The Future of Workplace Partnership

Dr Tony RoyleDepartment of Management and Research Centre for

Innovation and Structural Change, JE Cairnes Graduate School of Business and Public Policy, National University of

Ireland GalwayE-Mail: tony.royle@nuigalway.ie

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 take- up 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’