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World Labour Report 1997-98
Industrial relations, democracy and social stability

Preface

Labour relations between heads of enterprise and their associations, workers in trade unions and sometimes the public authorities traditionally perform the economic function of participating in the production and distribution of the fruits of growth. But they also perform two other functions, one democratic (giving workers a say at the workplace), the other social (ensuring that everyone in work or seeking employment is integrated into society). As the century draws to a close, we might ask whether they are still performing these functions satisfactorily, at a time when the pace of immense political, economic and social change has suddenly rushed ahead? This report seeks to elucidate that question by presenting significant facts and indicators, analysing them and highlighting future trends.

Various questions spring to mind, for example, regarding the relevance today of bilateral or trilateral collective labour relations. Do bipartite or tripartite agreements, such as those of the 1960s or 1970s, still have a future when the main concern of the industrialized countries is no longer so much a question of living and working conditions as of job creation and employment stability? This is all very reminiscent of an issue that has long been raised in connection with developing countries: is collective dialogue still an essential part of labour relations if it is no longer able to take full account of the segmentation of the labour market, the growth of precarious forms of employment, unemployment and social exclusion?

The three social partners need to come up with some answers. First, there are the public authorities, whose scope of action is curtailed by the internationalization of the market economy but who at the same time are increasingly called upon to adapt and modernize their institutions or restore stability to a severely battered social fabric.

Next come the trade unions, whose difficulties are common knowledge, stemming as they do largely from the diverging interests of the workforce. More specifically, there is a more and more noticeable rift between workers with stable jobs and the growing numbers of other, often less-skilled, workers. This crisis in worker representation, which is now all too apparent in the industrialized countries, has always existed in the informal sector of the developing countries. As that sector has grown, so too has the problem.

As things are today, the balance of power has evidently changed, and it is often the entrepreneurs' objectives that are given priority consideration. Here too, however, tensions are emerging. Small and medium-sized enterprises, whose concerns are quite different from those of larger firms, are proliferating, while the most powerful companies are increasingly clamouring for autonomy. Again, it is not easy to speak with one voice.

It is the whole concept of labour relations, of the social partners and of their scope of action that is being challenged. Are the methods that have been used so far still relevant? Must they be adapted or do we need new ones?

In industrialized countries with pluralist traditions, these changes resemble constraints which increasingly appear to stifle established systems. On the other hand, the break experienced by Central and Eastern European countries was short and sharp: there, these phenomena were amplified by the passage from one economic and political order to another. A break-up of economic structures has been witnessed in that region, the trade union movement has become fragmented and -- inevitably -- certain habits and methods of the old regimes have survived.

Lastly, in a whole range of developing countries, industrial relations come into play, above all, in the public sector and large-scale national or multinational enterprises. What, however, is the fate of the masses of people occupied in the informal sector?

We must bear in mind that collective bargaining first evolved in the industrial democracies, where the aim was clear: to enable the parties themselves to participate in devising and applying safeguards for the working man that were the necessary corollary of economic progress. The bargaining procedure did at least mean that the weak did not become steadily weaker. Today, that risk is again very much in the minds of all those now facing insecurity. This is all too true in the countries of the South; but it is also more and more the case in the North too. Employers' and, especially, workers' organizations must learn to cope with this fragmentation of interests and of the levels at which decisions are taken in the world of work.

If they are to succeed, workers' organizations must come to terms with social and economic change. For example, as decentralized networks gradually take over from mass production, so the possibilities for the trade unions to halt the process are diminishing. At the consumer stage, however, new means of pressure are coming to the fore, as enterprises become more and more sensitive to competition. Competition too, like the companies themselves, is gradually becoming more international, and this calls for new forms of representation.

Yet it is safe to say that there seems to be no approach other than labour relations that aims simultaneously at protecting the employed, the unemployed and the underemployed. This is especially true at a time when the State is increasingly hesitant to intervene. In any event, history has shown that it is never a good thing for the individual to have to stand alone against the State.

This is of course a transitional phase. If we are to put industrial relations back on a firm basis, we must surely look to negotiate fresh social contracts. First, then, we must make an inventory of successes and innovations all over parts of the world, and we must analyze them so that we can see what the prospects are for the future. That is what this report sets out to do.

The report will, I hope, provide food for thought for all those concerned about labour and about its future. There has, of course, always been a certain conflict between the satisfaction of immediate interests and the desire to build human relationships that are not based solely on considerations of cost or a balance of power. At the present time, however, there is a very real danger that a less egalitarian society may evolve, composed of "winners" and "losers", with all the attendant risks for democracy and for the stability of the society we live in. If that is indeed so, the social partners have a compelling duty to ensure that the changes currently taking place are directed towards a mutually acceptable synthesis of economic efficiency and social progress.

Michel Hansenne

15 October 1997


Updated by MB. Approved by PD. Last Updated 1 Nov 2002.