![[*]](../../images/pin_bl.gif){kind=small}
In the area of industrial relations, developments are needed beyond the sphere of collective bargaining as the organization of work needs not only to be flexible but also to provide satisfaction to those who produceThe ILO should work as a centre of expertise and not merely as an organization to set standards and control their applicationThe true challenge today is participation.. This development is not based on moral or humanitarian motivation but on economic interestsThe ILO will need to find means to get involved in processes of labour relations where they reach beyond and across national borders
Discussion paper by
Professor R.D. Lansbury, Professor, Department of Industrial
![[*]](../../images/blueball.gif){kind=small}
Mr. W. Brett, Vice-Chairman of the Workers' group of the ILO Governing Body and General Secretary of the Institution of Professional Managers and Specialists, UK
Mr. G. Trogen, Director-General, ALMEGA Industrial and Chemical Association, Sweden
Mr. M. Malentacchi, General Secretary, International Metalworkers' Federation, Geneva
M. M. Barde, Secrétaire général, Fédération des Syndicats patronaux, Geneva
Mr. K. Tapiola, Deputy Director-General, ILO
Summary of proceedings:
Globalization is occurring at the macro-economic level; not all factors changing the nature of enterprises are a result of globalization. There is strong pressure from globalization on enterprises to change under four aspects:
the traditional bureaucratic type of the enterprise organization is ill equipped for change;
firms are becoming increasingly flexible by introducing lean production and lean management styles;
new alliances are required between small- and medium-sized enterprises in the form of networks;
firms are becoming a blend of local and global organization: a footloose, polycentric enterprise is developing which is less bound to a home country than usual.
In the area of industrial relations, developments are needed beyond the sphere of collective bargaining as the organization of work needs not only to be flexible but also to provide satisfaction to those who produce. The formation of skills would therefore not only aim at improving production but also at the further development of the workers' personal capacities.
Payment systems are required not only to better reflect differences in productivity but also to foster greater equity. Employment systems need to enhance the employability of workers and provide employment security. New systems are needed to give workers a voice and an influence in the decision-making of the enterprise, through work councils for example.
The Role of the ILO
Workers and their organizations will continue to require the traditional functions of the ILO, particularly in developing countries and countries in transition.
The ILO will need to re-examine the effectiveness of labour standards within member countries. Also, there is a greater role for the ILO in providing assistance and transferring knowledge between member countries.
Not every job is affected by globalization because of the continuing great diversity of enterprises, governments and other organizations. At the time when the ILO was founded, there was fear of social revolution; a one-sided influence by employers on the development of labour relations could lead to serious social contention at the present time.
Facing the challenges brought about by globalization, trade unions should be seen as part of the solution and not part of the problem. Employers should strive to make it possible for unions to play their proper role. To enable workers to accept the changes ahead, the right circumstances need to be created to provide security and confidence. There are great challenges for both employers and unions to make enterprises more viable and successful.
The ILO should work as a centre of expertise and not merely as an organization to set standards and control their application. As an international organization it is in the best position to provide information to support security and confidence among workers. At the same time, there is insecurity in the evolution of enterprises themselves. Many enterprises which are important today may not exist ten years from now.
Social partnership within the enterprise
In addition to lobbying and promoting employers' views, enterprises expect the provision of a framework and negotiating skills from their organizations at the enterprise level, as well as at the national, sector or occupational levels. Smaller enterprises need particular assistance in negotiations and such direct services as information and permanent training for supervisors on ensuring the quality of production as well as the quality of the labour force.
Enterprises expect unions to be representative. They should be prepared to commit themselves and ensure that their commitments actually materialize.
The true challenge today is participation. This includes workers' participation in the organization of work and in striving for high quality of products and for the competitiveness of the enterprise. This development is not based on moral or humanitarian motivation but on economic interests. Social dialogue today is not limited to negotiation only but comprises the totality of relations on the labour market.
Global and local
Enterprises by their nature are always local, even transnationals. Likewise, labour markets do not operate in a strictly national context but rather somewhere between the national level and the enterprise level, depending on variations in the forms of partnership from country to country and even between industrialised countries.
In the Nordic countries there are collective agreements at both national and sectoral levels. Central bargaining, removed from the actual situation at a given enterprise. has proved ineffective for some time. The social partners now seek fewer collective agreements at the central level and more agreements within enterprises. This type of social partnership is sometimes called "agile organization".
The social partners have a new role in this context: the unions should try less to play the role of a cartel organizing the sale of labour but rather provide services to their members. Likewise, the employers' organizations would perhaps do best by providing the services of lawyers and other consultants.
The entire range of negotiations needs to be reconsidered. Attempts in Sweden, Germany, Italy or France to dismantle national negotiation systems try to deny that these negotiations are the basis of national economies. Discussion of the conditions of production can only be carried out at the enterprise level if it is done in a global context. A model is thus needed to negotiate national and international agreements.
While international negotiation already exists between certain multinational enterprises and trade unions, the employers' organizations need to create an international level of responsibility among themselves, They have so far refused to create an international organization for international agreements.
Large companies are out-sourcing jobs in an attempt to escape from collective bargaining and from the old model of labour relations. As an example, Volkswagen is building a new plant in Brazil in which only 20 per cent of the workers will be employed by Volkswagen: the others will have other employers. Multinational companies should be consistent across their different subsidiaries and not apply different national legislation at their convenience. Rather, they should apply ILO standards everywhere.
Social peace
Social peace should not to be taken for granted; it rather depends on economic trends. In a period of restructuring, trade unions are also required to be open to change. Collective agreements should be recentered to the enterprise level and allow enterprises to react more rapidly to changes in the demand of their products or services. Sector-level agreements can prove a handicap and result in dismissals and unemployment. Another argument in favour of establishing agreements at the enterprise level is that when the burden put on enterprises by agreements negotiated at sector level is too great, they tend to withdraw from their associations in order to avoid the obligations. Such development is obviously not desirable.
Networks of enterprises
The form of enterprises has changed: the traditional hierarchical form is being replaced by networks of enterprises. Large companies are more like conglomerates of small and medium enterprises than hierarchies. Central decision-making is now complementary to decentralized production, thanks to modern communication technology. There should be no opposition between central and decentral structures as both are needed equally.
There is a tendency of increasing inequality between a core labour force and the sub-contracted labour force or secondary labour force, tertiary labour force, etc. Among other conditions, there is a difference in the degree of job security between the core labour force and the others. There may be more need for legislation and standards with regard to the secondary groups of labour force than for the core labour force.
Looking at workers' representation in the enterprise, there may be a decline in collective forms. Distinguishing between collective bargaining and co-determination, however, shows that more and more decisions of individual scope are taken in participative forms. Collective bargaining and representative participation will not disappear, however; they will be instead mixed with individual arrangements. Attention should be given to finding the right mix.
Eastern Europe
Multinational enterprises in Eastern Europe are involved in the globalization of various sectors in Russia, Byelorussia, Ukraine, Kazakhstan and other countries. Workers are experiencing difficulties in the countries concerned because the state provides only minimum social protection. There is no real bargaining machinery because the subsidiaries of multinationals are limited in their decision power and there are no laws to bind top management to general standards.
The International Confederation of Free Trade Unions is aiming at a machinery to negotiate with multinational enterprises to improve employment conditions and to increase the motivation of workers, following the example of the European Federation of Trade Unions, which already has Work Councils in certain multinational enterprises. In this context the tripartite mechanism of standard setting of the ILO becomes very important. The ILO will need to find means to get involved in processes of labour relations where they reach beyond and across national borders.
The ILO declaration on social policy and multinational enterprises should be more effectively implemented. New standards are needed to ensure the participation of workers and more information from management. More social responsibility of the management of multinational enterprises is required, as these are currently enjoying privileges that the ILO does not grant to national states.
Other examples
In Australia, wage fixing is already commonly done at the level of the individual enterprise. This involves over 100,000 enterprises, whereas before there had been about a hundred negotiations only. In Sweden national bargaining is always followed by bargaining in the enterprises on certain issues in the framework of the parameters negotiated nationally. This procedure obviously applies to wages.
The majority of workers is not covered by national negotiation systems. In the United States, for example, workers are covered at the enterprise level, and in Japan as well, in combination however with strong workers' representation at the national level. There is a great variety of systems in the world.
In the United Kingdom, national level bargaining has ended; there is only plant level negotiation. New tendencies are pointing to a restoration of sectoral bargaining, however, as employers perceive that enterprise bargaining is a major task..
The importance of small enterprises cannot be over-emphasized As many as 99.8 per cent of Swiss enterprises employ less than 500 workers; this situation is much the same throughout the European Union, where there are many micro-enterprises with 1 to 9 employees. Actually, large enterprises are few: only 480 enterprises are represented on the stock exchange, out of a total of 190,000 enterprises in Switzerland. But the full burden of negotiation should not be left to the small and medium-sized enterprises. There should rather be central schemes which could be adapted by small enterprises according to their needs. A balance should be found between the levels.
On the other hand, a company such as General Motors is made up of no less than 700 independent units. Modern information technology allows for decentralization and for more central decision-taking at the same time. Workers' representation schemes could also use the information system of the enterprise.