Tony Dobbins (Bangor University),ESRC regulation & the firm seminar,Newcastle Business School, June 5th

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Outline1. The EU Information & Consultation of

Employees Directive in two LMEs

2. Applying the Prisoners Dilemma concept

3. Methods

4. Some case findings

5. Conclusion/implications

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EU Information & Consultation of Employees (ICE) Directive 2002

• UK & Rep. Ireland only EU states without statutory ICE rights;

• EU ICE Directive regulates for employee I&C rights:business's economic situation; employment threats; decisions

likely to lead to changes in work organisation/contractual arrangements;

applies to workplaces with 50 or > employees;emphasizes employee representative rights.

Spirit of Directive: promote high trust mutual gains dialogue;

But Directive gave countries scope to introduce different local ICE Regulations to reflect national IR context:UK & RoI transposed ‘light touch’ regulations to preserve

voluntarism/employer choice: neo-liberal path dependency.3

Use of FoI to illustrate employer lobbying/collusion with government to dilute impact of Directive in LME

(ROI)…

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‘Prisoner’s Dilemma’ & ICE in liberal economies Argument: ICE Regulations ineffective in LMEs:

generate ‘mutual losses’ for employers + workers, or employer gains;

Why? ‘prisoner’s dilemma’ (Leibenstein, 1982):PD problem with employee voice in voluntarist capitalist contextsMutual distrust that other party will pursue individual self-

interest PD is zero-sum game (one parties’ gain = other parties’ loss)

Institutions matter for PD and regulating ICE:LMEs: voluntary market-driven = sub-optimal non-cooperative

PD;CMEs: ‘beneficial constraints’ ‘shock’ parties into cooperative

ICE/mutual gains

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Employer: Golden Rule

Employer: Individual Maximization

Worker:

Golden Rule

Box 1:Mutual gains cooperation.

Win (E) Win (W)

Box 2:Non-cooperation - gains for employer, workers lose.Win (E) Lose (W)

Worker:

Individual

Maximization

Box 3:Non-cooperation - gains for workers, employers lose.Win (W) Lose (E)

Box 4:Non-cooperation -Mutual losses for all (prisoner’s dilemma). Lose (E) Lose (W)

Prisoner’s Dilemma & ICE outcomesSource: adapted from Leibenstein (1982:93).

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Company Sector Organization Context

I&C Structures History of Unionisation

Brit Co Services UK parent acquired company in Republic and merged with NI to form one all-island entity in 2003. Employs 3000.

NER I&C Forum set up in Republic in 2005 in response to ICE Regulations. Union I&C Forum in NI.

Non-union in Republic; union recognition campaign resisted by management. Unionized in NI.

Manufacture Co

Manufacture Family-owned firm in Northern Ireland. Employs 300.

Employee Forum set up in 2005 in response to ICE Regs and Investors in People advice.

Non-union company; union recognition campaign unsuccessful.

Retail Co Retail British-owned retail multinational; 19 outlets across NI & Republic. Employs 1500.

Multi-level voice. NER forum reconfigured in response to ICE Regs to provide formal, elected representation

Non-union in ROI and NI. Union avoidance.

Book Co Retail Irish-owned retailer.Employs 1800 on island of Ireland.

Traditional union information and consultation.

Highly unionized.

METHODS: 4 x cross-border case studies in RoI/NI: N interview respondents = 87

Empirical findings – overall summary ICE Regs did not promote robust mutual gains in our 4

cases;

Rare short-lived examples of mutual gain (operational issues), but not enduring consultation over ‘strategic’ issues;

ICE Regs encourage weak (shallow) I&C for workers/representatives:

Mainly information-sharing, robust active consultation rare I&C lacked institutional independence from management Representatives had insufficient expertise to invoke I&C rights Union I&C more robust than non-union I&C Outcome = workers often dissatisfied with voice, withdraw, silence.

‘Mutual losses’ or employer gains more common than mutual gains because voice non-cooperative/PD (Box’s 4 + 2 of Table)

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Empirical examples from casesBritCo: Established NER Forum (Vocal) in response to ICE

Regs. But: Mgt admit Forum = “tick box exercise”; Short spell of limited mutual gains (redundancy pay); Mostly Mgt response to union organising drive than ICE Regs

themselves;

Manufacture Co: Mgt described NER as “a communications forum” for resolving grievances, rather than consultation

Book Co: Mgt & union wanted nothing to do with ICE Regs. No consultation when introducing new technology caused chaos

RetailCo: Multi-level I&C Forums (‘Bottom-Up’) to comply with ICE Regs. But: Management controlled information forums to purposely ‘avoid’

unionisation; Employees bypassed voice forums to raise grievances with line

mgrs/external institutions (HSA) 10

Conclusions Institutional design matters: mutual losses is not an accident;

ICE Regulations badly designed in liberal (voluntarist) economies = sub-optimal non-cooperative voice outcomes = PD;

‘Efficiency, equity, voice’ (Budd, 2004): efficiency dominates agenda;

ICE Regulations DO NOT REDISTRIBUTE POWER to embed enduring consultative mutual gains as intended by Directive;

Why? More than just minimalist Regs. The state and employers active agents colluding/controlling distributive power resources for I&C;

(Partial) solution? ICE Directive/Regulations require reform to compel more equal power-sharing in LMEs (‘beneficial constraints’);

Shift in political & managerial view needed: pluralist voice is good IR

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