COMPARATIVE INDUSTRIAL RELATIONS

Group - 7
Anuj | Devendra | Navin | Prasad | Pratap |Rahul |Soumik
Agenda
Comparative Industrial Relations

- > Labour Management Relations

- >Future of trade unionism in the changing world

- > Industrial Relations in Japan

Overview of IR in India

- > Role of State - IR

- > Current Status & future Prospects of State-IR

- > Role of Trade Unions

- > Current status & changing role of Trade Unions

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World in Transition
Changing geo political map

Convergence to mixed economies

Democratization

Ownership changes

Structural Adjustment Pressure

New human resources policies

Diverse trend in Labour management

National systems of IR

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Emerging Trends

Myriad paradox and tensions

Influence of contextual factors &

History

Changing roles of the principal actors

◦Government
◦Employers
◦Trade unions

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Emerging Trends Contd…
 New actors on the horizon :
To address the neglected issues
◦ Social group
◦ Public group

 Tripartism : Employer , worker

and government
◦ Resulted in social and economic
development

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Emerging Trends Contd…

 Cooperative collective bargaining

◦ Various level like plant/firm, industry,
region national Public group
◦ Shifting focus from centralized to
decentralized

 Increasing diversity and rise of

new generation of workforce :
◦ Globalization
◦ Skill based work force

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Key Issues In IR – Macro Level
 Labour law/labour market reform
◦ Labour reform impacted job security, minimum
wages, working condition
◦ ILO focus on providing minimum wages

 Unemployment and poverty

◦ Job creation seen as responsibility of employers
in several countries
◦ Unemployment more of political problem rather
than socio-economic problem for some countries
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Key Issues In IR – Macro Level Contd…

 Quest for an egalitarian society

◦ Social justice integral part of
development planning

 Development objects, basic

human rights and
international labour standards
◦ To achieve free and fair business
practices

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Key Issues In IR – Micro Level
Work Organisation
 Shift from Taylorism to Tayotoism i.e., shift from
Manual-Mechanical to Micro-chips

 Flexibility – functional, location, pay etc. is

emphasised

 Promoted emergence of lean, mean, green, clean

workplace

 Organisation giving rise non-traditional, atypical

types of employment relationship

 Need to address notice period, information sharing,

consultation and compensation in worker’s favour.

 Doing away of prior Administrative approvals

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Key Issues In IR – Micro Level Contd…

Skills Formation
Varied depending on the labour market context

Labour surplus regions focussed on low skill/wage

industrialisation

Regions experiencing labour shortages focussed on high

skill/high wage industrialisation

Paradigm shift in the world of work from brawn to brain and

muscle to mind

shift in the management philosophy from “direction and

control” to “consent and consensus”

Cost cutting and downsizing approaches required shift from

mono-skills to multi tasks
 

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Key Issues In IR – Micro Level Contd…

Compensation
 Flexible and contingent pay

 Proliferation of knowledge
workers

 Sharing plans either or both in

stock and profits  
[Collective Bargaining]

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Key Issues In IR – Micro Level Contd…

Workplace Governance
 Important issues :Information
sharing, to-way communications,
representative and direct
participation

 Consultation and consensual

decision were not prevalent

 consultation was invited at the

stage of implementation.
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The Future of Trade unionism : A comparative study

 Labour movements followed different patterns in different countries

based on their industrial and political system

 Important role in shaping the social and industrial aspects of working

societies

 Liberalisation of economies brought a sea change in their functioning

and effectiveness

 Liberalisation also provided the opportunity to play a more proactive

role in polity and the society

 Traditionally, involved in wage negotiation, determination of working

condition and representing the interest of the workers

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Trade Unions in North America(Including Canada)

 Operates as an interest group rather than a social movement

 Employment population ratio adversely affected

 Local unions responded in distinct ways to identical workplace situation

 The biggest challenge is the declining membership

 Notion of unions as “Organizing organizations”

 Canadian unions initiated innovations such as recognizing the needs of women, establishing
investment funds and advocating training

 The concerns of workers include health and safety concerns, increase in lay-offs, and decrease in
job security

 Employers worried about wage concessions and work rule concession, leading to increased
conflicts

 Union members in these countries building organization strength of the union through coalition
with other unions and social groups

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Trade Unions in Europe
 In France, Germany, and other European countries, socialist
parties and democrats played a prominent role in forming and
building up trade unions, especially from the 1870s onwards.

 But in Britain moderate Unions dominated the union

movement from the mid-19th century and trade unionism
was stronger than the political labour movement until the
formation and growth of the Labour Party in the early years of
the 20th century.

 Played both economic and social roles besides being vehicles

of class struggle(using collective bargaining etc.

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Trade Unions in South Africa
 Modern and independent and known as COSATU

 Union members are more participative in union

activities and ensure high level of absenteeism etc.
when required

 COSATU has ensured the delivery of basic social

services to disadvantaged communities

 Highly active at grass root levels

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Trade Unions in Asia

 Barring the Soviet and China , Trade Unionism in Asia had

similar patterns.

 The effect of economic reforms on business environments has

resulted in similar changes in Trade Union activities.

 In China trade unions have been ineffective in ensuring higher

wages, lower dismissal rates

 In India , unions are losing influence and are largely confined to

organized sector only.
 vdo

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Japan

 Economic super power

 Late 1950-60 Japan started growing

 Overcame two oil crises in 1970s

 Achieved the relative industrial peace and harmony

 Was center of attraction for economic growth

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Strength

 Managerial and organizational capabilities

 Coherent industrial relations

 Harmonious and co-operative relationships at the workplace

 Trade Unions

 Joint labor management consultation mechanism

 Unique employment policies

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Japan : Socio - Cultural Effect

 Socially and culturally different from most of the

industrialized nations

 Japanese social system was seen as the origin of the

practices at the workplace

 Uniqueness was also attributed due to this socio-

cultural reasons

 But it doesn’t explain all

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Failure of Socio-cultural thought

Doesn’t take into account the factors such as:

1. Strong collective orientation

2. Group attitude
3. Familiar atmosphere at workplace
4. Loyalty
5. Commitment
6. Why these practices are prevalent in large organizations
only?

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What It Ignores

Economic factors in:

1. Trade unionism
2. Employment practices

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Emerging Thought

 Japan’s success in industrial sector is an evolutionary

process

 Particularly in the post world war period

 Nature and pattern of labor relation depended on:

◦ Market conditions
◦ Nature of technology

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What They Say …

 Dore (1973):
◦ High morale and group attitude
◦ Late entry helps to follow in a better way

Fails to explain other late entrants of Asia.

 Koike (1988):
◦ Technical skills of “blue-collar employees”
◦ Similar age wage policy for both white and blue collar employees was a successful
strategy

 Yoshihara (1994):
◦ Co-operative attitude of employees in large organizations
◦ Education
◦ Diligence, discipline and moral values

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Dual Structure

 IR systems and practices are not suitable for all

organizations or employees

 Japan has Dual Structure in its economy

 Most IR policies are for regular employees of large

organizations

 Employees of smaller organizations and part-time or

contractual workers are kept out of it

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Friction and Future

 Labor cost is high in Japan

 In other Asian countries cost is less

 Japan is going global to stay alive

 Consequently IR policies are changing to

shape the global future

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Enterprise Based Unionism

 Trade Unions are established within

an individual enterprise

 Collective Bargaining with a single

employer

 Sector level collective bargaining is

very rare in contrast with European
societies

 Membership normally limited to

regular workers

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Decentralized Collective Bargaining and Shunto

 Decentralization – most collective

bargaining takes place at company level

 Quick adaptation to changing socio-

economic circumstances swiftly and
flexibly

 Drawback – Lack of universal impact

across sector or nation

 Unique wage determination system

called “Shunto” (spring wage offensive)
in 1955

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Recent Trends and Prospects in IR - Japan

 Period of slow growth

and appreciation of Yen

 Breakdown of long
standing practices–
career long
employment system

 Shunto system

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Information and Consultation Via Enterprise – Based Unions

 No general legislation concerning employer’s obligation

to inform and consult employees’ representatives in Japan

 Establishment of joint consultation committees by

Japanese companies and enterprise-based unions

 Different to distinguish from collective bargaining

 Medium and Small sized enterprise workers are virtually

excluded from information and consultation procedure

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 Majority Representative and labour Management Committee

 Legal system concerning collective industrial

relations which was established by Labor
Standards Law (enacted in 1947)

 Law stipulates that an employer shall ask the

opinion of majority union or “a person
representing the majority of workers where no
such trade union exists” when he draws up or
changes work rules

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Towards
Towards a
a New
New Employees’
Employees’ Representation
Representation System
System

 Japan Trade Union Confederation (RENGO) already prepared

its own proposal on employees’ representation system

 Criticism that current majority representative lacks

independence from employer and democratic legitimacy

 Advocates the establishment of “employees’ representative

committee,” which consists of only employees’
representatives who are formally elected by all employees

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 Regulatory Reform and Industrial Relations

 Successive deregulation or “regulatory reform” from

1990s

 Backlash in 2007 – fear of “polarized society”

 Criticism of almost all regulations by “Labour

Taskforce of Council for Regulatory Reform”

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 Looking Ahead…

 Necessity of constant and substantial economic growth to maintain

both career long employment and seniority based pay scale

 Compromises by management and trade unions when nation’s

economy and business will not expand dramatically in years to come

 Review of traditional salary system and fixing a standard level of

performance; introduction of annual contract system

 Reduction in overtime and working hours, no of temporary and part-

time workers, early retirement policies with benefits

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