6.8) FIBA-CISL 149 (Table 6.8) FIM-CISL 67 (Table 4.8)

INDEX 239

Financial Services Act (1986), UK 141 financial services packages 26–9, 92, 174 Finansforbundet 149 (Table 6.8); collective bargaining coverage 153, 159; direct banking 162; organization 148; political involvement 170; position of women 146; supranational activity 178 Findlay, P. 71, 75 Finland, bargaining 2 FIOM-CGIL 67 (Table 4.8), 80 First Direct 162 FISAC 148, 149 (Table 6.8) FISAC-CGIL 149 (Table 6.8) Fischbach-Pyttel, C. 187, 207, 208 Fishman, R. 50n FITC 149 (Table 6.8), 175 FLAI 111 (Table 5.4) flexibility: banking sector 147, 168, 169; bargaining agenda 84–7, 168; electronics sector 61–5, 84–7; food manufacturing sector 109–12, 126, 129–2; strikes against 126; workforce 7, 11; working practices 22 Flynn, N. 182 FO 30 Food Manufacturers Group Joint Industrial Council 115 food manufacturing xv, 101, 136–40; bargaining agenda 127–32; changing consumer preferences 104; collective bargaining coverage 114–19; distribution 106–9; economic environment 103–11; employer relationship 118–8, 213–1; employment 107; European context 103–6; global environment 103; imports/exports 105 (Table 5.1); industrial relations context 110–20; leading food and drink groups 106 (Table 5.2); management human resource agenda 109–12;

political involvement 130–5; problems faced by trade unions 117–20; relations with membership 132–7; structure of industry 105–8; supranational activity 134–8; trade 104–7; trade union organization and density 110–16; trade union responses 118–39 Ford 78 Fordism 6, 10–11 FP-CGIL 186 (Table 7.2) FPI-CISL 186 (Table 7.2) framework agreement 29–2, 72, 154 France: banking sector 140 (Tables 6.1, 6.3), 146; concertation 12; ETUC policies 30; food manufacturing 104; public management agenda 181; state involvement in industrial relations 2; trade unions’ responses to change, 3, 18; welfare unions 1 Franco, F. 42, 45 Freeman, R.B. xvii, 189 FSAP-CC.OO 186 (Table 7.2), 187, 190 FSP-UGT 186 (Table 7.2), 187 FTF 42 Fujitsu 60 (Table 4.6), 64 Future of Public Services, The 202 Gall, G. 151, 151, 158, 159, 174 Gallie, D. 189 GATT 105, 108 gender differentiation 22; union membership 71; see also equal opportunities, women Germany: banking sector 138, 139–4 (Tables 6.1– 3), 142–9 (Tables 6.4–7), 218; bargaining agenda (banking) 163–70, 169; bargaining agenda (central government administration) 198–6;

240 INDEX

bargaining agenda (electronics) 83, 84, 85–8, 87; bargaining agenda (food manufacturing) 127, 128, 130; central administration unions 186 (Table 7.2); central government administration 180– 6, 183, 184–90 (Table 7.1), 209; collective bargaining 47–1, 100; collective bargaining (banking) 155; collective bargaining (central government administration) 190–6, 213; collective bargaining (electronics) 72–5, 75; collective bargaining (food manufacturing) 114–17, 117, 136; debate on future of unions 25; electronics sector 53–6 (Table 4.1), 56 (Table 4.2), 61–3 (Table 4.7); electronics sector unions 67 (Table 4.8); employer relationship (banking) 158–6, 213; employer relationship (central government administration) 194–195, 197; employer relationship (electronics) 77– 78, 81–4, 214; employer relationship (food manufacturing) 119, 121–4, 123, 125, 137; employers’ organizations 48, 64–7; flexibility 64; food distribution 107; food manufacturing sector 104, 105 (Table 5.1), 106, 107 (Table 5.3), 108– 12; formalization of industrial relations 33; IBM non-union policy 65; ideological orientation of unions 43; industrial conflict 49; industrial relations system xiv, 37–1; inter-union relations (banking) 174–80, 179; Japanese electronics production facilities 56 (Table 4.4); legislation 40, 41; local administration 182; model of trade unionism 35;

multinationals 32; outsourcing 63; political involvement 44; political involvement (banking) 170, 171; political involvement (central government administration) 201–8; political involvement (electronics) 89–2, 91; political involvement (food manufacturing) 130–4; political unionism 23; problems faced by unions in banking sector 156–60; problems faced by unions in central administration 191–8; problems faced by unions in electronics sector 76; problems faced by unions in food manufacturing sector 117–20; public management agenda 181; regulation 36; social partners 1; state involvement in industrial relations 1–2, 37–1; strategic responses 218; supranational activity 34; supranational activity (banking) 176–2; supranational activity (central government administration) 207; supranational activity (electronics) 97–1; supranational activity (food manufacturing) 134, 135; trade union confederations 41, 42–6, 212; trade union membership 26, 45, 46, 215; trade union membership (banking) 151– 5 (Table 6.9), 172–8, 176; trade union membership (central government administration) 188–5 (Table 7.3), 204–12; trade union membership (electronics) 68, 70 (Table 4.9), 92, 93, 94, 96; trade union membership (food manufacturing) 113 (Table 5.5), 117, 132, 133;

INDEX 241

trade union organization (banking) 148– 3 (Table 6.8); trade union organization (central government administration) 186–3 (Table 7.2); trade union organization (electronics) 67–68 (Table 4.8); trade union organization (food manufacturing) 110–13 (Table 5.4), 133; trade union recognition 40, 41, 64–7; trade unions’ responses to change, 3, 18, 25, 99, 212, 218; works councils 71–3, 110, 114, 121–4, 133, 137, 152, 188 Gesamtmetall 64, 65 GHK 94 globalization 9–10, 210; banking 139 (Tables 6.1–3); electronics 55–59 (Tables 4.2–5); food manufacturing 103 GMB 22; electronics sector 68, 87, 93, 94, 95; food manufacturing sector 111 (Table 5. 4), 112, 124 GMB/APEX 67 (Table 4.8), 68 Goetschy, J. 14, 28 Gourevitch, P. 2 GPT 66, 68 Grahl, J. 7, 8, 11, 13, 28, 34 Grand Metropolitan 106 (Table 5.2) Grasmann, P. 143 Greece: public management agenda 181; state involvement in industrial relations 2 Green Party, Germany 131, 171 GTB 94 Gual, J. 142 Guinness 106 (Table 5.2) Gunnigle, P. 66

Hantrais, L. 13 harmonization programme, EC 13 Haynes, P. 17 HBV: collective bargaining coverage 155; inter-union relations 175, 176; membership 152; organization 149–3 (Table 6.8), 160; political involvement 171; relations with membership, 173, 174; supranational activity, 177 health and safety 22 Heery, E. 26, 95–9 Hegewisch, A. 14 Henderson, D.R. 103 Henneberger, F. 188, 207, 208 Hewlett Packard 56 (Table 4.3), 60 (Table 4. 6), 66 Hiltrop, J.M. 3, 7 Hitachi 56 (Table 4.3), 61 HK 67 (Table 4.8), 111 (Table 5.4) Hoffman, J. 25, 29 Hollinshead, G. xvii, 1, 7 homeworkers 92, see also teleworkers Honeywell 64 Hood, C. 181 hours: bank opening 156; flexibility 63, 64, 85, 126, 156, 168; shorter 86, 128, 130, 167; see also overtime, part-time HRM practices 21, 122–7, 136–40, 212–19 Hyman, R.: (1991) 19, 24, 26; (1992) 11; (1994) 20, 21, 201; (1994a) 189; (1996) 16, 18; Ferner and (1992) 7, 9, 12, 14, 37, 38; Ferner and (1998) 14

Halifax building society 141 Hall, M. 34 Hall, R. 23 Handy, C.R. 103 Hansen, L.L. 15

IBM: Motorola alliance 61; sales 56 (Table 4.3), 60 (Table 4.6); teleworking 88; union policy 65–8, 73, 76, 162

242 INDEX

ICL 64, 68 ideology, role of 4, 43–7 IDS 64, 74, 85, 193, 198 IG Metall: collective bargaining coverage 72, 191; electronics sector 67 (Table 4.8), 68; employer relationship 65, 66, 77–78, 80; membership 70, 71, 94, 176; political involvement 91; relations with membership 92, 94; response to change 18; shorter hours policy 86; supranational activity 97–1; works council delegates 71 ILO 10, 26 individualism v collectivism: banking sector 147–1; electronics sector 64–8, 75–8; food manufacturing sector 110 industrial conflict 49, see also strike activity information technology, developments 144– 8 Institute of Electrical Engineers 93 Inter-regional Trade Union Councils 29, 30 inter-union relations, banking sector 174–80 International Confederation of Free Trade Unions 30 International Trade Secretariats 30, 97–1 Intersind 73 interventionists 3 interviews xv–xvi investment: electronics sector 58, 76, 85; food manufacturing sector 106; see also FDI IPD 20 IPMS 184, 186 (Table 7.2), 190, 204, 204, 206, 208 IPMS-TUC 186 (Table 7.2) Ireland: concertation 14; electronics sector 66; state involvement in industrial relations 2 IRS 27, 64, 66, 115 IRSF 187 Italacque 120

Italtel 54, 83 Italy: banking sector 138, 139, 140 (Tables 6. 1–3), 142–9 (Tables 6.4–7), 179; bargaining agenda (banking) 164–71; bargaining agenda (central government administration) 198–4; bargaining agenda (electronics) 83, 84, 87, 88; bargaining agenda (food manufacturing) 127, 128, 130; central administration unions 186 (Table 7.2); central government administration 180, 183–90 (Table 7.1), 209; collective bargaining 47, 100; collective bargaining (banking) 153–7; collective bargaining (central government administration) 190–7, 213; collective bargaining (electronics) 73–6; collective bargaining (food manufacturing) 116–19, 136; Constitution (1948) 40; electronics sector 53 (Table 4.1), 54, 56 (Table 4.2), 61–3 (Table 4.7); electronics sector unions 67 (Table 4.8); employer relationship (banking) 158–6; employer relationship (central government administration) 194–196; employer relationship (electronics) 77, 78, 80, 81, 214; employer relationship (food manufacturing) 119–2, 123, 125, 137; employers’ organizations 48–2; ETUC policies 30; flexibility 64; food manufacturing sector 104, 105 (Table 5.1), 106, 107 (Table 5.3), 108– 11, 110; ideological orientation of unions 43; industrial conflict 49; industrial relations system xiv, 37; inter-union relations (banking) 175; Japanese electronics production facilities 56 (Table 4.4); legislation 40• 4; model of trade unionism 35; political involvement 22–5, 44;

INDEX 243

political involvement (banking) 170, 171; political involvement (central government administration) 201–8; political involvement (electronics) 89, 91; political involvement (food manufacturing) 131; problems faced by unions in banking sector 156–60; problems faced by unions in central administration 191–8; problems faced by unions in electronics sector 75, 76; problems faced by unions in food manufacturing sector 117–20; public management agenda 181; state involvement in industrial relations 2, 38–2, 40–4; strategic responses 218; supranational activity (banking) 176–1, 178; supranational activity (central government administration) 207; supranational activity (food manufacturing) 135; trade union confederations 41–5, 43, 114; trade union membership 45, 46, 215; trade union membership (banking) 151– 5 (Table 6.9), 172–8; trade union membership (central government administration) 188–5 (Table 7.3), 205–13; trade union membership (electronics) 68, 70–2 (Table 4.9), 92, 93, 95, 96; trade union membership (food manufacturing) 113 (Table 5.5), 117, 132, 133; trade union organization (banking) 148– 2 (Table 6.8); trade union organization (central government administration) 186–3 (Table 7.2); trade union organization (electronics) 67–68 (Table 4.8);

trade union organization (food manufacturing) 111 (Table 5.4), 133; trade unions’ responses to change, 3, 99, 212, 218; trade union recognition 40–4; training arrangements 87; welfare unions 1; works councils 71–3 (Table 4.10), 114, 188 Jacobi, O. 152 Japan: banking sector 140 (Table 6.1); bargaining 2; business unions 1; electronics 53, 54, 60; electronics production in Europe 56 (Table 4.4); food manufacturing 103; public management agenda 181; trade union recognition 66 Jeffreys, S. 21, 25 job losses, banking sector 156–60, 179 job security 84, 88; agreement 85; banking sector 165–9, 169 Joint Industrial Councils (JICs) 115, 122 just-in-time: delivery 129; production 64, 129 KAD 67 (Table 4.8), 111 (Table 5.4) Keller, B. 188, 207, 208 Kelly, J. 8, 26, 95–9 Kerr, C. 4 Keynesian policies 28 Kistler, A. 23 Klages, H. 183 Kochan, T.A. 19 Labour Force Survey: (1996) 71; (1997) 45, 74, 151 Labour Party, UK 17, 26, 39, 43–7, 221; banking sector unions 170, 213; central government administration unions 196, 203;

244 INDEX

electronics sector unions, 89, 90; food manufacturing unions 130 Lane, J.E. 181 Lansbury, R.D. 7, 10, 14 Larson, R. 10 Latin America 158, 177 Lawlor, T. xvi, 90 Lázaro Lafuente, M. 53 Leat, M. xvii, 1, 7 Lecher, W. 7 legislation, industrial relations: Denmark 38; Germany 37–1; Spain 39–3; UK 37, 39, 221 Leisink, P. 14, 14, 16, 20, 158 Lewis, S. 199 LGU 149 (Table 6.8), 151 Llewellyn, D. 147 Lloyds 149 (Table 6.8), 151, 171, 176 LO 38, 42, 43, 111, 115, 153 lobbying 27–28 Locke, R. 26 Locke, R.M. 90 Loffler, E. 183 Luxembourg: banking sector 140 (Table 6.3); state involvement in industrial relations 2 Maastricht Treaty (1991) 13, 29, 33, 129 McHugh, A. 17 management human resource agenda 21; banking sector 147–1; electronics sector 61–9; food manufacturing sector 109–12, 136 • 40 management techniques 87–88, 89, 122–5 managers, specialist 146, 155, 156 Manpower 173 Marconi 64 Marginson, P. 33, 137 market constraints 3 Marks and Spencer 141 Marsden, D. 189 Martin, B. 182 Martínez Lucio, M. 32, 33, 98

Marxism 4 Matsushita 56 (Table 4.3), 59 maximalists 2–3 membership, trade union: banking sector 151–5 (Table 6.9); central government administration 188– 5 (Table 7.3); electronics sector 67–71, 91–9; food manufacturing sector 110–16; levels of membership 3, 7, 12, 44–9, 215; membership needs 24–9, 215; recruitment 92, 132, 215; relations with xv, 215; relations with (banking) 172–80; relations with (central government administration) 203–13; relations with (electronics) 91–9; relations with (food manufacturing) 132– 7, 137 Mercedes 78 mergers, trade union 95, 175–80, 187, 205– 12, 212 Metal 67 (Table 4.8) Microsoft 60 (Table 4.6) Midland Bank 151, 155, 162 Miguélez, F. 204 Millward, N. 74 Minzberg, H. 17 Miralles de Imperial Hornedo, L. 59–1 Motorola 61, 64, 66 MSF: bargaining agenda 87; derecognition 151; employer relationship 124; merger proposal 206; organization (electronics) 67–68 (Table 4.8); organization (food manufacturing) 111 (Table 5.4); relations with membership 92, 93, 94, 95, 96 Muckenberger, U. 26 Muller, M. 155 Müller-Jentsch, W. 151, 155, 158, 166 multi-employer agreements 72, 74 multinationals 32, 60, 134

INDEX 245

NACE 137n NAG 178 National Labour Relations Board, US 24 NatWest 149 (Table 6.8), 151 NEC 61 neo-corporatism 6, 210 Nestlé 106 (Table 5.2), 126 Netherlands: banking sector 140 (Table 6.3); bargaining 2; concertation 14; local administration 182; state involvement in industrial relations 2 Neven, D. 142 New Zealand: public management agenda 181; trade unions, 178, 204 NFF 135 NGG 111 (Table 5.4), 121–4, 130, 130–4, 132 NIDIL 92 Niland, J.R. 14 NNF 111 (Table 5.4), 130, 134 Nordic: model 1, 2; trade unions 34, 134 Nordic Banking Union 176, 178 Norway, bargaining 2 Norwich Union 141 NUBE 151 NUCPS 187, 204, 205–12 NUI 206 NWSA 149 (Table 6.8), 151, 172, 176 Observer 124 OECD 45, 106, 181, 184, 185 officials, union 25, 35, 123–6, 133, see also shop stewards offshore banks 160 Olivetti 60, 80, 83 organization, trade union 212; banking sector 148–3 (Table 6.8), 172– 8; central government administration 186– 3; electronics sector 67–71, 92–9;

food manufacturing sector 110–16 Oswald, R. 23, 26 ÖTV: bargaining agenda (banking) 164; bargaining agenda (central government administration) 199, 200, 201; collective bargaining coverage 155; employer relationship 194, 195; inter-union relations 175; membership 190; merger proposal 187, 206; organization (banking) 149–3 (Table 6. 8), 152; organization (central government administration) 186–2 (Table 7.2); political involvement (banking) 170, 171; political involvement (central government administration) 201–7; recognition 193; relations with membership (banking) 173; relations with membership (central government administration) 204, 204, 205, 206, 209; representativeness 188; supranational activity (banking) 177, 178; supranational activity (central government administration) 207 ÖTV-DGB 186 (Table 7.2) outsourcing 63, 66, 76, 80, 161–5 overtime 128, 130, 168 PA-UIL 186 (Table 7.2) Pacific Rim 13, 14, 221 Panasonic 59, 68, 92 Panitch, L. 6 Parmalat 128 part-time work 76, 109, 146, 167, 198 participation 64 partnership-oriented focus 19–2 pay issues: banking sector 147, 163–8; bargaining agenda 35, 215; central government administration 190– 7 (Table 7.4);

246 INDEX

electronics sector 75–8, 83–6; flexibility 63–5; food manufacturing sector 110; incentive schemes 83–6; national minimum wage 130; performance-related pay see PRP; public sector restraint 183; reward systems 147 PCE 42 PCS 186 (Table 7.2), 187, 189, 199, 204, 206, 208, 209 PDS 91 Philips 56 (Table 4.3), 59, 60, 61, 66 Piore, M.J. 19 Pizzorno, A. 5 PNV 42 political relations: banking sector 170–5, 213; central government administration 201– 8; electronics sector 89–3; food manufacturing sector 130–5, 137; political involvement 22–6; political unionism 23; union links with political parties 43–7; weakening of political influence 7 Poole, M. 4, 14 Popular Party, Spain 91, 100, 203 Portugal, concertation 14 post-Fordism 10–11 power: centralization of 10; distribution of 3–4 Prieto Cuerdo, L. 59 problem solving 20 Proctor, S.J. 63 production methods, electronics sector 64 productivity 22; banking sector 143–7 protest: social-protest movements 12; worker 4 PRP: banking sector 147, 163, 164; electronics sector 63–6, 75, 76, 79, 84, 87; food manufacturing sector 110 PSI 208

PSOE 38, 42, 44 PSV 174 PTC 187, 202, 203, 205 Public Function Statute (1998), Spain 201, 203 public sector unions 8 qualitative bargaining agenda 20–4, 35, 82– 89, 130 quality: circles 11, 64, 87, 200; issues 22 R&D 22; electronics investment 58, 76; high levels 64 racial discrimination 22, 165, see also ethnic minorities Rainbird, H. 22 Ramsay, H. 32 Rath, F. 30, 31 Rato, R. 33 Reardon, G. 144 recognition, union 39–4; banking sector 160–4; central government administration 193 recruitment 212; banking sector 172–8, 176; electronics sector 66; trade union membership 92, 132 redundancies 128, 165–9, 184, 193, 198, see also job losses, job security, retirement Regini, M. 5, 7, 12, 19, 21 regulation of trade unions 36–39 retirement: early 128, 166; transition to 85–8 revolt from below 5–6, 210 Ricoh 60 (Table 4.6) Rigby, M. xvi, 90 Rodríguez, J.C. 141, 154, 168, 175 Roman-Germanic model 1–2 RSA 41 RSU 119, 154, 173, 175 Rubery, J. 191, 200 Sainsbury’s 141

INDEX 247

Sapper, S. 92 Scandinavia: ETUC policies 31; social partners 1 Scheuer, S. 72, 148, 151, 153 Schulten, T. 32, 33, 34 Scott, A. 123 Scott, P. 144, 146, 147 SCPS 187 SDC 161 SEA (1987) 13 self-employed 92 September Compromise, Denmark 38, 40 Serrano del Rosal, R. xvi Shalev, M. 196 Sharp 59 shiftwork 130 shop stewards 117, 123–6, see also officials SIC 51, 137n, 138 SiD 67 (Table 4.8), 111 (Table 5.4) Siemens: capital 59; global status 53–6, 60, 61; outsourcing 63; PRP 64; sales 56 (Table 4.3); state role 77; Toshiba alliance 61; union membership 68; union policy 64, 66, 80 Siemens Nixdorf 60 Single European Market 106, 108, 139 Sintel 83 Sisson, K. 14, 33 skills: banking sector 168–2; electronics sector 63, 66; food manufacturing sector 109; low levels 9; multi-skilling and cross-skilling 63, 84–7; needs 3; obsolete 9 small firms 215–3, 219 SMEs 33 Smith, R. xvi Social Chapter: impact of 13, 39, 121, 129, 137, 221;

voting 29 Social Charter 13, 134 Social Democratic Party, Denmark 91 social partners xvii, 1, 13, 14 Social Programme (EU) 13–14 Socialist Parties, 90, 91, 125, 131, 170 Sogei 71 Sony 56 (Table 4.3) Spain: banking sector 138, 139, 140 (Tables 6. 1–3), 141, 142–9 (Tables 6.4–7); bargaining agenda (banking) 163–73; bargaining agenda (central government administration) 198–4; bargaining agenda (electronics) 83–6, 86, 87; bargaining agenda (food manufacturing) 127, 129, 130; central administration unions 186 (Table 7.2); central government administration 180– 6, 183–90 (Table 7.1), 209; collective bargaining 47; collective bargaining (banking) 154, 179; collective bargaining (central government administration) 190–7; collective bargaining (electronics) 74, 212; collective bargaining (food manufacturing) 116, 117, 136; concertation 12, 14, 38; Constitution 40; electronics sector 53 (Table 4.1), 55, 56 (Table 4.2), 61–3 (Table 4.7); electronics sector unions 67 (Table 4.8); employer relationship (banking) 158–6; employer relationship (central government administration) 194–197; employer relationship (electronics) 77, 79, 80–3, 82; employer relationship (food manufacturing) 119, 125–8, 137; employers’ organizations 48; flexibility 64; food distribution 107;

248 INDEX

food manufacturing sector 104, 105 (Table 5.1), 106, 107 (Table 5.3), 108– 12; IBM non-union policy 65; ideological orientation of unions 43; industrial conflict 49; industrial relations system xiv, 36–37, 50; inter-union relations (banking) 175; Japanese electronics production facilities 56 (Table 4.4); legislation 39–3, 41; political involvement 44, 214; political involvement (banking) 170, 171; political involvement (central government administration) 201–8; political involvement (food manufacturing) 131; problems faced by unions in banking sector 156–60; problems faced by unions in central administration 191–8; problems faced by unions in electronics sector 76; problems faced by unions in food manufacturing sector 118; public management agenda 181; supranational activity (banking) 176–1; supranational activity (central government administration) 207; supranational activity (food manufacturing) 135; trade union confederations, 42, 43, 112, 114, 212; trade union membership 45–9, 50; trade union membership (banking) 151– 5 (Table 6.9), 172–8, 176, 179; trade union membership (central government administration) 188–5 (Table 7.3), 204–13; trade union membership (electronics) 68, 70–2 (Table 4.9), 92–5, 93, 94–9; trade union membership (food manufacturing) 113 (Table 5.5) 132, 133; trade union organization (banking) 148– 2 (Table 6.8);

trade union organization (central government administration) 186–3 (Table 7.2); trade union organization (electronics) 67–68 (Table 4.8), 99–3; trade union organization (food manufacturing) 111–14 (Table 5.4), 133; trade union recognition 39–3, 41, 50, 65–8, 161; trade union responses 219; training agreement 80, 87; welfare unions 1; works councils 71–3, 114, 152 (Table 6. 10), 188 Sparrow, P. 3, 7 SPD 44, 90, 91, 130–4, 170, 202 Sperling, H.J. 151, 155, 158, 166 Starlux 126 state: involvement in industrial relations 1–2, 37–1; role in electronics sector 76–9; role of 37–1; sponsorship of unions 5 steel industry 18 STET 85 Stirling, J. 13, 14, 31, 33 Storey, J. 146, 147 strategy, concept of 16–17 Streeck, W. 7, 11, 12 Strehl, F. 182 strike activity: decline 7, 81, 159; Denmark 126; Germany 126, 159, 197; incidence 49; increase 159; Italy 37, 159, 196; Spain 44, 159, 196–2; UK 159, 196–2 subscriptions 118 subsidiarity 15 supranational: activity xv, 27–34, 35–8, 216; activity (banking) 176–2;

INDEX 249

activity (central government administration) 207–14; activity (electronics) 96–98; activity (food manufacturing) 134–8, 137; institutions 14 Sweden: bargaining 2; membership levels 12; political unionism 23; state involvement in industrial relations 2; trade unions’ responses to change, 3 Switzerland: banking sector 140 (Table 6.1); bargaining 2 Taking Forward Continuity and Change 184 TASS 95 Tate and Lyle 106 (Table 5.2) Teague, P. 7, 8, 11, 13–14, 28, 34 teamworking 64, 87, 110, 200, 212 technology 3, 9, 11; electronics 58; food manufacturing industry 129, 136 teleworking 88, 162, 199, see also direct banking Terry, M. 22 tertiarization 8–9 Tesco 141 TGWU 111 (Table 5.4), 112, 124 Thompson, D. 10 Thomson 56 (Table 4.3), 59, 60, 61, 98 Thornley, C. 146, 148 TNE 31, 33, 178 Toshiba 59, 61 Touraine, A. 12 TQM 11 trade, foreign 104–7 Trade Secretariats 30, 97–1 Trade Union Freedom, Law of (1985), Spain 40 Trade Union Movement Against the European Union 97 trade unions: bargaining patterns 2, 20–4; contemporary role 214–4;

decline 7; enterprise-level focus 19–2; federations 2, 28–1, 41–6, 220; financial problems 118; ideological orientation 43–7; implications for 220–8; membership levels 3, 7, 12, 44–9; orientations xvii–1; political involvement 22–6, 89–3; reasons for joining 27; recognition 39–4; regulation 36–39; relations with membership 215–3; representatives 35; responses to change 2–3, 16–19, 34–8; responsiveness to member and constituency needs 24–9; strategic responses 217–6; structure 3, 41–6; supranational activity 216 training and development 21, 212, 215; banking sector 146, 168–3; central government administration 200; electronics sector 84–7, 86–9, 89; food manufacturing sector 128–1; Spanish agreement 80 Traxler, F. 14, 15, 18 Tripartite Agreement (1993), Italy 47, 89, 188, 201 Tripartite National Agreement on Continuous Training, Spain 80, 87, 169, 169 TSB 171 TUC: banking sector 151, 171, 173, 176; central government administration 186 (Table 7.2), 206, 208; employer relationship 78, 122; ETUC relations 28, 29, 30; European policy 134, 208; Organizing Academy 172; Report (1994) 19–2, 21; structure and organization 41 TUPE 162, 198 UCW 22 UGT:

250 INDEX

collaboration 38, 94–8, 205; flexibility survey 168; history 42; mergers 175; organization 42; organization (banking) 148–2 (Table 6. 8), 204; organization (central government administration) 186–2 (Table 7.2); organization (electronics) 67 (Table 4.8), 95; organization (food manufacturing) 111 (Table 5.4); political involvement 38, 90; strike activity 44, 94; works council delegates 71, 152 UIB 148, 149 (Table 6.8) UIL: employer relationship 78; organization 41–5; organization (banking) 148–2 (Table 6. 8); organization (central government administration) 186 (Table 7.2); organization (food manufacturing) 111 (Table 5.4) UILA 111 (Table 5.4) UILM-Uil 67 (Table 4.8) UK: banking sector 138, 139–4 (Tables 6.1– 3), 143–9 (Tables 6.4–7); bargaining agenda (banking) 163–72; bargaining agenda (central government administration) 198–5; bargaining agenda (electronics) 83–7, 86, 88; bargaining agenda (food manufacturing) 127, 128, 130; central administration unions 186 (Table 7.2); central government administration 180, 182–90 (Table 7.1), 208–15, 212; collective bargaining 2, 46, 47, 49; collective bargaining (banking) 155, 178; collective bargaining (central government administration) 190–7; collective bargaining (electronics) 74–7;

collective bargaining (food manufacturing) 114–17, 117, 136; electronics sector 53 (Table 4.1), 54, 56 (Table 4.2), 61–3 (Table 4.7); electronics sector unions 67 (Table 4.8); employer relationship (banking) 158–6, 213; employer relationship (central government administration) 194–197; employer relationship (electronics) 78–1, 80, 81, 82, 214; employer relationship (food manufacturing) 118, 119, 122–7, 136; employers’ organizations 48; ETUC policies 30; flexibility 64, 109; food manufacturing sector 104, 105 (Table 5.1), 106, 107 (Table 5.3), 108– 12; IBM non-union policy 65; ideological orientation of unions 43; industrial conflict 49; industrial relations system xiv, 36, 49–3; informal networks 33; inter-union relations (banking) 174–80, 179; Japanese electronics production facilities 56 (Table 4.4); legislation 37, 39, 221; multinationals 32; political involvement 22–5, 214; political involvement (banking) 170–5; political involvement (central government administration) 201–8; political involvement (electronics) 89, 90, 91; political involvement (food manufacturing) 130; problems faced by unions in banking sector 156–60; problems faced by unions in central administration 191–8; problems faced by unions in electronics sector 75; problems faced by unions in food manufacturing sector 117–20;

INDEX 251

public management agenda 181; state involvement in industrial relations 2, 37, 39; supranational activity (banking) 176–2; supranational activity (central government administration) 207; supranational activity (electronics) 97, 98; supranational activity (food manufacturing) 134, 135; trade union confederation 41, 43, 212; trade union membership 45, 49–3, 215; trade union membership (banking) 151– 5 (Table 6.9), 172–8, 176; trade union membership (central government administration) 188–5 (Table 7.3), 203–13; trade union membership (electronics) 68, 70 (Table 4.9), 92–7, 95–9; trade union membership (food manufacturing), 112–15 (Table 5.5), 117, 132–6; trade union organization (banking) 148– 3 (Table 6.8); trade union organization (central government administration) 186–2 (Table 7.2); trade union organization (electronics) 67–68 (Table 4.8), 99–3; trade union organization (food manufacturing) 110–13 (Table 5.4), 133; trade union recognition 39, 41, 49, 64, 65, 160–4, 193; trade unions’ responses to change, 3, 18, 212–19, 219 Underwood, R. 14 Undy, R. 17 unemployment 9, 26 Unibank 142 UNICE 28, 29 UNiFI: direct banking 162; insurance package 174; inter-union relations 175, 176; organization 149–3 (Table 6.8); political involvement 171; recognition 160;

relations with membership 172 Unilever 106 (Table 5.2), 135 US: banking sector 140 (Table 6.1); bargaining 2; business unions 1; deregulation 13; dominance 14; electronics 53, 54; employer relations 123; food manufacturing 103; labour market 221; literature 35; public management agenda 181; trade unions’ responses to change, 3, 23– 6, 92 USDAW 105, 111 (Table 5.4), 112, 124 USO 42 Valkenburg, B. 24 Van Ruysseveldt, J. 14 Vesala, J. 139 Vilrokx, J. 26 Vincent, C. 22 Virgin 141 Visser, J. 7, 8, 14 voluntarism 39, 41, 91 voting rights 29 VW 78 Waddington, J. 21, 26, 163, 174, 199, 204 welfare unions xvii–1 Weston, S. 32, 33, 98 Wever, K.S. 160, 173 white-collar: emergence of new groups 6; public sector unions 8; staff attitudes 21–4; work 8 Whitston, C. 26, 163, 174, 204 Windolf, P. 19 WIRS 74 women: in banking labour force 146; in central government administration 180, 199–5; membership 71, 215;

252 INDEX

working conditions 25, see also gender work-sharing 85 Workers’ Statutes: Italy (1970) 41; Spain (1980) 40 works councils: elections 71–3 (Table 4.10), 152 (Table 6.10), 188; role 72, 77–78, 81, 110, 112, 114, 119, 121–4, 133, 136, 137 World Bank 10 World Economic Outlook (1997) 55 World Yearbook of Electronics Data (1998) 54 WTO 10 Xerox 60 (Table 4.6) young people 9, 12, 25, 76, 172, 215 Zoll, R. 24, 26