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The Future of Workplace Partnership Dr Tony Royle Department of Management and Research Centre for Innovation and Structural Change, JE Cairnes Graduate School of Business and Public Policy, National University of Ireland Galway E-Mail: [email protected] Irish social partnership • Between corporatism and voluntarism • Pros and Cons – Productivity, stability, jobs, real wages – Productivity falling, falling social spend, wage inequality, wage share of GDP falling, continuing reliance on third party resolution, failure of workplace partnership? • Productivity as ‘catch up’ – Long hours • NCPP: National workplace strategy • Low productivity may be less a reflection of physical or technical shortcomings than a failure to find a social model that brings out the best in average employees…behavioural economics suggests a direct link between fairness and productivity. People give their best when they feel justly treated relative to others. • Michael Prowse: Centre for Economic Performance (LSE) GDP per hour worked Source: OECD 1973 2005 USA 100 Norway 131 Switzerland 99 Belgium 109 Netherlands 92 Netherlands 104 Belgium 88 Ireland 104 Norway 86 France 101 Canada 85 USA 100 Sweden 83 Germany 91 Denmark 76 Denmark 90 France 75 Sweden 89 Austria 74 Austria 83 Germany 70 Finland 83 Italy 69 UK 83 UK 69 Switzerland 81 Finland 56 Canada 80 Ireland 49 Italy 79 Growth in GDP per capita (Source: OECD) 1995-2000 2000-2005 Ireland 8.5 Slovak Rep 4.5 Poland 5.2 Hungary 4.3 Finland 4.5 Greece 4.0 Hungary 4.2 Korea 3.8 Korea 3.5 Czech Rep 3.5 Slovak Rep. 3.4 Ireland 3.4 Sweden 3.2 Poland 3.0 USA 3.1 Finland 2.3 UK 2.9 UK 2.2 Greece 2.8 Sweden 2.1 Czech rep 1.4 USA 1.4 LRC conciliation services activity Year 2001 2002 2003 2004 2005 Referrals 1815 1693 1597 1484 1692 Meetings 2201 2150 1900 1930 2054 Annual average hours worked 2005 Norway 1360 Netherlands 1367 Germany 1437 Belgium 1534 France 1546 Denmark 1551 Sweden 1587 Ireland 1638 Austria 1656 UK 1672 USA 1713 Japan 1775 Poland 1994 Czech Rep 2002 Korea 2354 Political economy of workplace partnership • Continental statutory worker representation – – – – – Collective and indirect representation Strategic and operational issues Oversee substantive and procedural rights Mandatory: sanctions for non-compliance Integrative bargaining • Organization driven – – – – – Decentralised, individual, emphasis on direct Operational Day to day business problem solving Managerial prerogative dominates Performance driven The Irish ‘Hybrid’ • Blurring the lines between organization-led and statutory • System cannot be imposed • Employees as stakeholders • Partnership committees • Compatible with organization-led approaches • Potentially contains strategic and integrative approach • Resources provided by IBEC, ICTU, NCPP Challenges facing workplace partnership • Usually found where there’s a history of conflict – Many partnerships lack innovative elements • Focus on operational matters not strategy • Projects not often extended to whole workforce • Problem of ‘buy-in’ – Management fear loss of authority – Unions fear weakening collective bargaining • ‘Them and us’ culture still pervasive Failure of Irish Workplace Partnership? (2003 NCPP/ESRI survey on workplace partnership) • Unionised firms – – – – 17% have formal policies to avoid compulsory lay-offs 20% involved in profit sharing/gain-sharing 50% get paid training 30% of unionised companies have direct involvement • Non-unionised firms – Only 5% report 3 of the above practices • Conclusion – – – – ‘1st generation’ agreements dominate Notable failures (Aer Rianta and RTE) ‘High road’ optimism unfounded. Growing latitude for employers to ignore WP. EU Information and Consultation Directive • • • • • • • • • • A boost for Irish workplace partnership? Finally in force in 2006 50+ firms by 2008 Employees must ‘opt in’ (in writing) 10% threshold (min 15, max 100) Pre-existing agreements No automatic rights for unions No specified role for experts Disputes to be d/w by the Labour Court Role of US Chambers of Commerce Research objectives • What impact does the Act have on the takeup and processes of workplace partnership? • Does the Act help to introduce innovation and boost productivity? • Is the Act an effective mechanism for employee voice? • Does the Act help to reduce and resolve disputes? Research methods • • • • • • • Emphasis on qualitative case studies Firms with 50 or more employees Manufacturing Low paid service sectors Public sector Unionized and non-unionized Would complement ongoing and other research proposals on alternative dispute resolution The potential for future research • Learning from our competitors – International and comparative research • Fast-moving and dynamic area in the EU – Germany: works councils and productivity – Sweden: worker directors boosting competitiveness – Finland: strengthening cooperation Act – Belgium: more power for labour inspectors – Slovak Rep: strengthening labour law • Related themes on ‘flexicurity’