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Technology and employment in the food and drink industries

Report for discussion at the, Technology and Employment in the Food and Drink Industries

Part 5    

Copyright ® 1999 International Labour Organization (ILO)

5. Coping with the effects
of technological and
structural change

Labour-saving technology cannot be installed without affecting the workforce, although the effect may be dampened in a high-growth market. Enterprise restructuring may result in redeployment of staff to other geographical locations, assignment to new tasks and responsibilities, lay-offs or early retirement. The closure of a plant in a small or isolated community may have a serious impact on the entire community. This chapter will review how employers and workers have dealt with the introduction of new technology in some companies, the issues and problems that have arisen as a result and how the social partners have tried to resolve them.

Technological change and industrial relations

Available information suggests that both employers' and workers' representatives generally recognize the need for companies to adopt new technology and to restructure work organization to remain competitive. The McKinsey report⁽¹⁾ prepared on the Australian food-processing industry found that "poor labour relations have tended to slow down rationalization, investment and process innovation in manufacturing and distribution". However, some trade union officials see the real motive behind changes in work organization and human resources management as being to weaken trade unions and their influence over workers.⁽²⁾ For example, a study⁽³⁾ on outsourcing showed that nearly half the enterprises surveyed (43 per cent) responded that reducing the number of unions, weakening union influence or making industrial relations smoother by abolishing restrictive work practices were important factors in outsourcing any particular activity. The McKinsey report also pointed out that several companies had made major breakthroughs to achieve significant productivity growth by reducing the number of unions that management had to deal with. A Heinz plant, for example, achieved in 18 months a 40 per cent increase in its productivity through measures that included negotiations to reduce the number of unions from 14 to four, to cut staff by 300 workers, and to reorganize the remaining workforce into product-based work teams.⁽⁴⁾ As elsewhere, collective bargaining in Australia has changed considerably over the past decade, evolving from a highly centralized system in which wage indexation and industry-wide awards were common, to a more decentralized one which increasingly emphasizes plant-level bargaining.⁽⁵⁾

In New Zealand, too, a major change has taken place with the introduction in 1991 of the Employment Contracts Act that moved away from national collective agreements towards contracts covering individual firms and plants. This new Act has given individual companies greater flexibility to deal with issues arising from technological development. However, it is the opinion of many employers that it was not technological change itself that had brought about this shift. In their view demarcation issues had formerly been a major impediment to growth and developments. The Act has enabled enterprises more readily to upskill employees by removing any ownership of work from a particular union.⁽⁶⁾ The trade unions in New Zealand accept that employers have the right to upgrade plants and machinery and to introduce more efficient methods of production to maintain competitiveness, while employers agree to retrain and upgrade the skills of or, if necessary, to redeploy employees whose jobs are seriously affected. The social partners have established a series of plant-level consultative committees to deal with changes in systems of skill-based payments.⁽⁷⁾

Joint mechanisms have also been set up in many large FD enterprises in Japan to ensure prior consultations between management and workers' representatives before implementing any significant measures that may affect employment and working conditions. Most workers' organizations seem to be in agreement with their social counterparts that both sides are faced with the same risk of being obliterated in the harsh business environment unless they overcome any difficulties jointly. The major principle underlying their negotiations is that company survival is the top priority, followed by employment security for existing staff.⁽⁸⁾

In the United Kingdom, employers and workers are not compelled to engage in collective bargaining, but a voluntarist approach to collective bargaining has been a central feature of industrial relations. The system has become more decentralized, however, as negotiations today increasingly take place at enterprise level. Despite these changes, collective bargaining remains an important feature of the industrial relations system in the United Kingdom as, according to the 1995 Labour Force Survey, 58 per cent of workers in the FD industries were employed at enterprises where trade unions played a significant role in collective bargaining. When restructuring involves collective redundancies, employers are legally obliged to consult with worker representatives in advance so as to minimize any adverse effects.⁽⁹⁾

The results of many United Kingdom studies⁽¹⁰⁾ regarding how technological change should be managed suggest that good practice in this regard should stress the need for careful planning for implementation, adequate consultation with employees from the outset to ensure their cooperation and the provision of appropriate training for affected staff. Many managers interviewed thought that the planning period of up to two years was vital, during which time possible equipment suppliers would be evaluated, the most suitable equipment chosen and installed, the training of staff provided and employees adapted to changes in working methods and patterns. Both management and workers' representatives thought early consultations were essential when training and work reorganization were involved, but particularly when changes were to result in job losses. Recent case-studies show a mixed picture regarding the degree of management-worker consultations in the FD enterprises in the United Kingdom.⁽¹¹⁾ The general situation has been that when trade unions are present in a company where technological change is to be introduced, workers' representatives are usually involved in consultations. However, their involvement is usually limited to bargaining on such issues as pay, occupational safety and health, skills training and redundancies; there is little consultation on strategic issues such as investment and the choice of technology. According to one study⁽¹²⁾ on FD industries, consultations regarding investment were held in a quarter of the enterprises studied and regarding equipment in a third of the firms. However, it has been found that management-worker negotiations concerning technological change were more frequently held in the FD industries than in engineering industries.⁽¹³⁾ In one example, during the process of introducing teamwork in the 1980s, a company established a monitoring group in each plant, consisting of trade union representatives, other employees and first-line managers. The company also recruited from the workforce so-called facilitators who were engaged in developing and improving semi-autonomous teams with a higher degree of responsibility and accountability. There were usually eight facilitators to cover a workforce of about 1,500 workers made up of 40 teams. The major role of the facilitators was to build trust between management and shop-floor workers, thus it was important to select individuals who were acceptable to everyone. They played a key role in identifying difficulties and areas of potential improvement, building the problem-solving capability of teams and developing self-audit schemes. The communication role of monitoring groups or facilitators has been crucial in many FD companies in keeping up with technological development as well as raising productivity.

A case-study⁽¹⁴⁾ on the FD industries in Mexico found that some companies had faced resistance from workers when innovations in work organization associated with new technology were introduced. In order to implement changes as smoothly as possible, a bean-canning company, for example, undertook a programme of interaction and motivation, involving management, union officials and other workers. The programme included talks and meals in which management and the entire plant staff joined together, and ensured union involvement in the implementation of each individual stage of the innovation process. However, the workers resisted the changes in the form of go-slow tactics and sabotage, such as concealing metal objects in company products. In response, the company began to apply the rights and duties laid down in the collective agreement more strictly, hoping that this stricter approach adopted in the early stage of work process innovation could be relaxed as participatory work organization became a routine practice.

In recent years the Bakery, Confectionery and Tobacco Workers' International Unions (BCTWIU) in the United States has pursued the goal of securing consultation prior to the introduction of new technology and new forms of work organization in the plants where they represent workers. It has encouraged the selection of a skill-based and skill-enhancing socio-technical design style⁽¹⁵⁾ that preserves jobs for front-line workers. Despite repeated disruptions caused by management turnover in the companies where they represent workers, BCTWIU's fragile partnerships with management have survived and demonstrate the potential for both improved labour relations and processes of technological and workplace innovations. One place where the BCTWIU-management partnership has been tested concerning the introduction of new technology and teamwork concepts is Nabisco's plant in Richmond, Virginia.⁽¹⁶⁾ The partnership has provided from its inception the basis for arranging new forms of work. Capability studies were carried out and process operating guidelines developed in 1991. Nabisco and BCTWIU renewed their partnership in October 1994, emphasizing five core partnership elements including empowerment, work redesign, changing roles and responsibilities, employment security and rewards. They also developed a "joint vision matrix" which outlines "the stages of organizational development from a traditional organizational structure to a flat, non-authoritarian, cross-functional structure and a work group-based culture that is mutually supportive for company and union goals".⁽¹⁷⁾ Nabisco's top management's commitment to the principle of skill-based design allowed the union to focus more on the selection of technology, training, the configuration of operator stations and changing roles and responsibilities associated with new technology. A group consisting of seven union officials and five managers was involved in the first stage -- the macro design -- and helped in the analysis of the plant's organizational structure, prescribing the various roles and responsibilities of the future work teams. During the entire process, the different concerns of corporate engineers, managers, worker representatives and front-line workers shaped the design style. For example, the engineers' choice was based on the way the distributed control systems were configured, while managers were concerned about redesign processes, training and compensation programmes. On the other hand, union leaders were interested in how to mobilize union members to take advantage of organizational and technological change, while front-line workers were concerned about the extent of the new roles and responsibilities they desired. Nevertheless, technology seemed to have developed beyond the control of those who were supposed to be making the decisions. Despite efforts to preserve workers' knowledge and skills and to minimize redundancies, workers, union leaders, managers and engineers all agreed that new technology inevitably reduced jobs. The rapid pace of technological change also limits the extent to which workers are able to reflect their interests in design. Moreover, market pressure to introduce products quickly also prevents the extensive involvement of workers in design decisions. Although Nabisco workers are involved in technology customization to different degrees, their participation is significantly reduced compared to initial expectations, as the engineers at the Richmond plant recognize. They see that it is for the corporate engineers who control technology selection to ensure that production systems across all bakeries are standardized, that Nabisco's purchasing power is increased and that individual plants are not doing anything in conflict with corporate policy. The dominant role is played by the corporate engineers in technology selection, but the management and the workers at the Richmond plant are likely to continue pursuing the positive trend of a skill-based path to enhance product quality and company performance.⁽¹⁸⁾

In several countries in Europe (e.g. France, Germany, Greece, the Netherlands and Spain), the establishment of a European works council is a legal requirement for enterprises with more than 1,000 employees. Some 90 multinational companies based in the United Kingdom, each with over 1,000 workers in other EU States, will also be required to establish works councils for their workers outside the United Kingdom.⁽¹⁹⁾ However, the European Works Council (EWC) Directive does not make it mandatory for companies to deal with trade unions. Given this fact, the IUF and its European regional organization ECF-IUF have adopted guidelines to ensure that any EWC to be established would include, as a minimum, union recognition, all-European coverage and joint union-management responsibility in the structure and operations of the councils.⁽²⁰⁾ A substantial number of multinational companies have already voluntarily negotiated certain information and consultation arrangements on an international basis with European trade unions. These arrangements may be made by formal signed agreements, by exchange of letters or informally. They all include provisions on the exchange of information, and most include some provisions for consultation but not codetermination. While they generally involve workers' organizations at different levels, their roles are not always defined explicitly,⁽²¹⁾ and this can become a bone of contention between management and trade unions. A recent information and consultation agreement entitled "Joint understanding in the event of changes in business activities affecting employment or working conditions" formulated along the lines of an EWC in the FD industries was concluded in May 1997 between Danone and the IUF.⁽²²⁾ It builds and expands upon the agreements signed previously by both parties in the areas of union rights, training and access to information, and covers all Danone plants in Europe. The new terms include, among other things, the requirement for the company to inform the unions concerned at least three months in advance of changes in respect of employment and working conditions resulting from new technology and of company restructuring. Unions have the right to present alternative proposals, and management is obliged to evaluate and respond to these proposals. When redundancies are involved, permanent staff are protected over temporary and contract workers, while those whose employment has been affected are guaranteed retraining at company expense. The company also agrees to minimize the negative impact of job losses on the affected communities by working together with local authorities to stimulate economic development and to create jobs.

Even with the best intentions, it will require a tremendous effort by all the parties concerned to achieve the full implementation of terms such as those enumerated above. As the IUF reports,⁽²³⁾ Danone's restructuring of European operations has resulted in the elimination of between 1,200 and 2,000 jobs annually in recent years. Concluding an agreement was an important step for improved industrial relations as well as worker protection, but such an agreement is not likely to protect non-regular workers who risk becoming even more vulnerable.

Adjustment measures

In cases of company restructuring and changing work organization, workers' representatives typically seek to preserve employment, if necessary, through job-sharing, redeployment, secondment or intra-group transfer. However, if such options are not possible, they make it their goal to ensure that separation takes place on terms that are as generous as possible, e.g. voluntary early retirements with special packages, or other incentives.

In the food-processing industry in Australia, the redundancy package usually includes four weeks of severance pay, four weeks of long-service pay for each year of service, in addition to all accumulated sick, annual and long-service leaves. As regards maintenance workers, many were said to be reluctant to change their work or allow production staff to do their work because of their pride in being more highly skilled than other workers. Since they have been offered very attractive redundancy packages providing at least one year's salary, they are reported to have often provoked management into firing them, with a view to returning to the same plant shortly afterwards as subcontractors.⁽²⁴⁾ Thus, some maintenance workers may not be adversely affected by redundancy, but it is different for younger workers who have difficulty in finding alternative employment, even if redundancy packages allow them to manage for a time.

In Canada, a chocolate confectionery plant offers those who are to be laid off as a result of new technology a severance package under the collective agreement, in addition to the entitlement to a full pension if they are 60 years old or above. A distillery and bottling plant provides its laid-off workers with an increase in the supplementary unemployment benefit of between C$100 and C$110 weekly, in addition to what they are entitled to under unemployment insurance.⁽²⁵⁾

In the case of redundancies for FD workers in Belgium, those with at least 12 months of seniority are entitled to supplementary compensation amounting to a maximum of BF60 per day if they are under 21 years of age and a maximum of BF90 per day for those 21 years of age or above, for a maximum of 53 days. This is in addition to what they receive as unemployment compensation. However, the maximum duration of entitlement to this supplementary compensation is reduced to 45 days in the bakery sector, while no supplementary payment is available for vegetable-processing workers. On the other hand, if workers wish to opt for early retirement, those who have worked 25 years in regular employment may take it as from the age of 58. Those who have worked 33 years, including 20 years on night shift work, may take it as from the age of 55.⁽²⁶⁾ Workers aged 50 years and over may opt to leave their jobs and receive both separation compensation and unemployment compensation for older workers.⁽²⁷⁾

Many drivers engaged in the distribution side of the FD industries in Germany have been made redundant following the contracting out of the bulk of such activities. While lay-offs occur mainly in connection with plant closures, early retirement programmes have largely been discontinued as a result of the statutory changes in effect from 1997.⁽²⁸⁾

FD workers in Ghana are also reported to have been affected by lay-offs and early retirement, particularly since 1990. The conditions and compensation associated with such measures have been negotiated between the enterprise concerned and the trade union representing the workers in the FD industries.⁽²⁹⁾

Employment in the FD industries in Hungary dropped by more than 70,000 between 1989 and 1996. This was mainly due to lay-offs associated with the privatization process, particularly when foreign investors were involved. Foreign partners in the Hungarian FD industries have generally encouraged the workers affected to take early retirement rather than dismissing them. Firms with low productivity and new technology have also eliminated a number of jobs. According to the Labour Code, employers who employ at least 30 people and intend to lay off either at least 25 per cent of them, or 50 workers, whichever is lower, must notify both the labour centre and the workers' organizations three months prior to the cessation of employment. They are also obliged to notify the workers concerned as well as the competent labour office within 30 days of all decisions concerning employment reductions affecting at least ten persons. In the past lay-offs were dealt with using passive measures that included the provision of financial support in the form of unemployment benefits, early retirement benefits and other financial means and subsidies. Encouraging young women with children to stay at home and providing longer educational opportunities for young people to delay their entry into the labour market were other measures employed. Given the fact that these palliative measures were not sufficient to ease the problem of unemployment, the Government now promotes active measures which include special training and retraining programmes, self-employment assistance, wage subsidies for hiring the long-term unemployed, public work, job-creation investment, export promotion and work/job sharing through part-time and seasonal employment. As for the early retirement measures applicable to older workers, two schemes are offered to those under the threat of being laid off. One applies to persons who have been jobless for more than six months, have had 20 or more years of service and are within three years of normal retirement. The other is for those who have worked enough years to be eligible for an old-age pension and are within five years of normal retirement.⁽³⁰⁾

Voluntary retirement schemes have helped some large enterprises to reduce their workforce in India as companies try to modernize and upgrade their production with new technology. In some companies, the redeployment of staff in plants with an overcapacity of workers was still possible because of expanding operations. In companies where workers are unionized, retrenchment is a difficult option to implement. In such cases, overstaffing is solved by freezing recruitment.⁽³¹⁾

Management and workers' unions in many companies in Japan agree that regular employment should be saved in so far as possible. Perhaps for this reason, some workers' organizations reported that there had not been any cases of lay-offs or early retirement. However, many companies have introduced and are applying varying measures of early retirement to a number of their employees. A number of companies have lowered the age of eligibility for early retirement to 50, or even to 45 in some cases. Those who opt for early retirement are usually entitled to one year's salary, in addition to full separation benefits. In some companies, workers between 45 and 50 years of age who are planning to take early retirement are entitled to vocational training at company expense or six months of paid leave to prepare for a new career. Whatever the conditions of early retirement may be, the workers' organizations stress that it should be voluntary.⁽³²⁾ However, the above practices are applicable mainly to those in regular employment. In view of the fact that many workers in the FD industries, particularly women, are employed on a part-time basis, they are not protected by such measures. A case-study⁽³³⁾ on Japan reported on the early retirement system at a major food company. All the employees in the 43-57 age bracket, with at least 20 years of consecutive service, had been offered early retirement packages. To take an example, those in the 43-47 age bracket had been offered a supplementary lump sum of 35 million yen, in addition to what they would normally receive as their separation lump sum calculated on the basis of the number of years of service. The amount of this supplementary lump sum was lowered to 30 million yen for those in the 48-49 bracket, 25 million yen for those aged 50 and 51, and 10 million yen for those 56 and 57 years of age. It was reported that approximately 500 persons had applied for this system during the last five years, which accounted for 17 per cent of all employees.

In New Zealand, too, redeployment and relocation are sought as much as possible as alternatives to redundancy. However, workers who are laid off are entitled to compensation equivalent to a maximum of 76 weeks' pay for those with 25 or more years of service. Those under redundancy notice are also entitled to time off for up to three job interviews, in addition to counselling, job search assistance and budgetary advice by the employer. A consultative committee of employer and union representatives ensures that these measures are implemented.⁽³⁴⁾

A case-study on the United Kingdom⁽³⁵⁾ found that among those who had been affected by factory closures and had been offered jobs in new locations for which they were qualified surprisingly few were willing to move. Despite the initial attractiveness of lump-sum compensation offered for relocation, many felt confident about finding alternative employment in their home towns even if they were in economically depressed areas. Others opted for early retirement rather than face the stress of relocation as well as the adjustment to new employment, including retraining. Early retirement packages varied from one company to another, some being very generous. Many companies pursue the policy of retaining regular employees while freezing new recruitment. However, this is reported to be resulting in a high average workforce age, causing concern over a future scarcity of experienced staff. A similar concern was also expressed in other countries. The study also found that some firms tried to assist the communities affected by plant closures through various programmes. These included training in transferable skills in cooperation with local job centres assessing job availability in the area, and schemes in which capital grants are provided to affected workers to establish small-scale enterprises.

Most of the measures in various countries described above are applicable to regular, permanent workers only. Very little information is available concerning the measures taken for non-regular workers. In view of the fact that the FD industries employ a significant number of non-regular workers, a considerable number of workers are believed to be excluded from enjoying the benefits of the measures described above.

Training for new skill requirements and
better work environment

As already discussed in Chapter 3, skill needs are changing for the entire workforce, from managerial staff down to production workers. Faced with this situation, more enterprises have become serious about providing continuous and adequate training on or off their premises to ensure that their employees can better cope with today's competitive market environment.

Training programmes in the FD industries cover a wide range of technical subjects, such as machine operations of all kinds, computer operation, production management, microbiology, quality control, hygiene and sanitation, safety and health, in addition to communication, teamwork, leadership and skills. Workers' organizations insist that training opportunities be given to all workers fairly and equitably. Employers often take the same view to ensure smooth job rotation among the staff. In some companies, training is in principle available for everyone, but is in fact given to certain people only, such as maintenance and marketing staff. In certain companies, the persons to be trained are selected after discussions between the shop stewards and management, but there are those who feel that some people are being favoured over others and are hand-picked for training, giving them the chance of better jobs and higher incomes.⁽³⁶⁾

Some feelings of dissatisfaction have been expressed among workers regarding the training and retraining programmes made available to them. Some felt that the content of the training was not what had been promised. Others felt that companies were interested in providing training only to meet company needs, while more consideration should be given to promoting workers' employability in view of the fact that many may eventually face lay-offs and early retirement.⁽³⁷⁾ In some cases, workers complained that new qualifications and skills obtained through training did not lead to better paying jobs. For example, women in Denmark who attended fork-lift courses only had limited access to such work after the completion of the training, probably due to the fact that the job was traditionally held by men. In many developing countries training is often reserved for managerial or technical employees rather than production workers.⁽³⁸⁾

A case-study conducted in India found that in most companies training was seriously lacking, particularly for production workers, despite the fact that its importance has generally been recognized. Nevertheless, one large public enterprise, for example, is paying increasing attention to training its employees and the quality and job-related specificity of training programmes. The training department of this company liaises with specialized training institutes where individual workers undergo training programmes of varying duration, usually between one and three weeks. The number of employees to undergo such training were 65 in 1994, 69 in 1995 and 37 in 1996.⁽³⁹⁾ In view of the fact that the company employed approximately 2,600 workers in 1994, the portion of those to benefit from training was very limited. This company also organizes shop-floor induction training for new recruits, refresher training, redeployment training for those about to be redeployed and developmental training for eligible individuals based on performance appraisals and evaluations of individual potential. Usually, production supervisors and other senior technicians in the company serve as trainers in these programmes. While maintenance training tends to be more regular and thorough, many shop-floor training courses tend to be ad hoc in nature and conducted with varying degrees of aptitude and skill. The need to structure shop-floor training and to develop manuals for such training programmes is increasingly being recognized, but little has yet been accomplished in this regard.⁽⁴⁰⁾

The companies covered in a Mexican case-study have generally developed extensive training programmes to better prepare their staff for new technology and work organization, and to obtain ISO quality assurance certification. For example, a confectionery company has developed different training curricula for three levels of trainees, namely top management, middle management and line workers. The training programme for top management was the basis for launching the firm's overall quality strategy, and thus included such topics as concepts of total quality, quality control tools, quality assurance and ISO, teamwork, instructor training and auditor training. The training designed for middle management is centred around promoting leadership and thus covers such topics as communication with staff, participation in strategic planning, progress reviews and recognition of staff achievements. The programme for line workers mainly emphasizes quality training, multiskilling, teamwork and ability to follow instruction manuals, as well as the development of general knowledge.⁽⁴¹⁾

In addition to the technical centre that opened in the late 1980s and the materials developed for mandatory training on safety and health, Nabisco's Richmond, United States, plant offers several training and educational programmes for the staff. For these initiatives, the plant relies essentially on an adult educator and learning leaders hired by the hour to help workers with business, technical and social skills, including basic skills such as English as a second language, basic mathematics and reading. Furthermore, the company offers computer skills training, in which about 20 per cent of the workforce enrol in their own time, and work-specific training, such as supervisory process control, which is offered in company time. The average number of hours of training given at this plant, including mandatory, basic and computer courses, is estimated to be about 40 hours per worker per year. Some front-line workers feel this is not enough and suggest that more structured training be given as many workers adapt to the continual changes more through informal channels than through formal training.⁽⁴²⁾

A number of companies have a specific budget allocation for staff training. A large brewery based in the United Kingdom was reported to have spent £4 million in 1993-94 on operator training.⁽⁴³⁾ In Israel, employers are encouraged by the employers' association to set aside a fixed sum for staff training. It is currently being recommended that approximately 0.5-2.5 per cent of total sales turnover be allocated for such purposes in view of constant and rapid developments in all aspects of technology.⁽⁴⁴⁾ The dairy industry in New Zealand invests about 4 per cent of its annual wage bill in off-the-job training, and the number of employees participating in industry-coordinated training increased by over 100 per cent between 1992 and 1995.⁽⁴⁵⁾

Available information indicates that training activities by United Kingdom employers reached a high point in 1996. In addition to on-the-job training, 46 per cent of employees in enterprises with 20 or more workers were reported to have received training outside the workplace that year. The proportion was smaller in firms with fewer workers because of the difficulty of releasing them during working hours. The case-study also found that the higher the qualifications employees had, the more likely they were to receive further training, although the more qualified employees underwent training of shorter duration. Training provided by employers generally placed emphasis on quality management, information technology, multiskilling and TQM or ISO 9000.⁽⁴⁶⁾

Rapidly changing skill requirements also have important implications for the training of young persons about to enter the labour market. Danone, the largest multinational company based in France, is reported to receive approximately 14,000 job applications annually from young candidates. However, it has also been pointed out that many of them are neither well prepared in technical knowledge nor have the capacity to adapt to Danone's rapidly changing skill requirements and work environment, while potential to adapt would allow young people to move from one post to another and from one company to another within the group.⁽⁴⁷⁾ In view of this situation, both enterprises and public and private training institutions need to cooperate and coordinate their training and retraining curricula to ensure that the supply and demand of skills are closely matched.

In India a number of specialized institutions provide training for employment in the FD industries. For example, a total of 32 formal training institutions offer a certificate, diploma or postgraduate degree in varying areas, such as canning, baking, agriculture, horticulture, dairy, fishery and food technology. However, most existing courses are said to be too theoretical and textbook oriented, lacking applicability to new technology or practical training. In addition to these formal institutions, there are over 50 community canning centres throughout the country which train housewives and entrepreneurs in the technology of fruit and vegetable processing and preservation. The Ministry of Food Processing also assists different organizations in setting up centres to impart processing skills concerning various types of food materials. It is estimated that between 4,000 and 5,000 small entrepreneurs are trained annually in such centres.⁽⁴⁸⁾

Since the Industry Training Act came into effect in 1992, training in the dairy industry in New Zealand has been under the control of the Dairy Industry Training Organization (DITO), in which there is no union representation. The Dairy Research Institute is a training provider to DITO, offering 1,600 hours of skills training courses per year. It also offers, in conjunction with a local university, undergraduate and postgraduate diplomas. Large firms arrange extensive training courses with local polytechnic institutes, universities and state-owned research institutes, in addition to running their own off-site training centres. Courses cover a variety of subjects depending on the needs of trainees, but team skills, microbiological control, the basic components of automation, quality assurance and the understanding of the ISO 9000 series standards are generally emphasized.⁽⁴⁹⁾

In Belgium the Vocational Training Institute for workers in the food industry organizes different training courses, such as those on the Hazard Analysis and Critical Control Point (HACCP) system, hygiene, information technology and basic training for the FD industries. The Institute also pays certain fees to employers for organizing training in their enterprises at the time of restructuring, collective lay-offs and the redeployment of staff, in addition to training to improve workers' skills. The training by the Institute is basically targeted at workers with few qualifications,⁽⁵⁰⁾ as it is they who have been the most adversely affected by new technology.

Workers' organizations generally try to preserve as many jobs as possible for their fellow workers whose job security is being threatened by new technology and new forms of work organization. Many do realize, however, that it is not possible to save every job, no matter how skilfully they try to negotiate with employers. In order to cope with the situation more realistically, some insist on the establishment of a broad-based, nationally recognized competence certificate system to enable workers to move elsewhere. This is being newly implemented in Australia, and it is still too early to know its effect.⁽⁵¹⁾ Even if this certification system proves to be effective during the initial trial period, it will have to be constantly evaluated and updated in order to help workers to adapt to work environments that may change even faster in the future.

The kinds of training and retraining programmes described above are largely designed to enable FD workers to cope better with new skill demands in new work environments principally shaped by new technology. In addition to such skills, craft skills in certain branches of the FD industries are particularly important for product quality as well as value added. The results of a comparative study⁽⁵²⁾ on the biscuit industry in Britain, France, Germany and the Netherlands illustrate this point. The study made a detailed comparison of productivity, machinery and skills in matched samples of plants in the single industry in the four countries. The median plant size in the sample was largest in Britain, with the number of workers well over 1,000. The median size in the other countries ranged from 280 to 380 employees. The study found that between 1980 and 1990, the output per employee in terms of volume increased by 84 per cent in Britain, by 80 per cent in Germany, by 49 per cent in the Netherlands and by 39 per cent in France. However, the distribution of the products according to quality grade showed that only 5 per cent of the volume of the British-made biscuits was classified as high quality, as opposed to 35 per cent of the German-made, 15 per cent of the Dutch-made and 10 per cent of the French-made biscuits. Moreover, the index of 100 for the average retail price per ton in Britain was the lowest compared to 230 in Germany, 135 in the Netherlands and 125 in France. This also resulted in the lowest average value added per ton for Britain with the index number of 100, as opposed to 175 for Germany, 115 for France and 110 for the Netherlands.

The study also compared the average age of machinery in biscuit plant samples in the four countries to see how equipment affected productivity. New mixing machines tend to be larger and faster, and new ovens are usually wider and longer to permit faster product throughput. New equipment is also more controllable and responsive to adjustments made by operators, resulting in greater accuracy and less wastage. The results showed that about half of all equipment in Britain had been installed during the last ten years compared to 40 per cent in Germany and 30 per cent in France. This indicated that newer capital equipment did not necessarily lead to higher productivity.

In all these countries wrapping and packing work was mainly handled by unskilled workers, but the difference arose in the proportion of craft-trained qualified staff in the areas of process, engineering and technical support departments and senior management. For example, 85 per cent of the German employees were considered to be qualified to that level, compared to 65 per cent in the Netherlands, 45 per cent in France and 25 per cent in Britain. This enabled German plants to specialize in small and medium-batch production of high quality, high value-added, multi-textured biscuits. On the other hand, production in Britain tended to be oriented towards longer runs of relatively simple types of low value-added biscuits. The results suggest the importance of the kind of skills training needed for adding more value to products since it is one way for the FD industries to grow in the saturated market of the industrialized countries.

Thorough training in safety and health also leads to greater well-being for the workforce as well as to higher productivity for the company. Although many workers' organizations in large, modern companies reported improved safety and health in their work environment, the results of a survey conducted in Japan⁽⁵³⁾ give a different picture. For example, 68.5 per cent of the respondents in the FDT industries reported that they had never received training concerning how some of the dangerous tasks might affect their health. This was the second highest proportion in manufacturing, following after 83.7 per cent among clothing, leather and footwear workers. The fact that many FD enterprises are small and medium-sized may explain this situation.

A more highly skilled workforce is essential for any company to become more productive and competitive. Acquiring higher and multiple skills gives workers better employment security. Safer and healthier workplaces can also contribute to enterprise productivity and growth, which may in turn lead to job security for the workforce. In view of this fact, management and workers have a common interest in facing and overcoming together any existing and new problems relating to employment and the various training programmes associated with changing technology.

1.  McKinsey Management Consultants: Growth platforms for a competitive Australia: Case-study 1, food processing (Sydney, 1996), p. 58.

2.  J.A. Burns with Marian Garcia: The impact of technical change on employment in the UK food and drink industries, project for the ILO (University of Reading, July 1997), p. 50.

3.  J. Benson and N. Ieronimo: "Outsourcing decisions: Evidence from Australia-based enterprises", in International Labour Review (Geneva, ILO), Vol. 135 (1996), No. 1, p. 66.

4.  McKinsey Management Consultants: op. cit., p. 66.

5.  Bureau of Industry Economics: Agri-food case-study: Micro reform -- Impacts on firms (Canberra, Australian Government Publishing Service, May 1996), Report 96/11, p. 92.

6.  Information provided by the New Zealand Employers' Federation.

7.  Information provided by the New Zealand Dairy Workers' Union.

8.  Naoki Kuriyama: Case-studies on technology and employment in the food and drink industries in Japan (May, 1997) unpublished paper; and information provided by IUF's Japan Coordinating Council (IUF-JCC).

9.  Information provided by the Department for Education and Employment, United Kingdom.

10.  For example, that undertaken by the Food and Drink Manufacturing Sector Group of the National Economic Development Council (NEDC) entitled Jobs and Technology in the Food and Drink Manufacturing Industry (London, 1990), cited in Burns with Garcia, op. cit., p. 53.

11.  Burns with Garcia, op. cit., pp. 38-39.

12.  E. Batstone and S. Gourlay: Unions, unemployment and innovation (Oxford, Blackwell, 1986), cited in Burns with Garcia, op. cit., p. 39.

13.  Burns with Garcia, op. cit.

14.  Anselmo García, Andrés Hernandez and Leonard Mertens: Technology and employment in the Mexican food and drink industry, Sectoral Activities Programme (ILO, Mar. 1997), unpublished paper, pp. 34-35.

15.  Design styles can be largely divided into two groups: technocentric and skill-based designs. The former can be characterized as that which focuses on efficiency, cutting costs and narrow tasks; it has top-level hierarchical control; information is concentrated in centralized management and engineering staff who also exclusively make design decisions; it standardizes output through the centralization of process settings and modification; technology compensates for human errors. Skill-based design focuses on overall organizational performance and quality; it encourages functional interdependence and broad work responsibilities; it relies on workers' discretion and judgement, and managers and engineers provide support and resources; information is made freely available throughout the organization; it allows workers to participate in all phases of design; workers must ensure the smooth operation of complex technological systems; output is standardized by a short feedback adjustment loop, which requires decision-making at the lowest possible level; technology is used to take advantage of the knowledge and skills of workers. (H. Salzman: "Participation design and engineering practices for high performance work organizations", in Todd Cherkasky: Changing technology: A case-study of Nabisco Inc. and Bakery, Confectionery and Tobacco Workers' International Union, work organization and plant operation (Washington, DC, Work and Technology Institute, revised July 1997), unpublished report, p. 9.

16.  Cherkasky, op. cit.

17.  ibid., p. 4.

18.  ibid.

19.  FORCE (Formation continue en Europe): Training in the agrofood sector: A survey of the FORCE Programme (Brussels, Commission of the European Communities, June 1993), p. 51; and Richard Donkin: "Group creates Europe-wide works council", in Financial Times (London), 9 Nov. 1994.

20.  IUF: Beverages Bulletin: Breweries (Geneva, 1996), No. 1, p. 3.

21.  IUF: Executive Committee meeting -- Documentation and minutes (Geneva, Apr. 1994), Item 6(d), Appendix 1.

22.  IUF: News Bulletin (Geneva, 1997), No. 3-5, p. 7.

23.  ibid.

24.  Max Ogden: Developing an industry strategy for food processing: An Australian experience (Australia Council of Trade Unions, 1996), unpublished paper, pp. 17-18.

25.  Information provided by the National Automobile, Aerospace, Transportation and General Workers' Union of Canada (CAW-Canada).

26.  Information provided by Centrale Chrétienne de l'alimentation et des services (CCAS), Belgium.

27.  Information provided by Alimentation-Horeca-Services FGTB, Belgium.

28.  Information provided by the Government of Germany.

29.  Information provided by the Industrial and Commercial Workers Union (ICU), Ghana.

30.  Judit Kiss: Technology and employment in the Hungarian food and drink industry (Budapest, Institute for World Economics of the Hungarian Academy of Sciences, Mar. 1997), unpublished paper, pp. 38-40; and Judit Kiss: Privatization and foreign capital in the Hungarian food industry (Budapest, Institute for World Economics of the Hungarian Academy of Sciences, June 1994), Working Paper No. 34, p. 17.

31.  Veena Nabar: Technology and employment in Indian food and drinks industry: Some case-studies (New Delhi, July 1997), unpublished paper, pp. 21-22.

32.  Information provided by IUF-JCC.

33.  Kuriyama, op. cit., pp. 24-25.

34.  Information provided by the New Zealand Dairy Workers' Union.

35.  Burns with Garcia, op. cit., p. 42.

36.  Information provided by various employers' and workers' organizations.

37.  Information provided by various workers' organizations.

38.  IUF: Nestlé Bulletin (Geneva, 1994), No. 41, pp. 1-2.

39.  Nabar, op. cit.

40.  ibid., p. 11.

41.  García et al., op. cit., pp. 23-24.

42.  Cherkasky, op. cit., pp. 14-15.

43.  Information provided by the Transport and General Worker's Union, United Kingdom.

44.  Information provided by the Manufacturers' Association of Israel.

45.  Information provided by the New Zealand Dairy Workers' Union.

46.  Burns with Garcia, op. cit., pp. 42-43.

47.  "L'emploi" in Avenirs: Agriculture et agro-alimentaire (Paris, Office national d'information sur les enseignements et les professions, 1992), No. 438, pp. 49-50.

48.  Nabar, op. cit., pp. 5 and 45.

49.  Information provided by the New Zealand Dairy Workers' Union.

50.  Information provided by CCAS, Belgium.

51.  Ogden, op. cit., p. 17.

52.  Geoff Mason, Bart van Ark and Karin Wagner: "Productivity, product quality and workforce skills: Food processing in four European countries", in National Institute Economic Review (London, National Institute of Economic and Social Research), 1/94, No. 147, Feb. 1994, pp. 62-83.

53.  Ministry of Labour, Japan, Policy Planning and Research Department: Survey on Labour Environment, 1991 (Tokyo, 1993), p. 197.

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