Sectoral Activities Programme |
Part 4
5. The impact of terms of employment on
the human resource development of
personnel in the public service
The devolution of decision-making over operational and financial matters is central to public management reform, providing greater flexibility in public service delivery -- including in human resource management. At some point, these structural and organizational changes have repercussions on employment security for many public service workers and have an impact on the contractual terms and conditions of an even greater number of employees.
Of course, these repercussions are not uniform and affect various groups of workers differently. Cutting jobs and streamlining an organization can improve its viability and provide better employment security for the remaining staff -- although this might be small comfort for those who have lost their jobs in the process. If increased functional flexibility is accompanied by appropriate training, workers may acquire a wider range of related skills, thus improving their chances of being employed; in other words, their employment security in the long term is increased even if they are in a vulnerable situation within the organization currently employing them. Gender may also be a significant factor in the way jobs are affected -- but not necessarily. While some elements of reform have undoubtedly had far more serious repercussions on women workers than on men, there are striking examples to the contrary.
5.1. Legal status of public servants and employment security
The legal status of a public servant was traditionally intended to protect the personnel and users of services "in the general interest" against political, ethnic, religious, economic and other kinds of pressures interfering in the delivery of the services. Employment security, linked to this status, was considered compensation for the fact that pay in the public sector was at times lower than that of the private sector and ensured loyalty, responsibility and accountability of the public servants. In the process of structural change and transition this status is often considered too rigid. As described earlier, the introduction of New Public Management (NPM) requires more flexibility in determining pay and other terms of employment -- and this process is not only accompanied by changes in the perception of tasks and accountability but also in the legal status of employees.
As management and employers focus increasingly on efficiency and rationalization, services in the public or general interest frequently take second place. This trend is reinforced when specific services are contracted out or an entire agency is privatized. Although there is virtually no governmental function that is not susceptible to contracting out -- thus leading to the replacement of public service employees -- the example of the United States shows that there are legal limitations on contracting out. The jurisdiction provides that contracting which displaces public service personnel is lawful if it demonstrates that it is undertaken "... for the purpose of improving the effectiveness, efficiency or economy of service delivery ...".(103) Obviously the legal status of the personnel providing the services changes in such a situation and the contract arrangements are different. This also often has consequences for the staff representation. In some cases the same public service personnel is taken over by the contractor or even offer the services themselves (see also section 5.2 below).
In a number of countries, there is a firm political will to introduce more flexibility into the public service as a whole to attain improved productivity and respond to changing needs. In these cases, the possibilities of introducing efficiency-oriented criteria for pay and other benefits, as well as of assigning new tasks or dismissing staff, may be too limited. Several of these countries have therefore started to change -- or are planning to change -- the legal status of the civil service, either in its entirety or in part.
A case in point is Austria which has changed the legal status of health workers in the public service; since 1997 they have been governed by general labour legislation. The constitutional reform in Brazil in 1998 will also lead to a change of the legal status of the public service. In Switzerland a draft law is being discussed which plans to abolish the civil service status for federal employees in its present form. The new legal status would be applicable in the year 2001 and provide for a period of appointment limited to four years, the possibility of dismissal and a new payment structure according to functions.
Far-reaching changes have also taken place in Italy. In 1998, the Government decided to introduce more flexibility into the
public service -- which, hitherto, has enjoyed a civil service status -- by providing for the possibility of dismissing railway
workers, who are public servants. It also stated its intention to create "responsible managers" among the 150,000 managerial
staff of ministries, public enterprises, universities, and hospitals.(104) The package for introducing more flexibility includes the
right of the employer to dismiss under certain conditions, to issue fixed-term contracts and to transfer personnel
geographically. But by making public servants subject to general labour legislation, Legislative Decree No. 29/1993 provides
them with the possibility of collective bargaining.
Example: Burkina Faso |
In Burkina Faso, a reform of the public service was initiated in January 1997 whereby the civil service status was retained only for officials employed in core bodies (police, justice, finance, etc.); other workers were given the status of contractual employees. An Act was adopted for this purpose in April 1998. The trade unions seem to have played only a minor role in the reorganization of this status. Although they are not opposed to the principle of such a reform, they are particularly concerned about the methods of breaking work contracts or of dismissal in a country which lacks any social safety net or unemployment compensation machinery. Furthermore, the trade unions believe that it is impossible to establish target-based contracts in various sectors (teaching, health services, police, etc.) and that employee appraisal increases the risk of arbitrary judgements, nepotism and political "marking". They would have preferred the effective application of the sanctions established under the former statute and the negotiated amendment of the latter rather than a radical reform which is only slightly adapted to the context in which it will be applied. The new public service regulation, expected to favour contract work, sparked a wave of industrial unrest by public workers in April 1998, with the participation of students --who will also be subject to the new statute. The wide-sweeping reform, which will come into force in 1999, has introduced three significant innovations. The State will, henceforth, favour the recruitment of contract workers instead of public servants, as has been the case so far. Also, the number of grades has increased from at least 11 to 14, and workers will henceforth be assessed by their direct supervisor instead of their sector minister. The retirement age for senior public servants will be increased from 53 to 55 years. These are the many changes being denounced by the unions. |
In the former centrally planned economies of central and eastern Europe, the personnel of the public administration was traditionally governed by general labour codes, with the exception of Estonia, Hungary, Latvia, Lithuania and Poland. SIGMA -- Support for Improvement in Governance and Management in Central and Eastern European Countries(105) -- has developed a checklist to facilitate the development of a legal basis for a public administration in which admission and career would be based on merit and performance. SIGMA is advocating a special civil service law which would define the qualifications, duties, rights and working conditions of the public service personnel. SIGMA further stresses the importance of a law which would aim at raising the professional quality of the staff so as to improve performance; training should therefore be explicitly regulated. The law should render a career in the civil service attractive, thus retaining people in that career, but also enable the government to adapt the administration to changed needs.
5.2. Contract arrangements
Although public service reforms might not necessarily always have changed the legal status of public servants, they have frequently affected their contract arrangements. Moreover, the introduction of private sector management approaches into the public service -- decentralization, contracting out or privatization -- has had an impact on contractual arrangements. Given that these changes are very much tied up with national conditions, even under a system of regional integration such as the European Union, they may best be illustrated by describing a number of cases and their development. The following paragraphs will attempt to highlight the repercussions of contracting out in the case of the United Kingdom; the consequences of consolidating the national public administration structure in Spain; and the effects of decentralization in Brazil.
Within the European Union, a Council Directive relating to the safeguarding of employees' rights in the event of transfers of undertakings has improved somewhat the contractual situation of public servants who find themselves in this situation. After a series of case-law judgements which have continually redefined its scope, it has been established that this Directive applies to public service workers transferring to private employment through contracting out. The Directive requires that the transfer of all employed workers (temporary as well as permanent, but not those retained on a self-employed basis) also involves the transfer of all their employment contracts and terms. It thus provides some limited protection for these workers. For example, the transfer itself cannot be used as grounds for dismissing workers, although they can be dismissed for economic, technical or organizational reasons. In addition, their jobs, pay (including bonuses) and conditions are protected, along with union recognition and collective agreements. Pensions do not transfer, but the new employer is required to make broadly similar arrangements.
In the United Kingdom, the range of employment conditions covered by the Directive was illustrated in December 1994 when the Department of Health informed health service employers that it even covered benefits which were not necessarily the result of formal agreements. In fact, the United Kingdom Government has interpreted the Directive's application to the public service as narrowly as possible; its acknowledgement therefore has wider significance. Solicitors have advised that the provision of child-care facilities are tantamount to "custom and practice" and, to all intents and purposes, are regarded as part of an employee's terms and conditions of service. Advice from the Market Testing Unit is that if a member of staff transfers to the private sector under the Transfer of Undertakings (Protection of Employment) regulations (TUPE)(106) the new employer is required to offer comparable child-care facilities.(107)
The Directive further requires that the employer of staff being transferred informs them why and when the transfer is taking place and how it will affect them as employees; it also enables "recognized unions" to make representations.
All that is clear enough, but legal uncertainty has continued over whether or not contracting out a service to a private company from a municipality amounts to a transfer, even if no assets are transferred. There has been a stream of legal judgements continually reshaping the answer to that question. A key judgement came in April 1994, in the Schmidt case submitted to the European Court of Justice, which established that the Directive applied even when only one person was involved; indeed, the case in question concerned a bank which had employed just one cleaner before contracting out her work. The European Court held that the Directive applied to any situation in which "an undertaking entrusts by contract to another undertaking the responsibility for carrying out cleaning operations which it previously performed itself, even though, prior to the transfer, such work was carried out by a single employee."
The German Government, supported by that of the United Kingdom, had mounted a defence on the premise that a "transfer" for the purposes of the Directive had to involve assets as well as labour. The European Court insisted that the arguments of both Governments, based on the absence of any transfer of tangible assets, could not be accepted. Building on these judgements, the English Court of Appeal ruled in May 1994 that the Directive also applied to the transfer of a public service contract from one private company to another -- for example, when a contract was retendered.
In March 1997, a further ruling by the European Court of Justice on the Ayse Süzen v. Zehnacker Gebäudereinigung GmbH Krankenhausservice and Lefarth GmbH case, ruled that the Directive relating to the safeguarding of workers' rights did not apply where a contract for the provision of services changed hands, and an incoming contractor was not responsible for maintaining staff on existing terms and conditions.
As a result, many European governments have been forced to rethink yet again. In 1998, the United Kingdom's Department of Trade and Industry (DTI) published a consultation paper setting out clearer rules for consulting representatives of workers affected by redundancy or a transfer of business between employers. This document proposed to streamline existing legal obligations, which have been difficult to apply. The Labour Government has acknowledged that thousands of public sector employees lost out when they were excluded from the Directive's regulations during the previous Government's vigorous privatization programme in the 1980s.
Moreover, in June 1998, the draft of a new Directive pertaining to acquired rights went before the European social affairs council of ministers which could undermine TUPE in the United Kingdom.(108) It includes the proposal that transfers will not be covered by the new Directive if they are part of an "administrative reorganization of public administrative authorities, or the transfer of administrative functions between public and administrative authorities". Unions and the association of public contractors in the United Kingdom are equally concerned about this move.
Spain is still coping with the significant changes caused by Law 22/93, covering fiscal measures, reform of the civil service legal system and unemployment benefits, which came into force in order to improve human resources performance, subjecting its planning and management to more flexible and efficient strategies -- in other words, employment plans.(109) These plans are extremely far-reaching and may include such measures as: forecasts for the change of organizational structures and jobs; creation of training courses; reallocation of surplus employees to other workplaces requiring personnel; and specific internal promotion measures. The implementation of these plans required the reform and updating of the rules that contained the regulations relating to access to the civil service and administrative situations. Consequently, the Access, Provision of Jobs and Professional Promotion Regulations (Royal Decree 364/1995) and the Administrative Situations Regulation (365/1995) were enacted. The employment plans have to be negotiated with the unions and are finally sent for approval to the Ministry of Economy. The combined impact on terms of employment of these measures is still the subject of negotiation between the Government, the administration and the unions. The unions would like to see a more flexible and homogeneous model -- with an improvement in staff policies and performance-based incentives. Attempts are also being made to elaborate a system of arbitration for settling disputes. The unions consider the major problems to be: the duality of juridical systems between public workers and outside workers (funcionarios y laborales); the lack of any structured professional career plan, based on professional training and promotion; the fact that unions are excluded from bargaining on a number of vital issues, despite agreements between the administration and unions on representations; deficiencies in salary structures; and limits on collective negotiations. Union objectives include a "professionalization" of public workers, decentralization, training as a strategic element in promotion, improved quality of services and increased employee participation.
Increased decentralization and contracting out are also affecting employment security and contract arrangements in the developing and less developed countries. In this context, the 1992 Health Agent Programme in Cearà, north-east Brazil, is an interesting example of the decentralization of public services (for decentralization see also section 4.8 of this report) and its impact on employment terms and opportunities. It differed from most other decentralization processes in the sense that the central branch of Government was not simply cut back or did less than before.(110) It contradicted the image of local government and non-government providers as being inherently better than central Government at tailoring services to clients' needs.(111) To some extent, the case shows that decentralization and empowerment demand more, not less, centralization, as well as more sophisticated political skills at the central level.(112) The Health Agent Programme represented a combination of strong central control and local "embeddedness".(113)
Eighty-five per cent of the programme funding came from the state (regional) level and the local governments (municípios) financed the remaining 15 per cent. The programme involved the hiring of a large number of unskilled health agents, supervised by professional nurses. Surprisingly, whereas the local governments hired the nurse-supervisors, normally externally recruited, the State hired health agents -- of whom there were far more.(114)
A crucial aim of the programme was to do away with the traditional system of patronage and to introduce in its place a more service-oriented approach. Clearly, the state Government feared that the hiring of so many new public workers could create more rather than less clientelism. It made attempts to avoid these pitfalls in at least three ways. First, it gave the newly recruited health agents only temporary contracts, rather than the more usual permanent job tenure. Secondly, the State kept the funds for the health agent salaries outside the control of not only the local government, but also the Department for Health. Instead, the control of these funds remained in the hands of the governor. Thirdly, by keeping control of the recruitment of health agents, the Department of Health wanted to oversee the rigorous selection of candidates and, later, to supervise the programme.(115)
The agents were recruited in three stages, based on individual applications and subsequent rounds of interviews. The applicants were unskilled and unlikely ever to have applied for a job before.(116) The new posts were considered to be quite prestigious by the applicants and the local townspeople -- a fact which later seemed to have been an important incentive for good performance. In addition, the health agents seem to have developed a certain self-awareness, or a feeling that they belonged to a special elite, simply because they had "won" the job competition. However, the hiring process in Cearà differed from a traditional meritocracy in a number of significant ways; it linked prestige not only to winning the recruitment competition, but also to the "noble mission" of carrying out important health work in their local community.(117) Secondly, the status of the health agents was not linked solely to education but -- quite the opposite -- to the fact that they had been rewarded an education. They were all given three months' full-time training, in addition to in-service training and feedback from the supervising nurses. Access to this kind of training was simply unthinkable for most people in Cearà.(118)
The health agents in Cearà were only paid a minimum wage. Similarly, reward for having passed the job competition did not come in the form of job tenure. As a matter of fact, the Governor of Cearà made this point explicitly, claiming the whole scheme would "die" if the agents were "turned into state employees".(119) Arguably, the agents were given little job security which, as it turned out, created some controversy after a period of time. The agents organized themselves to demand greater job security and the fringe benefits granted to other public employees. The State agreed to participate in discussions to settle these issues. Moreover, some measures were taken to promote a certain number of the agents through a process of selection and training.(120) It could, finally, be argued that the work carried out by the health agents was more satisfying than many other low-security jobs, in terms of their great variety of tasks. Similarly, it should be noted that, given that health has been an expanding sector in Cearà, their skills as health agents are highly "transportable", making them potentially far more mobile than most low-security jobs.
5.3. Equal opportunity and treatment
It goes without saying that structural and organizational changes may have varying repercussions on different groups; and these are contingent, in part, upon the level of awareness of governments and administrations about the issues of equal opportunity and treatment. These issues not only concern equal opportunity between men and women, but also the equal treatment of various population groups within the same country.
As regards equal opportunity between men and women, the European Foundation for the Improvement of Living and Working Conditions commissioned an analysis of 16 case-studies in eight countries in 1995. The research team's report concluded that no systematic attention has been paid in public welfare service reform to equal opportunities policies in their widest sense, and in particular little attention has been paid to gender issues, despite the significant role of women in service provision and in the management of poverty in the home and local community.(121) The German Public Services and Transport Workers' Union (ÖTV) has recently undertaken a study to assess to what extent public reform initiatives in that country have involved women in their design, and to analyse whether or not they have benefited from the results. The ÖTV disagrees with the opinions frequently voiced that the modernization of public administration is gender-neutral; they claim that this is a false impression because despite the fact that public service employment is, on the whole, shared roughly equally between men and women, the representation of women decreases the further up the hierarchy you go. Against this background there is a growing concern among female employees and managerial staff that women will be left out of the potential benefits of modernization. The union concludes that the main factors contributing to this state of affairs are both structural and cultural: structural because the promoters of reforms are in higher management levels in which women are underrepresented; and cultural because women are not pressing to be involved -- and men in positions of power are doing nothing to involve them.
A survey for the United Kingdom's Equal Opportunities Commission (EOC) revealed that 77 per cent of the jobs lost as a result of that country's compulsory competitive tendering regime for local authority services had been held by women; that women's employment had fallen by 22 per cent while male employment had fallen by 12 per cent in the cases studied; and that pay rates of jobs mainly occupied by women had tended to fall as a result of tendering, while those mainly occupied by men had not.
However, a number of countries are aiming to tackle gender disadvantage. In the Philippines the Civil Service Commission (CSC) has set up its "women in government service" (WINGS) programme to address the needs of 1.4 million female public servants -- estimated to account for about 54 per cent of the Government's total workforce. The WINGS programme is intended to increase women worker productivity by improving working conditions, preventing sexual harassment at the workplace and promoting career advancement. The CSC has also promulgated several gender-sensitive policies: for instance, "Circular No. 6" allows government agencies to grant special employee privileges such as paternity leave, hospitalization leave, funeral or mourning leave, graduation leave and even an enrolment leave. The agency has also initiated a career advancement programme for women in government service, otherwise known as CAPWINGS. This is the CSC's flagship programme which aims to expand the role of women in higher management levels, thus promoting the advancement of women in government service. To date, the Department of Labor and Employment has conducted various gender-sensitivity programmes and gender-responsive planning sessions among its officials and staff to mainstream strategic gender issues such as equal employment opportunities and sexual harassment at the workplace.
Denmark offers a positive example of women's involvement and benefits deriving from structural and organizational change. The union-led reorganization of ancillary services in hospital and social care institutions in the county of Federiskborg has increased women's pay and extended their range of tasks, while raising their status. All ancillary workers are being reorganized into self-managing teams collectively responsible for carrying out a range of duties agreed upon with doctors and the nursing management; but they negotiate the allocation of tasks among themselves.
In the social employment departments in the Netherlands, a sectoral agreement gives all employees working over 18 hours a week, who have been employed for over a year, the right to take parental leave on half salary for children aged up to 6 years. Employees can either take three months off entirely, or work half-time for six months or three-quarters time for a year. Pension rights and medical insurance are not affected. This opportunity has been taken up by more men than women, suggesting there is a market for allowing men to work hours which enable them to play a greater parental role.
As far as human resource development is concerned, gender issues particularly need to be reflected in the training of public service personnel and their trainers. One organization which has adopted this approach is the German Foundation for International Development (DSE/ZÖV). In 1997, its centre for training public service personnel and their trainers in developing and transition countries decided to strengthen and systematize the gender approach in its training programmes. As DSE/ZÖV works in close cooperation with development partners, it decided to involve its own staff and those of its partners -- as well as the participants of the programmes -- in the development of a strategy on ways to integrate gender issues into public administration promotion programmes. This has resulted in a "participatory consultancy-cum-training process" which is being tested in Namibia, South Africa, Zambia and Zimbabwe. The experiment involves workshops and consultations with the various staff in which existing programmes are examined and proposals developed on ways to integrate gender issues into training. The role of outside consultants is rather to "coach" than to "advise". The programmes in which gender issues are being integrated refer both to public service personnel and clients of the public services. In both respects, the roles and needs of men and women need to be examined in order to integrate these aspects into the training. The process will be long but is expected to be sustainable.
Issues concerning equal opportunity in employment and occupation in the public service have also arisen in some transition countries. In the Czech Republic, for instance, the Screening Act (No. 451/1991), which lays down certain prerequisites for those holding management functions in state bodies, was challenged before the Constitutional Court and was the subject of a representation under article 24 of the ILO Constitution, presented by the Trade Union Association of Bohemia, Moravia and Silesia (OS-CMS). The Committee of the ILO set up by the Governing Body, which was set up to examine this case, found that there were incompatibilities between this Act and the Discrimination (Employment and Occupation) Convention, 1958 (No. 111) on the basis of political opinion. It therefore requested the Government to repeal or modify any legal provisions which were incompatible with the Convention and to take the necessary measures, including appropriate appeal procedures, to enable workers who suffered discriminatory treatment within the meaning of Convention No. 111 to obtain redress, including reinstatement in their jobs, in appropriate cases whatever their sector of activity. The application of the Convention will be further examined by the ILO Committee of Experts on the Application of Conventions and Recommendations in December 1998.
Another example of the way in which structural and organizational reforms may have varying repercussions on different groups is Uganda. In 1994, this country embarked upon a wide-sweeping process of decentralization which, to date, is the most advanced decentralization experience in Africa. Under this scheme the country is divided up into districts managed by locally elected members, whose responsibilities include the recruitment of public servants in the health and education sectors, the management of parastatals and the allocation of 40 per cent of district taxes for development projects. However, because decentralization has followed the traditional borders of tribes, it is reported to have exacerbated tribal rivalries and the marginalization of weaker communities. Public servants are said to be finding it increasingly difficult to get a job in districts dominated by another tribe than their own, while those already employed have often been replaced. For the same reasons, the centrally planned downsizing of the public services, a requirement of the World Bank, has mostly occurred in the north of the country -- a decision taken by a Government in which the south predominates.
The multifaceted issues of equal opportunity and treatment have to be analysed very carefully in the context of access to employment and working conditions. Equal opportunity cannot be achieved by rules, regulations and laws alone; it presupposes an increasing awareness and changed attitudes which are more likely to succeed with human resource development.
6. Alternatives for retrenched workers
The alternatives to retrenchment described in the following paragraphs will be viewed from the standpoint of human resource development. They will not focus on training and retraining alone because, as mentioned earlier in the text, HRD goes beyond this and encompasses other factors to help workers develop their knowledge, skills, and attitudes in order to participate in the development of economy and society. All social partners realize that special creativity is required in times of unprecedented structural change and transition.
6.1. General measures to mitigate negative employment effects
Among measures which can be taken to mitigate various employment effects of structural and organizational change in the public services are the following:
In a number of countries, trade unions have been able, during reform processes, to negotiate employment guarantees for a limited period of time. The Association of Estonian Trades Unions, for instance, succeeded in ensuring that employment guarantees for a three-year period were attached to contracts after privatisation; however, there is now pressure on the government to shorten this period to one year.
Where there is nothing else for it but job cuts, there is still also a range of possible measures to mitigate the effects. They include:
In order to be effective, measures taken by particular organizations need to be supplemented and backed up by policies and incentives in the economy and society as a whole. These could include active labour market policies such as the following:
6.2. Severance packages
Many countries have established severance packages for laid-off public service workers which vary considerably in content. In the early days of public service reforms the costs of severance packages were borne by government budgets -- but since the 1990s they have also been borne increasingly by donors. They frequently include the offer of voluntary early retirement with compensation payments according to the length of service and the retiree's age. This instrument was often used in the structural adjustments of the public service in Africa. The amount offered varied from 1.2 months' salary per year of service in the Gambia and the United Republic of Tanzania to up to entitlements of 13 years' salary in Zambia.(122)
Besides employment counselling and retraining, other benefits range from a "golden handshake"(123) to an "economic jumpstart" or loans for establishing small businesses. In packages which take up the loan option, one approach being considered is to grant the loan to groups of workers who would take joint responsibility for repaying. The loan could then be disbursed in several installments in the beginning to establish a repayment capability. Several installments would also distribute the burden to the government budget over a longer period of time. These loans are also sometimes combined with preparatory training. The management of such loans might be contracted to private institutions or NGOs. However, the fact remains that the best way of increasing the absorptive capacity of the private sector is through private sector promotion measures and some deregulation. In any case, the rate of downsizing the public service should be kept at a reasonable fraction of the rate of new workers entering the job market. In Kenya, for example, even 40,000 dismissals per year (double the figure that was proposed earlier), would only have been equal to 10 per cent of the growth of the labour force in 1993.(124)
Besides the debate of how best to organize such assistance for an "economic jumpstart" remains the concern of whether this instrument may be attractive enough to those public servants who have no entrepreneurial inclinations. There are estimates that no more than 25 per cent of the lower-echelon public employees are entrepreneurial enough to start a business.(125) Moreover, it would not solve the problem of the most qualified and dynamic leaving the public service and the question of equal treatment. In any event, part of the savings on the government wage bill should also be earmarked for the upgrading of skills of the remaining public servants.
The problems involved in establishing severance packages may be illustrated by the case of Cameroon. To avoid redundancies, public sector workers in Cameroon accepted a 70 per cent salary cut in 1993 and regularly lived with delayed payments. But the devaluation of the CFA franc by 50 per cent in January 1994 was "the last straw" and the unions took to the streets in protest. Economists also criticized the Government's compromise, arguing that it would be more realistic to ensure dismissed workers a severance package allowing them to set up their own enterprises, which would stimulate the economy, rather than to make wage cuts. In April that year, the Government announced retrenchments were looming which it would this time implement, in keeping with the fourth stand-by credit agreement with its creditors. Under the terms of the new agreement, 25,000 of the 200,000 strong public servants were to be laid off by 1997. Public servants and trade unions reacted to the first round of retrenchments with shock and disbelief. Many are questioning the criteria for selection as people employed for just two years are being laid off along with veterans of more than 15 years -- who are entitled to full retirement benefits. Although getting the equivalent of two-year salary, the packages are calculated at present salary rates rather than those of 1992 -- before the 70 per cent cut -- as the Government promised earlier. Cameroonian public servants who applied for voluntary retirement have received financial packages from the Government as compensation.
In South Africa, the Government and the trade unions signed a Three-Year Agreement on the Conditions of Service Adjustment Package (1996/97-1998/99). The Agreement basically won the unions' acceptance of right-sizing the public service in exchange for a voluntary severance package and adjustment in the remuneration package. However, it appears that this severance package has worsened the skills deficit in the public service.
6.3. Group initiatives to deliver public service activities
In situations of massive reductions of public services, job cuts and lay-offs, all possible solutions have to be considered. Alternative strategies to give workers employment and income have to be creative and should not be limited to a few blueprints. One of these alternatives is for groups of workers to become self-employed. Workers who are being laid-off may have a particular advantage to tender for out-contracted public services. Indeed, there have been numerous cases of workers forming groups to offer such services -- or even services which have been abolished or cut back by the public providers. In the case of the latter, workers have sometimes created alliances with the users of the services they offer.
In some countries, cooperatives have traditionally played a significant role in the provision of services of general interest. Examples include electricity cooperatives in the Unite States and Argentina and health care and social services cooperatives in Brazil, Italy Spain and the United Kingdom.(126) Situations in which the public service is decentralized to local authorities are particularly propitious for such cooperatives or groupings of self-employed workers. By contracting out to or buying services from such groups, the local governments are able to reduce their budgets and react in a flexible and qualitative way to the expectations of the citizens.
There are also attempts to combine private and public interests and those of the consumers and providers in so-called "multi-stakeholder cooperatives". The Italian Cooperative Act of 1991, for instance, provides for social cooperative societies with membership of different stakeholder groups -- which may even include local governments. Experience with such organizational forms is, however, still limited and only practice can show their feasibility and replicability.(127)
The examples of successful cooperatives providing services of general interest are manifold. As the World Development Report 1997 noted, they can give an opportunity to the citizenry to make their voice heard and bring more competitiveness into an area which is mostly dominated by public or private monopolies. However, the shortfalls of cooperatives and similar groups in providing alternative employment and income to laid-off workers have to be carefully analysed. The limitations depend on the sector of activities and whether such groups are organized and financed by the workers, the consumers or both.
A particular model is being discussed in Malta(128) where public service employees can take unpaid leave in order to become self-employed during the time of their absence, create a cooperative with other colleagues and negotiate an out-contracting arrangement of services with the public authority. A similar arrangement is also possible as "internal subcontracting". As the experiment is still in its early stages, it is impossible as yet to determine the impact on workers and public budgets.
In the United Kingdom and Sweden new forms of cooperatives and similar groups are being created in order to substitute for services which were previously provided by local governments or which are being devolved to the local authorities. These groupings often also include the users of the services. The areas of activities are mainly in health and elderly care (structures described as "third sector care") and social services but also in the areas of sports and leisure facilities previously run by the local authorities. A prerequisite for the success of such alternative employment and income-generating arrangements would seem to be careful preparation and training of the persons involved, based on long-standing experiences with such organizational forms. Credit facilities or other initial funding for the group or cooperative might also be required.
7. Labour relations and their role in
human resource development
The Labour Relations (Public Service) Convention, 1978 (No. 151) stipulates, in its Preamble, the need for sound labour relations between the public authorities and public employees' organizations; indeed, these are of crucial importance to human resource development in the public service. Public employees' organizations enable staff to participate in the determination of the way in which structural change and transition are implemented; and they help to harness the potential and competence of individual staff members, thus contributing to an overall improvement of efficiency and productivity. In turn, employees' organizations may also serve as a link between the interests of the public to make public services more effective and the employees' interests in acceptable working conditions and terms of employment. This clearly illustrates that the role of labour relations in HRD goes far beyond negotiating and the training and retraining of workers in the public service -- as described in Chapter 3 of this report. The following sections will attempt to give an overall view of the current situation of labour relations in the public service in the context of structural change and give some examples of innovative approaches that might contribute towards human resource development in the wider sense of the term.
7.1. Unionization and alliances with civil society(129)
Very often, unionization rates are much higher in the public than in the private sector. This is true of most European States, the United States and Japan; the rate has also increased in the public sector in Canada and in the Netherlands which helps explain the growth in trade union membership in these two countries. A drop in the number of new members often occurs with privatization. This observation is particularly valid in the transition countries of Central and Eastern Europe; it also applies to the developing countries of Asia and Latin America, but here the data are more difficult to verify. The same situation occurs in OECD countries such as Australia, the Netherlands or the United Kingdom.
Trade unions in the public sector sometimes face serious obstacles stemming from the fact that governments sometimes have an excessively rigid view of these workers' functions and feel that these workers carry out duties considered to be essential or in the public interest. It is on these grounds that national legislation still denies, whether explicitly or otherwise, state employees (Bolivia, Ethiopia, Liberia, Chad) or certain categories of them (Malaysia, Panama, Nigeria) the right to join trade unions. Sometimes, however, organizations are set up on the basis of general legislation of freedom of association where these are unable to benefit from the specific provisions applicable to trade unions (Bangladesh, Ecuador). More often, there are restrictions on the right of some or all state employees to negotiate formal collective agreements with the State that employs them (Colombia, Iraq, Pakistan), and especially the right to strike (Germany, the Republic of Korea, Japan).
Despite these exceptions, on the whole the existence of trade unions is fully acknowledged in the public sector. The higher level of mobilization in the public sector is a result of some of its particular features. The size of the units and the homogeneity of occupational status facilitates unionization. Furthermore, a large number of employees work for a single employer which is conducive to the delegation of authority to trade unions. The fact that funds are of public origin encourages consultation which, in a number of countries, takes the place of collective bargaining. Consequently, considerable restrictions are sometimes accepted in connection with bargaining and strikes which would be less readily accepted in the private sector. In conclusion, these various features lend a political dimension to mobilization, even when it is directed towards obtaining economic benefits. Suffice it to consider the disputes in the health sector.
All the more reason for protest movements in the public sector, if they are to succeed, to take account of the users' concerns and the public interest (and this includes the efficiency and the management of the public services); if they fail to do so, they risk losing the support of public opinion, which is all the more valuable given that the position of their employer is largely dependent on it. Strategies therefore increasingly envisage forming alliances. For example, the campaigns for female municipal employees in San José and district nurses in San Francisco owed their success to scrupulous consideration of users' needs. The campaigns also sought the support of public opinion by forging an alliance with women's organizations and by joining forces with groups sharing similar concerns. Also in a similar successful campaign for janitors, a movement which was essentially concerned with workers of Mexican descent, the SEIU (Service Employees International Union) emphasized the civil liberty dimension of the protests and forged links with human rights organizations, religious and women's groups and other community institutions. Launched at a time when work had become increasingly contracted out, the movement succeeded in reaching groups of contractors, as well as companies using them.
In Central and Eastern Europe, it is possible to identify a number of factors which have so far prevented the emergence of a more comprehensive personnel policy. Perhaps the most important significance is that the unified public service does not, in quite a few cases, really exist; in fact, the idea of the public service as such does not have a basis in law. As yet, there are only a few civil service codes which aim at regulating the rights and duties of the public service; instead, most employees in public administration fall under the general labour law. Special regulations regarding labour relations only exist for parts of public administration (notably the internal security forces, the armed forces, the police and prison guards).
The negative effects of this lack of a comprehensive legal framework to regulate employment in the public sector are compounded by the fact that there is often not a single employer. Rather than being employed by the State, employees' labour contracts are with individual government departments. This leads to a great deal of variance in contractual arrangements. The absence of a common legal framework for the public service and the independence of individual ministries in matters of personnel greatly impede the development of a coherent personnel policy. Moreover, until recently, the need for an organizational focus in government to consider personnel issues and to prepare reform legislation was scarcely recognized.
The passing of a civil service legislation is, therefore, rightly seen as a vital ingredient of the reform process. A stable, competitive, accountable and democratically reliable civil service is a precondition for success not only of administrative reform, but also for political stability and economic development. The European Union's acquis communautaire should serve as a further impetus to reform.
7.2. Quality improvement through workers' participation
Any successful reform process needs to be understood and accepted by those whom it directly affects. This also applies to structural adjustment programmes and public service reforms. If representatives of public servants do not actively participate in the reform or cannot play a fair part in it, the reform is doomed to fail. Participation implies giving workers objective and appropriate information, providing them with opportunities for regular consultation and allowing them a say in deliberations and decision-taking. A fair participation includes not only the workers concerned and their representatives but paves the way for organized participation, i.e. the consultation of trade unions. The following description of an example in Sweden endeavours to give an insight into how such participation can be organized and implemented.
Sweden is known throughout the world for being a country with a progressive social policy and highly developed and well-resourced health and social welfare services. Its achievements in this area have served as a bulwark against social and economic damage arising from increasing international economic integration. At the same time, however, precisely that integration, along with other factors, has put increasing pressure on Swedish public finance and the services and benefits for which it pays.
These trends have prompted a continuing debate within the country about the future of the Swedish welfare model, and have pushed national and local government towards restructuring and reorganizing public services, and especially those for which Sweden is particularly well-known -- health and social welfare services.
For a time, in response to these challenges, many a Swedish municipality reached for what in other countries had become standard reactions to equivalent pressures -- privatization, contracting out, service reductions, job cuts. More recently, however, the Swedish public service unions have shown there is another way. And, increasingly, not only Swedish municipal and county government but also policy-makers further afield, are taking notice.
Both major local government unions, SKAF (Kommunal) and SKTF, have developed models which have demonstrated the possibility of simultaneously reducing costs, increasing quality, protecting employment and improving job satisfaction. While the SKTF model concentrates on measurement and evaluation of the current situation, the Kommunal model centres on tackling change through employee participation. The union has set up a special development and management unit called "Komanco" which sells its services to municipalities at commercial rates -- and it has been starting around 60 new projects every year since 1995.
Faced with demands from employers for cuts in public services or privatization, SKAF realized that just trying to refuse changes was not very constructive, especially as some of the accusations of inefficiency in the public services were justified. In fact, the union had for many years stressed that the traditional hierarchical organization of work in local government administration was bound to be inefficient if it did not involve the knowledge and experience of the employees. Thus, a model was started to build more efficient, non-hierarchical organization by involving the employees, with the aim of saving money without making people redundant.(130)
The opportunity to try out that approach came first in a town called Malung after the municipality there began to draw up plans to reduce staffing and contract out some areas of service to save money. Before going ahead with their plan, the social democratic local politicians in Malung agreed to give the union the chance to show what could be achieved in partnership with the workforce, and to allow them enough time to produce results. In 1991, the municipality's goal was to decrease costs by at least 10 per cent within three years. They managed to save 10.5 per cent in the first year.
It was the concrete results in Malung rather than the abstract arguments of the union that became the model's selling point from then on. Consequently, Komanco's clients have by no means been limited to politically sympathetic employers. Plenty of Conservative-controlled municipalities have called in Komanco not because they like the ideas so much as because they demonstrably work. Komanco, not surprisingly, makes a condition of its involvement that unions as well as management in the workplace want them involved. A Komanco-employed consultant takes responsibility for each new project, but while he or she gets things moving at the start and has an important facilitating role all the way through, it is the internal project leaders and workplace "tutors", as they are called, who have the key leadership position in the projects.
Soon after a decision has been taken jointly by management and unions to set up a project in a workplace, all the employees are informed and divided up into groups of up to 12 people. Each group elects a tutor from its membership while a project leader is appointed by agreement between management, unions and Komanco. The tutors lead the process of drawing out from their group as many ideas as possible to improve services and reduce costs. This process takes several months, during which time the tutors have eight days of special training from Komanco, in four lots of two days. The project leaders also undergo that training, as well as an additional day dedicated to their specific roles.
7.3. New employers, new bargaining
The development of negotiation and agreements between unions and private contractor firms in the United Kingdom is indicative of the lasting impact on industrial relations of structural change in the British public service. Companies hoping to secure lucrative contracts with local authorities have found a new accessory to don in the beauty contest with their competitors -- trade union agreements. A queue of contractors has been knocking at the door of the public sector union UNISON, looking to negotiate national deals to take with them in their search for new business.
UNISON's own attitude to the privatization in local government has changed radically in the past 15 years in that the union is now primarily concerned about the quality of services and the employees' pay and conditions rather than the principle of which sector runs them. The issue for the union is making sure that plurality of provision is not a mechanism for driving down costs at the expense of employees.
UNISON recently signed its first staff training deal with a private contractor. The agreement is with Serco which runs 40 contracts for 30 local authorities, mostly for manual services. It will enable a group of workers in Kent, including refuse collectors, road sweepers and park keepers, to spend 60 hours of their employer's time studying communications skills on condition they put into the course 120 hours of their own. The course materials will be provided by UNISON's own education department and paid for by Serco, and the course is taught locally by the Workers' Educational Association tutors.
Another company to have concluded a national agreement with UNISON is Capita which has about 70 contracts with public sector bodies to undertake non-manual jobs such as collecting rents and council tax.
But with the best will in the world towards employees, companies competing for local authority contracts have to keep costs low because it is the price of the contract which usually determines the winner. With the introduction of compulsory competitive tendering (CCT) in 1988, local authorities were obliged to put out to tender most of their services, and to award contracts on the basis of commercial criteria only. People working in local government who have been taken on by private contractors as a result of CCT have been partly protected from rampant pay cutting only by the European TUPE(131) regulations under which employees' pay and conditions must be preserved when undertakings are transferred to a new owner. Some contractors have tried to cut pay costs by squeezing out people transferred under TUPE, and taking on new workers on less favourable conditions. Until the law is changed, local authorities must ignore the pay and conditions of staff, health and safety and even training when they are awarding contracts. This means although they can specify a service standard for home care for example, they cannot insist that workers are trained to lift clients safely.
The Labour Government has pledged to replace CCT with a duty to obtain best value for the taxpayer but there is a fear in UNISON and elsewhere that "Best Value" will also end up meaning cheapest, and that anyway local authorities, starved of resources, will always be tempted to take the cheapest option. Certainly there is no sign that competition will become any less important under the new regime. While Labour's manifesto said councils should not be forced to put their services out to tender, the proposals on Best Value published this month state that "competition will play a key part in demonstrating that best value is being achieved".
UNISON would like the law changed now to compel local authorities to award service contracts on the basis of a range of quality standards, and not just cost, arguing that quality services must mean quality employment for staff.
8. By way of conclusion: Points for discussion
and for a framework of HRD guidelines
on human resource development in
the public service in the context of
structural adjustment and transition
103. L.B. Elam: "Reinventing government privatization style -- avoiding the legal pitfalls of replacing civil servants with contract providers", in Public Personnel Management (Washington, DC), Vol. 26, No. 1 (Spring 1997), p. 17.
104. J. Hubert-Rucher: "L'Italie ouvre le débat sur le droit de licencier dans la fonction publique", in Les Echos (6 Mar. 1998), p. 6.
105. OECD: Civil Service Legislation Contents Checklist, SIGMA Papers, No. 5 (OECD, Paris, 1996).
106. TUPE is the legislative mechanism through which the Directive was written into United Kingdom law.
107. Quoted in Privatisation News (Public Services Privatisation Research Unit, London, June 1995), p. 4.
108. A. Bolger: "EU change to workforce contracts causes alarm", in Financial Times (London), 3 June 1998.
109. OECD: Issues and developments in public management, op. cit., pp. 247-250.
110. J. Tendler: Good government in the tropics (The Johns Hopkins University Press, Baltimore, 1997), pp. 23-24.
111. ibid., p. 143.
112. R. Hommes: "Conflict and dilemmas of decentralization", in M. Bruno and B. Pleskovic (eds): Annual World Bank Conference on Development Economics (World Bank, Washington, DC, 1995), pp. 331-350.
113. J. Tendler, op. cit., p. 27.
114. ibid., p. 25.
115. ibid., p. 24.
116. ibid., p. 29.
117. ibid., p. 33.
118. ibid., p. 33.
119. ibid., p. 34.
120. But none of these measures had been put into practice by 1997.
121. European Foundation for the Improvement of Living and Working Conditions: Public welfare services and social exclusion: The development of consumer-oriented initiatives in the European Union, by N. Deakin, A. Davis and N. Thomas (Loughlinstown House, Shankill, Ireland, 1995).
122. I. Lienert, op. cit., p. 44.
123. J. Maggregor, S. Peterson and C. Schuftan: "Downsizing the civil service in developing countries: The golden handshake option revisited", in Public Administration and Development (Chichester, United Kingdom), Vol. 18, 1998, pp. 61-76.
124. ibid., p. 73.
125. ibid., p. 74.
126. G. Ullrich: "Privatization of services: What can cooperatives offer?", in Review of International Cooperation (Geneva, ICA, 1998), Vol. 91, No. 1, pp. 64-72.
127. C. Borzaga and A. Santuari: "Cooperatives and the new social services market", in Review of International Cooperation (London), Vol. 90, No. 1, 1997, pp. 11-17; see also V. Pesthoff: Empowering citizens as co-producers of social services: The case of day care in Sweden, Paper presented at the International Research Conference of the ICA in Bertinoro, 1997.
128. G. Baldacchino: "Humane privatization: Worker cooperative initiative in the public sector", in Journal of Cooperative Studies (Manchester), Vol. 31, No. 1, May 1998, pp. 39-49.
129. This section draws mainly on the World Labour Report 1997-98 (Geneva, ILO, 1997, pp. 44-46 and 135-136.
130. Comments from Lars-Öke Almqvist are based on interviews conducted at various times between May 1994 and August 1997 and on his own writings.
131. TUPE: Transfer of Undertakings (Protection of Employment) Regulations; see also Ch. 5.2 of this report.
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