Current Issues in Labour Relations: An International Perspective [Reprint 2019 ed.] 9783110849233, 9783110116533

Table of contents :
Table of Contents
Contributors
Introductory
Chapter I. Technological Change and Labour Relations
Introduction
Unions and New Technology
Employers' Response to Technological Change
Technological Change in the United States: Unions and Employers in a New Era
New Technologies and Collective Agreements in the Federal Republic of Germany — The Case of "Rationalisation Protection Agreements"
New Technology in the Context of Structural Change, with Special Reference to Japan
Chapter II. Institutional Forms of Workers' Participation, with Special Reference to the Federal Republic of Germany
Introduction
The Functioning of Institutionalised Forms of Workers' Participation — Seen from a Social Science Perspective
Workers' Participation in the Federal Republic of Germany in an International Perspective
An American Perspective of the German Model of Worker Participation
Co-Determination in the Federal Republic of Germany: An External Perspective from the United Kingdom
Chapter III. New Trends in Working Time Arrangements
Introduction
Working Time Reductions and the European Work-Sharing Debate
Worksharing and Labor Market Flexibility: A Comparative Institutional Analysis
Reducing Annual Working Time and Improving Schedule Flexibility — Causes, Effects, Controversies
Working Time Reductions and Employment: The Discrepancy between Macroeconomic and Macroeconomic Research Findings
New Working Time Arrangements in the Netherlands
Changes in Work Time in the United States
Chapter IV. Co-Operation and Conflict in Public Service Labour Relations
Introduction
Unions and Employers in Government in the United States: More Conflict than Co-Operation
Co-Operation and Conflict in Public Sector Labour Relations: The Federal Republic of Germany
From Compromise to Resistance: Public Sector Industrial Relations in Canada
Labour Relations in the Nigerian Civil Service
Co-Operation and Conflict in Public Sector Labour Relations in Australia
Co-Operation and Conflict in Public Sector Labour Relations in Israel
Co-Operation and Conflict in Public Sector Labour Relations in Japan
Index of Names
Index of Subjects

Citation preview

Current Issues in Labour Relations: An International Perspective Editors: Gladstone, Lansbury, Stieber, Treu, Weiss

Current Issues in Labour Relations: An International Perspective Edited by Alan Gladstone, with Russell Lansbury, Jack Stieber, Tiziano Treu and Manfred Weiss A Publication of the International Industrial Relations Association

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G Walter de Gruyter • Berlin • New York 1989

Alan Gladstone is Director of the Industrial Relations and Labour Administration Department of the International Labour Organization (I.L.O.) in Geneva, Switzerland, and Secretary of the International Industrial Relations Association. Russell Lansbury is Head of the Industrial Relations Department at the University of Sydney, Australia. Jack Stieber is Professor of Labor Relations and, formerly, Director of the School of Labor and Industrial Relations at Michigan State University, East Lansing, U.S.A. Tiziano Treu is Professor of Labour Law at Pavia University, Italy. Manfred Weiss is Professor at the Institute for Labour Law at the J. W. Goethe Universität in Frankfurt/Main, Federal Republic of Germany.

Library of Congress Cataloging in Publication Data Current issues in labour relations : an international perspective / edited by Alan Gladstone ... [et al.]. "A publication of the International Industrial Relations Association." Bibliography: p. ISBN 0-89925-471-3 (U.S.) : 1. Industrial relations. 2. Technological innovations — Employee participation. 3. Industrial management — Employee participation. 4. Hours of labor, Flexible. I. Gladstone, Alan. II. International Industrial Relations Association. HD6971.C89 1989 3 3 1 - d e 19

Deutsche Bibliothek Cataloging in Publication Data Current issues in labour relations: an international perspective : a publication of the International Industrial Relations Association / ed. by Alan Gladstone ... - Berlin ; New York : de Gruyter, 1989 ISBN 3-11-011653-7 NE: Gladstone, Alan [Hrsg.]; International Industrial Relations Association © Printed on acid free paper © Copyright 1989 by Walter de Gruyter & Co., Berlin 30. — All rights reserved, including those of translation into foreign languages. No part of this book may be reproduced in any form — by photoprint, microfilm or any other means — nor transmitted nor translated into a machine language without written permission from the publisher. — Printed in Germany. Typesetting and Printing: Arthur Collignon GmbH, Berlin — Binding: Dieter Mikolai, Berlin. — Cover Design: K. Lothar Hildebrand, Berlin.

Table of Contents

Contributors

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Introductory Alan Gladstone Technological Change — Workers' Participation — Working Time — Public Service

Chapter I Technological Change and Labour Relations Introduction 11 Russell D. Lansbury Trade Unions and Technological Change — Employers and Technological Change — The Role of Government and Technological Change — The Challenge of Technological Change to Traditional Systems of Industrial Relations: Towards Greater Flexibility? Unions and New Technology 17 Greg Bamber Luddites and Unions — Union Policies — Union Responses — Challenges for Unions — Conclusion Employers' Response to Technological Change 29 Jacques Rojot Introduction — The New Wave of Technological Change — The Employers' Response at the Micro Level — The Employers' Response at the Macro Level — Flexibility Technological Change in the United States: Unions and Employers in a New Era 43 Everett M. Kassalow Introduction — Technological Change, a Possible Threat to Unionism — Factors Influencing Union Attitudes Toward Technological Change — The New Technology and Work Organization: The Industrial Relations Context — Union Management Committees for Cooperation on Technology — Advance Notice on Technological Change and Plant Closings — Greater Voice for Unions in Investment Decision — Technological Change and Union Management Approaches to Training — Technological Change, New Income and Job Protection Plants — New Technology and Employee Health and Personal Security Problems in Collective Bargaining New Technologies and Collective Agreements in the Federal Republic of Germany — The Case of "Rationalisation Protection Agreements" Werner K. Blenk Introduction — New Technologies and Collective Agreements — The Content of Rationalisation Protection Agreements — Conclusions

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N e w Technology in the Context of Structural Change, with Special Reference to J a p a n Yasuo Kuwahara Environment Surrounding Today's Technological Change — New Technology and Structural Change — Major Issues Relating to Structural Change

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Chapter II Institutional Forms of Workers' Participation, with Special Reference to the Federal Republic of Germany Introduction Manfred Weiss Workers' Paticipation as a Subsystem within a Complex Society — International Trends — Comparative Analysis — Perspectives The Functioning of Institutionalised F o r m s of Workers' Participation — Seen f r o m a Social Science Perspective Günter Endruweit and Gerhard Berger The Social Role of the German Form of Participation — Labour Market Conditions for Participation — The Role of the Parties in Participation — Effects of the Social Role on the Parties in Participation

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Workers' Participation in the Federal Republic of G e r m a n y in a n International Perspective 105 Johannes Schregle What to Compare? — The System of the Federal Republic in Law and Practice — Works Councils — Is the Federal Republic's Model Comparable with the Japanese System? — Co-Determination: The Enterprise and the Economy — Workers' Representation on Company Boards — Works Councils and Trade Unions — Conclusion A n American Perspective of the G e r m a n Model of Worker Participation . . . 115 Clyde Summers Characteristics of the American System of Participation — Functional Equivalents and Analogues — Cross Perspectives of Strengths and Weaknesses — Conclusion Co-Determination in the Federal Republic of Germany: A n External Perspective f r o m the United K i n g d o m 129 Alan C. Neal Introduction — Some Specific Issues — Conclusions

Chapter III New Trends in Working Time Arrangements Introduction 149 Tiziano Treu Trends — Factors and Attitudes of the Actors — Working Time and Industrial Relations Structure — Effects and Interpretations — Prospects and Concluding Remarks

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VII

Working Time Reductions and the European Work-Sharing Debate 161 Paul Blyton Background to the Current Debate — A Summary of Recent Working Time Changes in Western Europe — Challenges to Work-Sharing and Some Possible Responses — Conclusion Worksharing and Labor Market Flexibility: A Comparative Institutional Analysis 175 Duncan Colin Campbell Worksharing and Flexibility — Systemic Implications of Worksharing — Three Case Studies of Worksharing — Worksharing, Internal and External Labor Market Flexibility — The Pattern of Worksharing in the United Kingdom — The Pattern of Worksharing in West Germany — The Pattern of Worksharing in France — Conclusion Reducing Annual Working Time and Improving Schedule Flexibility — Causes, Effects, Controversies 193 Gerhard Bosch What Is Work-Time Improvement All About? — Rigid Work-Time — Fact or Fiction? — Causes of Greater Flexibility in Working Time — Conflicting Interests — The Employment Effects of Greater Flexibility of Working Time and of Collective WorkTime Reduction — The Implementation of the 38.5 Hour Week in the FRG — Conclusions Working Time Reductions and Employment: The Discrepancy between Microeconomic and Macroeconomic Research Findings 219 Robert A. Hart Introduction — Recent Microeconomic Theory — Two Empirical Micro Studies — Should we Believe the Results of Macroeconomic Studies? — Comparative Assessment New Working Time Arrangements in the Netherlands 229 Jelle Visser Post-War Trends in Working Hours — Economic Conditions and Labour Market Crisis - The Avenue to the 1982 Central Agreement on SWH - The 1982-1985 Bargaining Rounds — Will Work-Sharing Continue? — The Impact on Industrial Relations Changes in Work Time in the United States 251 Stanley D. Nollen Objectives and Methods — Changes in Weekly Work Time — Changes in Annual Work Time — Summary

Chapter IV Co-Operation and Conflict in Public Service Labour Relations Introduction 267 Jack Stieber Definition of Public Service — Distribution and Composition of Employment — Unionization — Employer Representation — Regulation of Collective Bargaining — Strikes and Other Industrial Action — Cooperation — Outlook for the Future

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Unions and Employers in Government in the United States: More Conflict than Co-Operation 277 Peter Feuille Unionisation and Bargaining — Impasse Resolution — Labour-Management Cooperation — Discussion, Conclusions and Predictions Co-Operation and Conflict in Public Sector Labour Relations: The Federal Republic of Germany 295 Berndt K. Keller Definition of Public Sector — Unions within the Public Sector — Employer Representation in the Public Sector — Collective Bargaining in the Public Sector — Strikes in the Public Sector — Co-Operation in the Public Sector From Compromise to Resistance: Public Sector Industrial Relations in Canada 307 Mark Thompson Definitions — Unionism — Employer Representation — Legislation — The Results of Collective Bargaining — Labour-Management Co-Operation — Future Prospects Labour Relations in the Nigerian Civil Service 319 Ukandi G. Damachi and Tayo Fashoyin Introduction — Unions in the Civil Service — The Structure of Labour-Management Relations — Collective Bargaining in the Civil Service — Disputes and their Settlement — The Future of Labour Relations in the Civil Service Co-Operation and Conflict in Public Sector Labour Relations in Australia . . 335 Joe Isaac Introduction — Definition of the Public Sector — Unions in the Public Sector — Employer Representation — Collective Bargaining — Strikes in the Public Sector — Co-Operation in the Public Sector — Role of Women — The Future Co-Operation and Conflict in Public Sector Labour Relations in Israel 349 Ruth Ben Israel The Framework — Definition of Public Sector — Unions in the Public Sector — Employer Representation in the Public Sector — Collective Bargaining in the Public Sector — Strikes in the Public Sector — Co-Operation in the Public Sector — Outlook for the Future Co-Operation and Conflict in Public Sector Labour Relations in Japan . . . . 361 Tadashi Hanami Definition and Terminology — Legal Framework — Trade Unions in the Public Sector — Collective Bargaining in the Public Sector — Bargaining and Consultation at ShopFloor Level — Administrative Reform and Industrial Relations in the Public Sector — The Future Perspective Index of Names

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Index of Subjects

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Contributors

Introductory Alan Gladstone is Director of the Industrial Relations and Labour Administration Department of the International Labour Organisation (I.L.O.) in Geneva, Switzerland. He is also Secretary of the International Industrial Relations Association. Chapter I Russell Lansbury is Head of the Industrial Relations Department at the University of Sydney, Australia. Greg Bamber is a Professor at the Graduate School of Management, University of Queensland, Brisbane, Australia. Jacques Rojot is a Professor at the European Institute of Business Administration (INSEAD) in Fontainebleau, France. Everett Kassalow is a Professor at the School of Urban and Public Affairs at Carnegie-Mellon University in Pittsburgh, Pennsylvania, USA. Werner Blenk is an official of the I.L.O., Geneva, Switzerland. Yasuo Kuwahara is a Professor at Dokkyo University, Japan, and Senior Research Associate at the Japan Institute of Labour, Tokyo. Chapter II Manfred Weiss is a Professor at the Institute for Labour Law at the J. W. Goethe University in Frankfurt am Main, Federal Republic of Germany. Günter Endruweit is a Professor at the Institute for Social Research at the University of Stuttgart, Federal Republic of Germany. Gerhard Berger is also doing teaching and researching at the Institute for Social Ressearch. Johannes Schregle is the former Chief of the Industrial Relations and Labour Administration Department at the I.L.O. He is also Secretary-General of the International Society for Labour Law and Social Security. Clyde Summers is a Professor at the University of Pennsylvania Law School, Philadelphia, USA. Alan Neal is a Senior Lecturer in the Faculty of Law at the University of Leicester, United Kingdom. Chapter III Tiziano Treu is a Professor of Labour Law at Pavia University, Italy. Paul Blyton is a Lecturer in the Department of Business Administration and Accountancy at the University of Wales Institute of Science and Technology, Cardiff, United Kingdom. Duncan Colin Campbell is a Lecturer in the Department of Management at the Wharton School of the University of Pennsylvania, Philadelphia, USA.

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Contributors

Gerhard Bosch is a member of the Institute of Social and Economic Sciences of the German Confederation of Trade Unions. Robert Hart is a Professor of Economics at the University of Stirling, Scotland, United Kingdom. Jelle Visser is a Professor at the Sociological Institute of the University of Amsterdam, Netherlands. Stanley Nollen is an Associate Professor at the School of Business Administration, Georgetown University, Washington, D.C., USA. Chapter IV Jack Stieber is a Professor of Labour Relations and, formerly, Director of the School of Labor and Industrial Relations at Michigan State University, East Lansing, USA. Peter Feuille is a Professor at the Institute of Labor and Industrial Relations of the University of Illinois at Urbana-Champaign, USA. Berndt Keller is a Professor at the University of Konstanz, Federal Republic of Germany. Mark Thompson is a Professor in the Faculty of Commerce and Business Administration at the University of British Columbia. Ukandi Damachi and Tayo Fashoyin are both Professors in the Department of Industrial Relations, Faculty of Business Administration, at the University of Lagos, Nigeria. Joseph Isaac is Deputy President of the Australian Conciliation and Arbitration Commission. Ruth Ben-Israel is a Professor in the Faculty of Law at Tel Aviv University, Israel. Tadashi Hanami is a Professor of Law at Sophia University in Tokyo, Japan.

Introductory Alan Glads tone1

Industrial relations, in the second half of the eighth decade of the twentieth century, are in a period of transition and, some would say, turmoil. Trade unions have had to assume a defensive posture. Employers associations are seeing the erosion of a part of their raison d'être. The institution of collective bargaining is undergoing a radical change in structure and substance. Indeed, within and outside the ambit of collective bargaining, new substantive issues in industrial relations have emerged and some traditional issues, such as working time, have taken on new dimensions. Some foresee the demise of strikes and other forms of industrial action and, parallel thereto, the emergence of new types of dispute settlement mechanisms. The progress of institutionalised and representative forms of workers participation in decisionmaking at the enterprise level may be giving way to more individualised forms of worker involvement in decisions. Workplace relations and managerial styles are being rethought and refashioned. The public service has emerged as a key area of industrial relations; this both in terms of the impact of public service labour relations on the general weal and its growing influence on industrial relations in the private sector. A whole complex of interconnected socio-economic and political factors are relevant to these developments. A sustained period of economic difficulty — recession, to some — and, relatedly, a certain transfer of production from industrialised market economies to Third World countries has meant record post-war levels of unemployment, with its inevitable effect on trade union membership, influence and militancy. The struggle in the industrialised market economies to regain a competitive stance and spur economic recovery has involved cutting production costs, and particularly labour costs, with consequent pressures on trade unions and collective bargaining. Technological change, both as an element for increasing competitivity and as a natural and on-going phenomenon (enhanced immeasurably by developments in micro-electronics and computer science), has impacted on employment levels, at least in the short and, probably, medium term, in terms of job displacement. It is also having a major impact on the nature and content of jobs, forcing trade unions to cope with new challenges to their organising and bargaining expertise. The massive entry of women into the workforce and the concomitant tertiarisation of economies have had a similar impact on trade unions in view of the difficulties of organising service workers, and women in particular, and in view of the pressures it imposes on the formulation and relative priorities of bargaining issues. The dramatic increase in atypical or non-conventional types of employment (part-time, temporary and fixed-term, home-based, independent contracting, etc.) brought about by a number of factors, including a desire for greater labour market

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flexibility (primarily on the part of employers but also of governments) to meet competitivity problems, as well as questions of individual choice and preference, is another phenomenon that has translated itself into union organisational and influence difficulties. Many of the factors discussed above are contributing to changes in collective bargaining structures; more precisely to decentralising the bargaining process, particularly in those industrial relations systems where, traditionally, bargaining was concentrated at industry and national levels. Certain of the newer industrial relations issues, such as those relating to labour flexibility and technological change, are thought to be more amenable to discussion and negotiation at enterprise, plant and shop levels rather than at industry or national levels. I have touched summarily on a number of elements of structural change which are having an influence on the evolution of contemporary labour relations. These issues are discussed and developed in the essays contained in this volume, most of which are based on papers presented to the Seventh World Congress of the International Industrial Relations Association which met in Hamburg in September 1986. The rapporteurs for the various items have prepared the introductions for the chapters in this volume, drawing on their own reports, the papers presented to, and the discussions in the Congress.

Technological Change The chapter on technological developments reflects the fact that the pace of such change has increased exponentially in recent years and is causing serious and multifaceted changes in industrial relations. One of these is greater trade unionmanagement co-operation, sometimes in an effort to maintain job security, or at least to palliate the job displacement effect of technological change. The furtherreaching question is the extent to which trade unions, through collective bargaining, can influence not only the consequences of the introduction of new technology but also the extent to which unions can influence, if not the introduction itself of technological change, at least the pace and manner of its introduction. Whatever the union attitude or response to technological change, it will be to some extent influenced by the general employment situation. Yet, as alluded to above, when unemployment is high, union bargaining power tends to lessen; and this just at the point where workers will be more concerned about job loss and more insistent that their union be more aggressive in influencing the course of technological change. Lansbury, in his introduction to Chapter 1, also touches on employer motivation in introducing new technology, which goes beyond reducing unit costs but rather is seen to offer benefits for all concerned. At the same time relatively few employers are happy about consultation or negotiation with trade unions on decisions concerning whether or not to introduce new technology — although interaction between the parties on the implications and consequences of such introduction is fairly common (and sometimes mandated by law). Governments can also play a role in this domain (apart from their direct role in the development of new technology through sponsoring, and investing in, research

Introductory

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for military and scientific purposes). The chapter points out that governments have fostered new technology accords between the parties, and more generally have encouraged or promoted collective bargaining on technology issues. But there has also been the beginning of a trend to enacting legislation to protect workers from certain employment or physical consequences of new technology, which trend, to some observers, can also have the effect of weakening the collective bargaining process through removing this area of union interest from the bargaining process. Bargaining will of course not disappear but, along with a possible increase in the role of collective bargaining concomitant with and related to the advance of new technology, there is also the question of the adequacy of traditional bargaining to meet the needs of negotiations on technology (use, introduction, implications and consequences for employees). This challenge concerns both the structure (level) of bargaining and the capacity of the parties to deal with the complexities and ramifications of the subject matter, including the issue of "flexibility" (wage and remuneration schemes, qualitative and quantitative workforce adjustments, manning requirements, works rules and expanded job classifications, etc.).

Workers' Participation Greater involvement of workers in decision-making in the enterprise — both through representative institutions and on an individual basis — is also cited in the chapter on technological change as a means of dealing with new problems arising out of the introduction of such change. Employers, not infrequently, will put forward participative schemes as an alternative to collective bargaining on technology issues. But workers' participation transcends the technology issue and is seen by many — particularly in its institutional forms — to have renewed significance in meeting the many challenges arising in an era of overall structural change. Thus the chapter on workers' participation edited by Manfred Weiss poses the question not of the general acceptance of workers' participation, but rather of which forms of such participation are likely to be most meaningful in today's industrial relations context. Weiss points to the great diversity in workers' participation systems, not only as regards form and substance, but also with reference to their differing goals and objectives, the manner in which they are introduced and the attendant legal instruments by which they are given effect. In spite of this diversity, one constant seems to be the role of trade unions in the machinery of workers' participation. One aspect of this issue is the so-called dual loyalty problem of union representatives on participatory bodies and who may be expected to represent the somewhat narrower interests of their constituents and at the same time the wider interests of the enterprise, including the latter's survival and prosperity. Another point made by Weiss, using the German system as a specific example, is that the study of institutional workers' participation must refer to the entire participative system at its various levels and in its various forms, — e. g. works councils, workers' membership of enterprise boards, etc. — if one is to understand the impact and significance of the phenomenon. Moreover, citing contributions to

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the chapter, Weiss suggests that emphasis, for comparative purposes, has to be put on function, including the possibility that decision-making of the same or similar nature (both as to subject matter of the decision — such as those that may have been traditionally thought of as managerial prerogatives — and as to degree of influence on that decision) may be exercised by what are nominally quite different types of bodies. The chapter mainly concentrates on three "dimensions" of participation. The first is a suggested analytical framework for comparative research. The elements of the framework would cover the extent of employee coverage of the system; the types of decisions that are affected by the system, and the degree to which these decisions are affected; whether the system is a single or multi-channel one; the degree of individual worker involvement in, and the representative character of, the system; the formality of the system; and the climate of participation, i.e. adversarial or consensual. The second dimension evoked by Weiss relates to the actual influence of workers or their representatives on specific management decisions, a conclusion being that that influence is normally greater on personnel and social matters than on economic matters. Weiss's third dimension relates to trends in workers' participation. In particular he raises the question of the extent to which developments in workers' participation are dependent upon the economic situation of the moment, and upon the costs (direct financial burden, delays in decisionmaking, etc.) and benefits driving from workers' participation.

Working Time Treu, in his introduction to the chapter on new trends in working time, signals two relevant and related issues. On the one hand reduction in working time is a permanent and long-standing phenomenon which has, of course, taken on increased significance more recently in terms of both quality of working life and palliating the unemployment problem. On the other hand, there is the issue of organisation of working time, i.e. flexibilisation and variety of working time arrangements without regard necessarily to duration. Moreover the "double issue" coalesces in many ways. For instance, job-sharing and various other forms of part-time work, phased retirements, sabbatical leaves, etc., are relevant to both working time duration (reduction) and flexible working time arrangements. In the chapter the point is made that the pattern of a standard working week or year, and even a standard period of years of working life followed by retirement, can no longer by taken for granted. The chapter also discusses how government policies, including unemployment insurance eligibility, can encourage or discourage various initiatives in this area. Treu cites other variables impacting on the issue of working time. Among these are enterprise size and the degree to which a dual labour market exists. The presence of a dual labour market (in which there is a core of more or less permanent fulltime workers and a periphery of part-time, casual, temporary and other "atypical" workers) is both a result as well as a cause of a given pattern of working time arrangements or of a reduction in working time. Treu further notes that the three

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major factors influencing change in working arrangements and a reduction in working time are: unemployment and the felt need to redistribute (share) available work; changes in the make-up and expectations of the labour force leading to more emphasis on free time and family life; and the increasing emphasis on flexibility in production, which emphasis has been enhanced by the exigencies of technological innovation. Trade unions have more or less consistently, but certainly not universally, seen reduction of working time as an instrument to meeting the unemployment problem. A sticking point is of course whether working time reductions are to involve a reduction in wages so as to be cost-neutral for employers, a position insisted upon by employers (and certain governments) and accepted or rejected by various trade union movements. As Treu points out, in many cases employers have successfully bargained — or otherwise obtained — greater overall flexibility, and particularly greater flexibility in arrangement of working time, in return for reduction in working hours without loss, or significant loss, in wages; the economies arising out of the greater flexibility making for relative cost neutrality. The links between working time and industrial relations are explored by Treu and certain of the essays in the chapter concerned. These include in the first place the relationship between state action (laws and regulations) on working time, and collective bargaining (or other forms of interaction) between the social partners. Secondly there is the degree of centralisation or decentralisation of the interaction between employers and trade unions (or workers' representatives), a factor which will affect the practicality of dealing, through collective bargaining for instance, with various working time issues (e. g. general working time reductions at industry or national level; flexible working time formulae at enterprise or plant level). Treu also emphasises the need for co-ordination in this respect as between various levels of rule-making. Turning to the key question of the effect of working time reduction on employment, Treu concludes that the answer is at a minimum inconclusive and, to some extent, conditioned on whether one proceeds to a micro- or macro-analysis of the question. The chapter demonstrates in any event that the employment creation effect of reductions in working time will depend on a number of other variables, including public policy measures of different types that promote full employment (not the least of which are those aimed at spurring economic recovery).

Public Service The final chapter, edited by Jack Stieber, deals with public service labour relations, the country essays concerning the United States, the Federal Republic of Germany, Canada, Nigeria, Australia, Israel and Japan. While the major thrust of the chapter concerns those engaged in the administration of the state, the concept of the public or civil service in a number of countries, includes, among others, education, health and scientific workers. Consideration of the still wider public sector is also discussed where relevant. It is clear from a reading of the various essays in the chapter that it is not always easy to draw distinctions between the various areas of public employment, particularly on the comparative and international levels.

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As regards trade union membership, the essays demonstrate that such membership is relatively high, often higher than in the private sector. In this connection Stieber points out that among the reasons for high levels of unionisation is the fact that in the countries concerned there is no opposition to unionisation as such by the government, contrary to an attitude that may be found among private sector employers. At the same time it is often the fact that union strength or influence, irrespective of numbers, is less in the public than in the private sector. This is because national legislation may restrict the scope of bargaining in the public service, or prohibit union membership to certain categories of employees or, most significantly, restrict strikes in the public service. Where strikes are prohibited, provision is frequently made for some form of compulsory arbitration in certain areas of the public service. Stieber points out that where such arbitration does not feature as an element of the system, then strikes in the public service tend to take place, regardless of their legality. There seems to be an increasing acceptance of strikes of public servants in the United States and, in spite of the inconvenience involved, Stieber finds a growing tolerance of such strikes. Indeed, it would appear from the various essays and other discussions that strikes in the private sector can have a more negative impact on the public and the economy than strikes in the public service. As regards various forms of co-operation and worker involvement in decisionmaking (except for collective bargaining or grievance procedures), the chapter confirms that there appears to be a relatively limited development in the public service as compared with the private sector (and mostly restricted to consultative machinery on safety and health or social matters). The absence of competitive pressures in the public services and the lesser professionalisation of the personnel and human resources function therein are frequently advanced as reasons for a lesser degree of workers' participation and co-operation schemes, as well as for a more adversarial tone to labour relations. Stieber notes that while the situation is fluid, and improving in their favour, women in the public service still are far from approaching equality with men both with respect to wage levels and levels of responsibility. At the same time their situation is undoubtedly better in the public service than in the private sector. Stieber concludes by questioning, in the light of developments, whether in the future it will be necessary to make a distinction between labour management relations in the public and the private sectors; indeed he foresees the possible disappearance of public sector labour relations as a "current" issue.

The chapters in this volume focus on some of the key current issues in industrial relations. In doing so, the tenor of some of the discussion in fact calls into question the future of industrial relations systems and institutions as we know them. This is of serious concern to scholars and practitioners in the industrial relations field and, indeed, to democratic societies as a whole. Nevertheless history has demonstrated that there is resiliency in labour relations systems which seem to have a great capacity to adjust to new challenges and therein find the seeds for their own renewal and survival. There is no reason to believe that the current problems facing industrial relations will cause major disruptions in the systems, although significant changes

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are taking, and will take, place both as a consequence of extrinsic factors and in an effort to make industrial relations systems more suitable for dealing with those factors. Notes 1 I should like to thank Werner Blenk and Kate Mennie, both of the IIRA secretariat, for their help. Werner and Kate laboured long and hard with me in editing and putting into shape a number of the contributions to this volume as well as arranging many of the administrative details. I am also grateful to Lisa Stuart, a student at Cornell University and ILO intern, who prepared a draft of the index.

Chapter I Technological Change and Labour Relations

Introduction Russell D. Lansbury

Technological change has emerged, or re-emerged, during the past decade as an issue of major importance for industrial relations. Technological change may be defined as "the process by which economies change over time in respect of the products they produce and the processes used to produce them" (Stoneman 1983). Technological change may involve any change in equipment or process, through the application of knowledge and skills, which results in a significant alteration in the relationship between labour, capital and raw materials. Opinions differ over the degree to which recent changes in technology have transformed society and created a "new industrial revolution." Nevertheless, there is broad agreement that the pace of technological change increased during the past two decades as did the extent of its impact on economies and societies.

Trade Unions and Technological Change Bamber and Lansbury (1987) have argued that in countries with adversarial traditions in industrial relations (such as most English speaking countries), unions are more likely to oppose technological change than their counterparts in countries with recent traditions of social partnership in industrial relations (such as West Germany and the Scandinavian countries). These broad international differences between union responses, however, may be less significant than differences between occupations, sectors and types of unions. Kassalow (see Kassalow in this volume) has noted that in North America, craft unions traditionally resisted technological change fearing that it would reduce or eliminate the need for particular skills. By contrast, industrial unions were more likely to adjust to technological change since it affected only a small fraction of their membership. In recent years, however, the impact of new technology has been all pervasive and has resulted in major work and organisational changes. Kassalow cites a number of cases where unions and management have cooperated on the introduction of new technology. For many unions, this has been a defensive move in order to preserve job security for their members; for the employers it has often been a way of minimising the degree of resistance by unions to technological change designed to make their business more competitive. The long-term impact of new technology on employment is yet to be seen, but Kassalow argues that collective bargaining is still a viable method of negotiating change. However, he also acknowledges that the North American approach to collective bargaining on a company or plant level (rather than the industry-wide approach in most of Western Europe) does make U.S. unions more vulnerable when employers use the new technology to establish new non-union plants.

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Bamber (see Bamber in this volume) notes that a number of unions, especially in Northern Europe, have sought to challenge the rights of management to unilaterally introduce technological change in the work place and have successfully negotiated "new technology agreements" (see Evans 1985, also Williams and Steward 1985). The Geneva-based International Federation of Commercial, Clerical, Professional and Technical Employees (FIET) has issued a model agreement for its affiliates which contains thirty-eight clauses (see ILO 1985). Such agreements usually cover both procedural and substantive issues. The former concerns matters such as the method and scope of consultation, the development of union expertise, the protection of individuals' privacy when data about them is collected and stored by the use of information technology, and the provision of joint reviews of any technological changes. Substantive issues include: redundancy provisions, changes in working hours, payment for new skills, job design, retraining and reskilling, occupational health and safety, and equal employment opportunity (see Blenk in this volume). Not all of these concerns have arisen solely from technological change but perceived threats associated with microelectronics have caused many unions to review and update their earlier policies. Union responses to technological change are influenced by a variety of factors. The economic environment may have two contradictory influences. When unemployment is high, unions respond to pressure from their members to seek to influence the course of technological change, yet unemployment commonly reduces union bargaining power. On the other hand, when there are low rates of unemployment, unions generally have more power to oppose change yet less incentive to do so, since displaced workers can more easily find alternative employment. The structure of union organisation is also important. Where there is industry unionism and strong central union confederations, the union movement has generally been more successful in gaining influence in strategic decision making about new technology at both the national and sectoral levels. However, influence on decisions at the company or plant level requires strong union organisation at the work place, which is sometimes lacking under a more centralised system. In West Germany, for example, attempts by unions to strengthen the role of the works councils at work place level encountered a setback in 1983 when a Federal Labour Tribunal ruled that works councils at Pan-Am had no general right to codetermination on the layout of visual display units. This decision was reversed in a subsequent case when it was shown that the introduction of technology could be used to monitor employee performance and productivity. Nevertheless, unions cannot always count on favourable decisions by tribunals and their degree of influence depends on their ability to exert pressure at all levels.

Employers and Technological Change Jacques Rojot (see Rojot in this volume) has noted that while technological change has always been an important element in the role of management, it has become more essential to management's competitive strategy during recent times. In the early years of assembly-line manufacturing, argues Rojot, the principal reason for

Introduction

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introducing new technology was to reduce direct labour costs by achieving economies of scale and standardisation of production. In more recent years, however, the main objective of technological change in manufacturing has been to achieve a greater degree of flexibility in the production process through the use of innovations such as CAD/CAM and robotics. Although the desire to reduce labour costs is still a significant factor in managements' strategy, increasing emphasis is given to achieving customisation of product and fast reaction times in terms of changes in specification, delivery times and so on. The policies of employers' associations in regard to technological change are generally broad and vague, in order to accommodate the wide range of attitudes among their members across different industries and companies. However, most national employer bodies regard technological change as both necessary and inevitable. In general, employer groups emphasize the positive benefits to be gained from new technology which will make work less repetitive, more interesting and safer by eliminating those aspects which are dangerous or boring. The Swiss Employers' Association, for example, argues that since micro-electronics offer benefits for everyone, the material conditions of life and social status of employees will be improved as a result of technological change (Bodmer 1983). Similarly, the French Employers' Federation (CNPF) has issued a report which emphasizes the role of computers in helping and enriching human work as well as improving the competitiveness of enterprises. The degree to which consultation between management and employees on the introduction of new technology is encouraged varies between employer bodies. Windmuller (1984) has noted that in recent years the issue of codetermination has been of foremost concern to employers' associations in several countries, in part because it has involved the state in the shaping of new modes of industrial relations through legislation which affects the system of collective bargaining, threatens management prerogatives and usually increases union power.

Rojot states categorically that "the acceptable degree of consultation (to employers) is strictly limited" and that most employers argue that decisions about the introduction of new technology "remain and must remain with management alone." He also notes that among international employers associations there is a strong belief that new technology should not be used as a basis for the imposition of additional requirements for "information, consultation or bargaining obligations."

The Role of Government and Technological Change A recent OECD report on Industrial Relations and Technological Change (1985) recommended that the state should not only seek to create the best possible climate for (technological) change but it also has a general duty to deal with such social problems arising from technological change as cannot be resolved by employers and workers and their unions.

Dror (1986) has noted that government policies regarding technological change are of relatively recent origin. One important contributing factor to the expanding role

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of the state in this field has been the growth of government expenditure for military purposes, much of which has involved investment in new, if not revolutionary, technology. The Strategic Defence Initiative (SDI) in the United States and the European Research Coordination Agency (EUREKA) are two such examples. Many of these projects involve international cooperation, for both political and economic reasons, and the technological developments which emerge have important ramifications for the world as a whole. Changes in information technology which have resulted from military research, for example, have profoundly affected the existing division of labour not only within the workforce but also between people and machines. Governments also use macro-economic policy to effect technological change. A variety of incentives exist to encourage investment in new technology in the belief that this will have long-term economic and social benefits. Freeman (1985) has shown, for example, that the two countries with the highest average rate of investment in technology during the past ten years, USA and Japan, have also registered among the lowest rates of unemployment. He also argues that a profound techno-economic change is occuring in the advanced industrial world as it passes from an era of energy-intensive standardised mass production technology of the 1950s and 60s, to information-intensive, flexible systems technology of the 1970s and 80s. The ability of governments to cope with such changes will determine their political futures. Indeed, economic pressures have forced many governments to seek technological solutions to trimming their deficits, especially in public sector enterprises such as railways where new technology is being used in an effort to boost productivity, albeit at the cost of higher unemployment. While there have been moves towards deregulation in some countries, such as the United States, others have experienced greater government intervention or regulation. The active encouragement of "new technology agreements" by governments, especially in Europe, is an example of a new approach which seeks to avoid industrial disputes over technological change. However, governments are also legislating in areas which have traditionally been the domain of collective bargaining such as hours of work, employment security, occupational health and safety as well as in new fields such as protection for workers against racial or sexual discrimination. Although these developments have not emerged directly as a result of technological change, they have been brought into sharper focus by new technology. While employers have tended to oppose greater intervention by government, many unions have actively sought a wider government role, especially where they judge their bargaining position to be relatively weak. However, this trend could lead to a further "marginalisation of collective agreements" and a diminishing role for trade unions which are unable to cope with the new challenges presented by technological change.

The Challenge of Technological Change to Traditional Systems of Industrial Relations: Towards Greater Flexibility? A number of commentators have questioned the degree to which traditional forms of collective bargaining can effectively deal with issues arising from technological change. Kochan and Tamir (1986) have highlighted problems inherent in the North

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American approach whereby management seeks to determine all basic decisions (e.g. the introduction of new technology) and unions simply negotiate over the impact of these decisions. New technology, they argue, is forcing unions to expand into areas of decision-making which they previously considered to be outside their domain. Furthermore, those systems which provide a role for employee representatives at earlier stages of the planning and decision-making process are more likely to respond effectively to changes. The new Saturn division of General Motors, which was established with the cooperation of the UAW to build a small car on a competitive basis in the United States, is cited as one example of a new approach to labour-management relations of this kind (see also Kassalow in this volume). Stronger links need to be forged between collective bargaining at the workplace or micro-level, where the focus is on immediate on-the-job issues, and the national or macro-level where the emphasis is on policy issues such as economic growth and employment. If unions in the United States are to cope effectively with technological change, they will need to play a stronger role at the strategic level of decisionmaking. In Western Europe technological and structural changes, combined with relatively high levels of unemployment, have already brought about major changes not only in the implementation of existing collective agreements (involving issues such as redundancy and retraining) but also in the bargaining levels of new agreements (see also Blenk in this volume). In many countries, there has been a shift away from centralised bargaining at the national level towards industry or enterprise level bargaining, in which local economic conditions can be taken into account more readily. Both the process and substance of collective bargaining has changed from the more militant negotiations of the 1970s to an emphasis on greater cooperation and concessions in the 1980s. Yet in other parts of the world, such as Australia, economic recession has caused a return to a more centralised system of wage negotiations, with less bargaining at the local or industry levels. This underlines the fact that there has emerged a greater diversity of industrial relations processes during recent periods of major economic and technological change. A common theme to emerge in most advanced market economies, however, is a desire for greater flexibility in industrial relations, particularly among employers and governments, as a means of coping with changes in technology and other external pressures. New technologies which emphasise flexibility place job control unionism of the North American and British models at risk, as employers bargain more strongly for new systems of work organisation. Nevertheless, the need for greater flexibility may open up new opportunities for unions and employers to break out of the traditional "scientific management" model of tight job descriptions and narrow classifications and introduce more discretion, variety, training and opportunities for personal growth into work roles and organisations. These new forms of work organisation should also require a higher level of employee participation in task-related decision-making due to the analytical content of the work associated with new technology. Many of the new high technology industries associated with computers are among the small to medium enterprise category and are therefore benefitting from such opportunities for greater flexibility. On the other hand, unions are finding it difficult to recruit members in this sector and are concerned that employers may seek to

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use the conditions obtaining in these enterprises to undermine union coverage and activities in more traditional areas. Yet the trend towards greater flexibility in industrial relations appears to be well established in most advanced market economies and may emerge as one of the most significant and lasting effects of technological change.

References Bamber, G. J. and Lansbury, R. D. (1987): International and Comparative Industrial Relations, London: Allen and Unwin, Chapter 1. Bodmer, W. (1983): Réflexions sur l'application de la microélectronique, Bulletin de Documentation Economique, Geneva: Société pour le dévéloppement de l'économie suisse. Davis, E. M. and Lansbury, R. D. (eds.) (1986): Democracy and Control in the Work Place, Melbourne: Longman Cheshire. Dror, D. (1986): Industrial Relations Implications of Government Policies Towards Technological Change, Hamburg, IIRA, op. cit., infra. Evans, J. (1985): Model Agreements for Negotiating Technological Change, The Management of Technological Change, London: Commonwealth Secretariat. Freeman, C. (1985): Technical Change and Unemployment, Proceedings of an International Symposium on Microelectronics and Labour, Tokyo: Japan Institute of Labour, pp. 347 — 359. IIRA (1986): Proceedings of Seventh World Congress of the International Industrial Relations Association, Hamburg: IIRA. International Labour Office (1985): Technological Change: the Tripartite Response, 1982 — 85, Geneva: ILO. Kochan, T. A. and Tamir, B. (1986): Collective Bargaining and Technological Change: Some Preliminary Propositions, Hamburg: IIRA, op. cit. Lansbury, R. D. and Davis, E. M. (eds.) (1984): Technology, Work and Industrial Relations, Melbourne: Longman Cheshire. Organisation for Economic Cooperation and Development (1985): Industrial Relations and Technological Change, Report of a Joint Meeting of Management and Trade Union Experts under the OECD Labour/Management Program, Paris: OECD. Stoneman, P. (1983): The Economic Analysis of Technological Change, Oxford: Oxford University Press, Oxford. Williams, R. and Steward, F. (1985): New Technology Agreements: An Assessment, Industrial Relations Journal, 16 (3): 58-73. Windmuller, J. P. (1984): Employers Associations in Comparative Perspective: Organisation, Structure, Administration, In J. P. Windmuller & A. Gladstone (eds.), Employers Associations and Industrial Relations: A Comparative Study, Oxford: Oxford University Press.

Unions and New Technology Greg Bamber

Since the late 1970s, some debates about technological change have been almost hysterical. There has been much speculation about "new" technology and a "new" industrial revolution. The main issues, however, are rarely new. Although much current technological change is based on micro-electronics rather than larger mechanical engines, as far as many people are concerned, most of the issues are similar to those of the nineteenth century industrial revolution. Therefore, this essay begins with a historical perspective. It then tries to conceptualise an "ideal type" union policy on technological change and goes on to classify different patterns of union behaviour. The essay also comments on some fundamental challenges which unions are currently facing.

Luddites and Unions In spite of all the writing on recent technological changes (for bibliographies, see Ford et al. 1981, Wooden and Kreigler 1985, Work Research Unit 1985), it is also worth examining some earlier experiences, not least because advocates of technological change often accuse unions of Luddism. The Luddites emerged between 1811 and 1813 in the Midlands and North of England. In night-time raids, they smashed textile machines and wrecked whole factories. In so far as they had a "leader," he was sometimes referred to as Nedd Ludd or General Ludd. There are few available written records about the Luddites' objectives.1 Hence we are not sure to what extent they were opposing technological change as it would displace handworkers or dilute their skills, or trying to persuade the masters who owned the machines to award higher pay and better conditions to their men (O'Brien and Engerman 1981: 161, Pelling 1976: 2 8 - 2 9 ) . It is worth recalling that the Luddites were not organised into unions, which were then illegal and suppressed (Thompson 1968: 537 ff.). If they had been able to channel their grievances through a union, their forms of protest would have been rather different. The early unions established mutual insurance schemes, which could, inter alia, help to compensate those displaced by technological change. Some early unions tried to regulate technological change unilaterally. Increasingly, unions engaged in collective bargaining, as a way of regulating technological change bilaterally (through negotiations with employers). Unions also sought legal enactment, for instance, to influence minimum pay levels and health and safety issues. Such state intervention could be a form of trilateral regulation (involving three parties: unions, employers and the State). These union methods of job regulation generally involve compromise, rather than violent opposition. Nonetheless, the mid-nineteenth cen-

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tury conventional wisdom was that unions oppose technological change. However, even though the 1894 Royal Commission examined the "rules and regulations" of hundreds of unions, "in none of them did it discover any trace of antagonism to invention or improvement" (Webb and Webb 1913: 393). By contrast, where unionism had become reasonably established: the old attempt of the handicraftsman to exclude the machine has been abandoned. Far from refusing to work the new processes, ... Trade unionists ... claim, for the operatives already working at the trade, a preferential right to acquire the new dexterity and perform the new service (1913: 411).

With the benefit of hindsight, we could of course criticise the research methods of the Royal Commission and those of the Webbs. Each placed too much weight on formal documents rather than other forms of research, yet their conclusions are supported by several contemporary studies, which use quite different methods. In the United States, for example, Weikle and Wheeler surveyed the attitudes of local union leaders to technological change. The average response was "a rather mild form of encouragement," but these trade unionists wanted to influence the kind of changes which take place (1984: 100 — 106). In a comparative study, Northcott et al. (1985) asked the technical director (or equivalent) in manufacturing establishments about a range of problems in the use of micro-electronics. They found that opposition from the shop-floor or unions was not seen as a major problem. It was identified by only 16 per cent of the establishments in France, 14 per cent in Germany and by only 7 per cent in Britain. In these countries the directors saw union opposition as a much less important obstacle than such other issues, as the general economic situation, lack of people with the micro-electronic skills, and high costs of development. 2

Union Policies Large unions are generally less likely to oppose technological change than are individuals or particular groups of workers who fear that their own position in the labour process will be adversely affected. In this essay it is important to distinguish the position of such individuals or groups from that of unions as collective organisations (cf. Hyman and Fryer 1975). Most union leaders publicly welcome investment in new technologies. ... almost the entire post-war generation of trade union leaders in both Britain and West Germany have viewed technological advancement not only as necessary but as fundamental to both the short- and long-term interests of their members (Rathkey 1983: 2).

From the vantage point of a national union head office, it is easier for a union leader to adopt such a view, in contrast with a worker or workgroup which is liable to be directly displaced by a particular change. As negotiators, however, union leaders aim to influence how technological change is introduced. They do not want to stop it, but rather to control it, whether unilaterally, bilaterally or trilaterally. In spite of this aim, the role of unions is constrained, in so far as they rarely initiate the introduction of new technologies, but react to employer-inspired initiatives.

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Since the late 1970s, many unions have reconsidered their objectives in relation to the increasingly widespread use of micro-electronic technology. Such objectives have often been published or codified internally by national unions and centres, as well as by various international union organisations. 3 Although these objectives differ, one way of explaining them is to construct an "ideal type" 4 union policy. This includes a series of procedural and substantive objectives. Procedural Objectives Consultation

Consultation should begin by employers disclosing full information about the proposed change, at the contemplative stage in the decision-making process, so that unions can genuinely influence the choice of technologies and how they are used, rather than merely influencing the minor details of implementation. Union

Expertise

Unions should retain their own independent technical specialists, who can appraise employers' proposals. These may be external consultants and/or internal "technology stewards," who should be trained and have access to the employers' technical specifications and to other data. There should be extensive education of union officials and members about the technical and social issues associated with technological change. Data

Protection

Information technology should not be used to invade workers' privacy. Thus employers should not use it to control an individual worker's performance, unless agreed with the union in advance. Unions should have joint control of any data which is collected, how it is used and who can have access to it. (Individuals should have access to any data which relate to them.) Joint

Reviews

Unions should be involved in regular reviews of any technological changes to ensure that the agreed policies are being followed and so that any unanticipated consequences can be dealt with. Substantive Objectives Job

Security

Technological change should not be associated with any loss of jobs. If new technology is used to increase productivity, the output or service should be increased, rather than the volume of labour being decreased. If such a decrease is unavoidable,

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people should be redeployed, with no loss of pay or conditions. Failing that, they should be encouraged to volunteer for redundancy or early retirement, so that the decrease is achieved voluntarily. Such "natural wastage" is not welcomed, but it is preferable to "compulsory redundancy." Redundancy If compulsory redundancy becomes unavoidable, the selection criteria, compensation and length of notice should be negotiated in advance. Those affected should be counselled and helped to find alternative employment. Working Hours Technological change should be used to offer workers more choice about when they work and a reduction in their total working hours, for example, by introducing longer holidays, a shorter working week, earlier retirement, sabbatical leave and the elimination of systematic overtime. It should not necessarily be used to increase the numbers of people who have to work on shifts. Pay Employers should pay extra money to the people who learn new skills. Even if no new skills are required, technological change should be accompanied by a pay increase, rather than a reduction. Job Design The opportunity should be taken to improve the physical and psychological qualities of the working lives of all those concerned. For example, workers should be able to control their own pace and quality of work, which should not be too repetitive or fragmented. Retraining and Reskilling Whenever possible, those people displaced should be retrained to work with new technologies or elsewhere. Thus, technological change should not lead to deskilling; it should be used to create opportunities for reskilling. Employers should invest in training their employees (preferably during working hours). Health and Safety Similarly, technological change should be used to enhance the health and safety of working people, rather than the converse. New hazards and stresses which may be associated with new technology should be eliminated before innovations are commissioned.

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Equal Opportunities Technological change should not precipitate increased polarisation between a highly skilled, well-paid minority and a deskilled, low-paid majority. People should have equal opportunities to be appointed to the best jobs, irrespective of their gender, race, religion or family background. This "ideal type" policy represents a broad generalisation and is not always applicable. There has been growing union concern with such issues as health and safety, equal opportunities and job design. But these concerns have not arisen uniquely in the context of technological change. Little of our "ideal type" union policy has been formulated specifically to confront the current preoccupation with micro-electronics. Rather, most elements of this policy are adaptations of earlier policies. Perceived threats associated with microelectronic innovations have provided union policy-makers with an opportunity to consolidate their strategies and tactics. Coping with technological change has generally been a newer experience, however, for predominantly non-manual unions than for predominantly manual/craft unions. The use of much machinery in offices is more recent than in many fields of manual employment. The formulation of strategies and tactics in any particular case involves all the usual internal debates and negotiation processes among union members and officials (cf. the "attitudinal structuring" and "intra-organisational bargaining" analysed by Walton and McKersie 1965). The outcome may reflect the relative power of different factions or interest groups and their particular priorities.

Union Responses When union negotiators establish their priorities, in exchange for a high level of pay, for example, some workers may be willing to tolerate a repetitive job design or unsafe working conditions. Hence, it is important to distinguish between union policies and union responses in practice. Policies may reflect long-held ideological orientations. Responses are influenced by such policies, but also by the immediate context, over which employers (and governments) may have more influence than union leaders. We can begin to classify union responses into the following five categories: (1) participative involvement; (2) negotiated trade-offs; (3) unconditional acceptance; (4) reluctant acquiescence; and (5) complete resistance.5 1. Participative involvement occurs where unions positively welcome technological change and have a real input into the fundamental decisions about choices and design at the formative stage. Such behaviour would seem to follow if our "ideal type" policy were fully implemented in spirit by all concerned in the change: managers, union representatives and individual employees. This rarely happens. In practice, as in the following four categories, there is little or no union or workgroup involvement in making the formative decisions, which are made more or less unilaterally by the engineers and managers. 2. Negotiated trade-offs means that unions accept a technological change in exchange for certain "trade offs," which usually relate to how the change is

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implemented. This may involve a quid pro quo between pay and conditions, for example. 3. Unconditional acceptance also means that engineers and managers make the decisions unilaterally, but that they may then successfully "sell" the change directly to employees and their unions. In spite of their leaders' policies, some workgroups do not want to participate in decision-making, but accept that "employers should manage." This position may be found with unskilled workers and in new establishments, where there is no union with which to bargain or consult. 4. Reluctant acquiescence again means that engineers or managers make the decisions, but implies that these are presented to unions on a "take it or leave it basis," that the stark alternative may be unemployment. This has increasingly been the case, against the background of economic recession, when unions may not have enough power to oppose the decisions. 5. Complete resistance by unions is rare and usually relatively short-lived, but may occur if the union leaders and members believe that the change will have unmitigated deleterious consequences for them and that these cannot be sufficiently ameliorated by negotiating or consulting with management. This position also implies that the union can exert some power in relation to the employers. International Differences It can be argued (Bamber and Lansbury 1984) that in countries with adversarial traditions of industrial relations (most English-speaking countries) unions are more likely to oppose technological change than their counterparts in countries with recent traditions of social partnership in industrial relations (e. g. West Germany and the Scandinavian countries). To a considerable extent, current differences in union behaviour reflect contrasting legacies of employers' attitudes (cf. Fox 1978). Unions have different methods and priorities in different countries. For example, American and British unions have traditionally placed more emphasis on bargaining after decisions have been made, rather than on participation in making them, in contrast with their German and Scandinavian counterparts, who face more paternalistic employers. However, some British trade unionists have reconsidered their traditions and have concluded that collective bargaining has not always proved an effective means of regulating technical change. Managers have not generally been willing to concede their "managerial prerogatives" voluntarily. Since the 1960s, the law has increasingly intervened in British industrial relations and many unions are again seeking to supplement collective bargaining by legal enactment and government action, for instance, to stimulate economic growth, foster some forms of industrial democracy and to limit overtime working. Moreover, there have been some workers' plans to initiate alternative technologies (cf. Wainwright and Elliott 1982). Scandinavian unions have tended to put more emphasis on job design than unions in most other countries. But the Swedish unions have generally not adopted the tactic of aiming to cut working hours. However, international differences in union strategies are less significant than differences between occupations, unions and sectors.

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Differences between Sectors In many countries craft printing-workers' unions have tended to resist technological change, while industrial unions in the electronic industry have tended to co-operate with it. How can we explain such differences? Following Slichter et al. (1960), we can begin to predict union responses by answering four questions. First, is it a craft or industrial union? (The former generally oppose change which destroys the basis of their craft.) Second, what is the state of the product market? (Unions are more likely to accept change where there is a high degree of competition and an expanding market.) Third, what is the type of technological change (in terms of (a) the number of jobs affected, (b) the effect on the degree of skills required, (c) the effect on the kind of skills required)? Fourth, at what stage is the innovation? (Union opposition is most likely at an early stage, when there is still considerable uncertainty about the change.) The economic environment shapes union responses, but can have two contradictory influences. On the one hand, unions generally have more power with which to oppose change where there is a tight labour market, than where there is a slack one (cf. Hunter et al. 1970). Yet, on the other hand, where the labour market is tight, perhaps there is less motive for unions to resist change, given that it should be easier for displaced workers to find alternative employment. Where the labour market is slack, there is likely to be more of a motive for union resistance, but it is generally less effective. A study of the transport industry suggests that the following factors incline a union to accept a change: (a) a broad membership base, (b) large size, (c) political security of the union and leadership, (d) absence of interunion rivalry, (e) a concentration of power within the union, (f) employer unity, and (g) incentive payments which reward workers for achieving higher productivity following technological change (Levinson et al. 1971). Another American study finds that union leaders are most likely to accept change if they perceive that: (a) only a small proportion of the jobs in an affected unit would be lost, (b) the change is inevitable, (c) there could be a quid pro quo for the lost jobs (McLaughlin 1979).

Challenges for Unions Turning from their current policies and responses, what further challenges are unions facing? Union Organisation The formal organisation of a union is often defined in a rule-book, which originated when the union (or its predecessor) was first formed (perhaps in the nineteenth century). Unions could now be organised rather differently, to take advantage of modern communications and computerisation. It is difficult to change such a traditional democratic organisation, however, particularly if its current leaders have risen to power through it. Moreover, few unions have had either the expertise or the available spare cash themselves to install advanced communications and computer systems.

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For such reasons, unions have tended to be slow to make much use of such micro-electronic technology, in contrast to some businesses. Nevertheless, in the 1980s many unions are themselves introducing technological change. Their membership records and financial control can often be administered more efficiently by computer than by older manual methods. Furthermore, some unions are using new technologies to provide a better service to their members and officials. For example, unions are trying to improve their research methods. They are using electronic data processing to analyse recruitment patterns and prospects, employers' finances and industrial relations awards, agreements and contracts. Some unions are considering the use of information technology to improve interand intra-union communications. Union officials, researchers, stewards and rankand-file members may wish to be able to communicate with each other about current issues, much more quickly than by written circular, mass meetings, conferences and postal ballots (cf. Warner 1984). Structural Change In most countries, union boundaries are usually defined either in industrial or occupational terms. In the face of rapid technological change, certain industries and occupations are declining or even becoming obsolete. In other cases, the former distinctions between industries and occupations are diminishing and sometimes disappearing. These changes pose great challenges for unions, especially for those whose boundaries are defined in terms of a declining occupation. Many such unions have looked or are still looking for "appropriate" partners to merge with. The criteria of appropriateness may be defined with regard to technology. In practice, however, most unions are more concerned to look for a partner which has compatible forms of government and job regulation and will strengthen their bargaining power. Also, union officials often have their own reasons for seeking mergers, which may be motivated by political, personal and parochial interests (Mansfield 1981, Bamber 1986). In most countries unions generally find that it is easier to recruit a high density 6 of membership in the public sector and the older heavy industries, especially in the larger establishments, where there is a high concentration of potential members. Partly as a reflection of technological change, however, a declining percentage of the workforce is employed in heavy industry. Many establishments are becoming more capital-intensive. There are more intellectual workers and fewer manual workers. Moreover, there is a relative growth in the numbers of people employed in the service sector relative to manufacturing. Toffler (1983) calls this a shift from the Second to the Third Wave. He foresees a continuing move away from mass production towards a "demassified" economy. Corporations are increasingly using sophisticated information technologies to decentralise and even to fragment the organisation of work. People are being employed in smaller units, rather than in large factories and offices. There is also a revival of latter-day homeworking, by subcontractors, who may communicate by computer technology. But homeworkers are difficult for unions to recruit and hence to mobilise. Such structural changes represent profound challenges for the union movement. These changes have exacerbated the relative decline of union density in Japan, the United States and the United Kingdom in the early 1980s.7

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Corporate Decision-Making Although corporations may be decentralising the organisation of work and the implementation of personnel management practices, they mostly continue to make the main decisions about corporate strategies and major investments in technological change at a central level. In Britain, Canada and the United States, for instance, where most private sector collective bargaining is devolved to a local level, unions experience great difficulty in influencing the conception and implementation of technological change. There is often a mismatch between the most important level of company decision-making and the level at which unions bargain. Nevertheless, even in countries where unions do have board-room representation, they still complain that they are unable to exert much real influence over technological change. This complaint is not only in relation to foreign-owned multinational corporations. Unions are also concerned that the design criteria may be established by technical experts or in other companies to which they have no access.

Conclusion Technological change does not generally raise fundamentally new issues for unions. Nor is it a discrete issue which can be dealt with separately from most other issues associated with the employment relationship. Most elements of our "ideal type" policy were on union agendas long before micro-electronics. However, the rapidity and extent of current changes add up to a great challenge for unions, especially against the background of high unemployment and the changing international division of labour. This challenge relates to and further complicates most of the existing union priorities (Moore and Levie 1985). Hence, discussion of these issues should not try to focus on technological change and unions in a vacuum, but should recognise the historical, economic, political and social context. Notes 1 For an account of a Luddite attack, see Charlotte Bronte's Shirley (London: Octopus, 1849). Other countries also had their Luddites; for a valid description of anti-machine protests in France, see Stearns (1972: 25 ff.). 2 Interestingly, in Britain, opposition from top management was seen as a problem "by 5 per cent of the establishments, slightly less often than trade unions, but the figure may under-represent the extent of the difficulty since a proportion of the respondents would probably regard themselves as top management and would be unlikely to see themselves as a major obstacle" (Northcott et al. 1985: 38). 3 For details of union policies in various countries, see, on Australia: Markey (1983); on Britain: Williams and Steward (1985); on Sweden: Anderman (1967) and the Swedish Trade Union Confederation (1983); on Norway: Keul (1983); and on various other countries, see Bamber and Lansbury (1983); European Trade Union Institute (1982). For examples of some international union policies, see Watts and Pitous (1981); FIET (1983); Rush and Hoffman (1983); ICFTU (1984); EMF (1985). 4 The "ideal type" concept is used here in the Weberian sense as an exaggerated abstraction. It simplifies to illustrate typical union policies on technological change, but the various

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items are "more or less present and occasionally absent" in particular cases. Actual policies and practices can be better understood by comparing them with the "ideal type." This does not imply a moral value of the "ideal;" see Weber (1949). 5 For other approaches to classifying union behaviour, see Slichter et al. (1960); Francis and Willman (1980); Evans (1983). 6 Density of union membership is given by the formula: actual union membership x 100/ potential union membership. 7 Of course there are other reasons for the decline in unionism, such as the increase in unemployment. Also, the American and British unions blame the anti-union policies of President Reagan and Prime Minister Thatcher for some of the continuing decline in this period.

References Anderman, S. D. (ed. and transí.) (1967): Trade Union and Technological Change: A Research Report Submitted to the 1966 Congress of Landorganisationen I Sverige (LO), London: Allen and Unwin. Bamber, G. J. (1986): Militant Managers: Managerial Unionism and Industrial Relations, Aldershot: Gower. Bamber, G. J. and Lansbury, R. D. (eds.) (1983): Technological Change and Industrial Relations, an International Symposium Special Issue of the Bulletin of Comparative Labour Relations, Vol. 12. Bamber, G. J. and Lansbury, R. D. (1984): Industrial Relations and Technological Change: Towards a Comparative Typology? Paper submitted to the Regional Congress, International Industrial Relations Association, Vienna (Oct.). Davies, A. (1984): The Management/Union Relationship in the Introduction of New Technology, In Piercy, N. (ed.): The Management Implications of New Information Technology, London: Croom Helm. European Metalworkers' Federation (EMF) (1985): EMF Basic Demands with Regard to Technological Change and a Changing Society, Brussels: EMF. European Trade Union Institute (ETUI) (1982): Negotiating Technical Change, Brussels: ETUI. Evans, J. (1983): Technological Change: A Trade Union Perspective, Address to the International Graphical Federation Congress, Paris: IGF. (FIET) International Federation of Commercial, Clerical, Professional and Technical Employees (1983): Model Technology Agreement, Geneva: FIET. Ford, B. et al. (1981): Technology and the Workforce, Sydney: Technology Research Unit. Fox, A. (1978): Corporatism and Industrial Democracy: The Social Origins of Present Forms and Methods in Britain and Germany, In Industrial Democracy: International Views, Coventry: Industrial Relations Research Unit, University of Warwick. Francis, A. and Willman, P. (1980): Microprocessors: Impact and Response, Personnel Review, 9, 2 (Spring). Hingel, A. J. (1984): A Promethean Change of Industrial Relations: A Comparative Study of Western European Unions and Technological Developments, In Warner, M. (ed.): Microprocessors, Manpower and Society: A Comparative, Cross-National Approach, Aldershot: Gower. Hunter, L. C. et al. (1970): Labour Problems of Technological Change, London: Allen and Unwin. Hyman, R. and Fryer, R. H. (1975): Trade Unions: Sociology and Political Economy, In Mc Kinlay, J. B. (ed.): Processing People: Cases in Organisational Behaviour, London: Holt, Rinehart and Winston.

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International Confederation of Free Trade Unions (ICFTU) (1984): Technology, Growth and Development, In ICFTU 1984 World Economic Review: The Reality of Interdependence, Brussels: ICFTU. Keul, V. (1983): The Trade Union Movement, Research and Data Technology: An Account of Three Research Assignments for Trade Unions, In Fossum, E. (ed.): Computerisation of Working Life, Chichester: Ellis Horward. Levinson, H. M. et al. (1971): Collective Bargaining and Technological Change in American Transportation, Evanston: Northwestern University. Mansfield, B. (1981): Technological Change and the Trade Unions, In Evans, G. et al. (eds.): Labor Essays 1981, Richmond, Vic.: Drummond. Markey, R. (1983): The Trade Union response to Technological Change in Australia, Sydney: Industrial Relations Research Centre, University of New South Wales. McLaughlin, D. B. (1979): The Impact of Labor Unions on the Rate and Direction of Technological Innovation, Washington, National Technical Information Service, PB295084. Moore, R. and Levie, H. (1985): New Technology and the Unions, In Forester, T. (ed.): The Information Technology Revolution, Oxford: Blackwell. Northcott, J. et al. (1985): Micro-Electronics in Industry: An International Comparison, London: Policy Studies Institute. O'Brien, P. K. and Engerman, S. L. (1981): Changes in Income and its Distribution during the Industrial Revolution, In Floud, R. and McCloskey, D. (eds.): The Economic History of Britain since 1700, Cambridge: Cambridge University Press. Pelling, H. (1976): A History of British Trade Unionism, Harmondsworth: Penguin. Rathkey, P. (1983): New Technology and Changes in Industrial Relations: An Anglo-German Comparison, for the EC Commission, Stockton: Jim Conway Memorial Foundation (EC Doc. V/509-83-EN). Royal Commission on Labour 1891-94 (1894): London: HMSO (c. 6708). Rush, H. and Hoffman, K. (1983): From Needles and Pins to Micro-Electronics: The Impact of Technical Change in the Garment Industry, International Textile, Garment and Leather Workers' Federation, Paper to ITGLWF meeting on Technological Change in the Clothing Industry. Slichter, S. H. et al. (1960): The Impact on Collective Bargaining on Management, Washington: The Brookings Institution. Stearns, P. N. (ed.) (1972): The Impact of the Industrial Revolution, New York: Prentice Hall. Swedish Trade Union Confederation (LO) (1983): Computers on Human Terms, Stockholm. Thompson, E. P. (1968): The Making of the English Working Class, Harmondsworth: Penguin. Toffler, A. (1983): Previews and Premises, London: Pan. Wainwright, H. and Elliott, D. (1982): The Lucas Plan: A New Trade Unionism in the Making? London: Allison and Busby. Walton, R. E. and McKersie, R. B. (1965): A Behavioural Theory of Labor Negotiations, New York: McGraw-Hill. Warner, M. (1984): The Impact of New Technology on Participative Institutions and Employee Involvement, In Piercey, N. (ed.): The Management Implications of New Information Technology, London: Croom Helm. Watts, G. E. and Pitous, C. (1981): Impact of Technological Changes, Geneva: Postal, Telegraph and Telephone International (PTTI). Webb, S. and Webb, B. (1913): Industrial Democracy, London: The Authors (most of the book was written in the 1890s). Weber, M. (1949): The Methodology of the Social Sciences, Glencoe, Illinois: Free Press. Weikle, R. D. and Wheeler, H. N. (1984): Unions and Technological Change: Attitudes of Local Union Leaders, In Proceedings of the Thirty-Sixth Annual Meeting, Industrial Relations Research Association Series, Madison: IRRA.

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Williams, R. and Steward, F. (1985): New Technology Agreements: An Assessment, Industrial Relations Journal, 16, 3. Wooden, M. and Kreigler, R. (1985): Technological Change in Its Implications for Industrial Relations, Adelaide: National Institute of Labour Studies Working Paper Series No. 78. Work Research Unit (WRU) (1985): New Technology: The Trade Union Response, London: Information System Bibliographies No. 24.

Employers' Response to Technological Change* Jacques Rojot

Introduction Technological change is nothing new to managers, who have always been dealing with it and introducing it in their operations. It is an essential element of management's competitive strategy. The process of "creative destruction" which characterises business is nowhere better illustrated than in the field of technology: technological progress often makes plant and equipment obsolete long before they are used up. On the other hand, very often a machine is replaced, because it is worn out, by an improved model. Thus technological change is imposed from outside, because of progress in research, or creeps in slowly from inside because of the regular replacement cycle. However, the question before us is to analyse the employers' response to technological change. This may imply that present technological changes, generally described and known under the term of new technologies, are to some extent different from what has occurred in the past, either because of the sheer quantitative magnitude of the changes they bring forth, or because of a qualitative change. The latter implies that they are of a different nature than the past ones, that they constitute something new and different. We shall attempt to answer that question from an employers' viewpoint. At this point, we should simply note that there are opinions that, indeed, the new technologies do bring differences as compared with the past process of technological change. For instance, a group of OECD experts argued that, although "[t]here is nothing new about technological change, it is as old as industry itself ... the current wave of change potentially affects more jobs or skills over a wider area of employment, than any preceding wave." 1 The research director of a large French firm noted that the prevalent feeling was that "new technologies ... were ... going to invade us and that the old world would have to submit to the upheaval they will bring into [our] daily lives."2 Our first step will consist of trying to define what are these new technologies or this new wave of technological change from the employers' point of view. Then, we shall approach the employer's responses from two angles. Firstly, at micro level, that of the management of production operations at plant level, and secondly at a macro level, that of the positions and policies of national employers' organisations.

The New Wave of Technological Change In order to focus on what the object of our analysis is, an effort towards definitions should first be made while keeping in mind the nature of our field of interest: industrial relations.

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What are the new technologies, and what is the content of the new wave of technological change? In the article3 already quoted a manager defined them as belonging to three fields: micro-electronics and information technology; new materials; biotechnologies. Some other writers also add nuclear technology.4 However, although new problems have arisen in all these fields (and in particular ethical problems, such as safety, citizens' rights, genetic manipulation, etc.) it seems that it is around micro-electronics and communications that most industrial relations problems are focused. Within this field, a wide array of new terms is coming into use, from "robotics" to "mechatronics" and many others. However, from an entrepreneurial point of view, the new technologies in this field are of concern only when they interact with markets, production and management. The first area concerns the consumers, final or intermediate, of products made feasible by the new technologies and the field seems limitless, but outside the area of industrial relations. The second two areas are generally understood as belonging to the domain of Computer Integrated Manufacturing (CIM) also called Factory Automation (FA). However, this is of little help. One acknowledged expert in the field writes that "defining CIM is as much of a challenge as defining artificial intelligence" and goes on by not defining it but by providing "a way of thinking about it at the enterprise level."5 All the following definitions will be drawn from the same source: a market survey conducted by a large consulting firm.6 All aspects of manufacturing activity are affected by CIM components: the design of product and process, the actual manufacturing of the product, planning and control, and the flow of information between the three functions. The design function is the domain of Computer Aided Design (CAD) which itself covers several technologies beyond the design proper which is the actual use of computer graphics systems to design a part. Other technologies include Computer Aided Engineering (CAE), the analytical software used to evaluate the parts design; Numerically Controlled Parts Programming (NCPP) which creates instructions for the computer controlled machine tools; and Computer Aided Process Planning (CAPP) which plans the manufacturing operations. The basis of CAPP itself is group technology based on the principle that many of the parts which are going to be used in a new design pre-exist this design and few of the needed parts will be really new. Thus, group technology identifies similar parts in different processes, or even similar full processes. A software system classifies and codifies products and processes, grouping parts with similar characteristics. Then, a set of manufacturing machines is created for each group of parts. Planning and control is the domain of Manufacturing Planning and Control System (MP&CS) which are computer based Manufacturing Information Systems. The best known of these systems is a software for Manufacturing Resource Planning (MRP). Such systems process data in traditional areas of manufacturing, such as planning for material requirements, but can also be used for scheduling, forecasting and cost accounting. Additional areas are planned. M P & C S are completed with automatic material-handling systems whicn include automated storage and retrieval systems and automatic guided vehicle systems. Actual manufacturing is the domain of Computer Aided Manufacturing (CAM) which is also sometimes understood as

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including Automatic Material Handling Systems. CAM includes different aspects: computer run machine-tools which include Numerically Controlled machines (NC) controlled by punch tapes; Computer Numerically Controlled machines (CNC) controlled by their own computer; and Distributed Numerically Controlled CNCs (or DNC) where more than 100 CNCs are hooked together and where each CNC can at any time be programmed to make a given part in a given sequence from programmes stored in a central computer. Flexible Manufacturing Systems (FMS) consist of DNC controlled CNCs with an automated material handling system and a Manufacturing and Planning control system. They also often include robots. Arthur D. Little's report underlines that these new technologies have been developed because of computing technology and that further progress is to be expected because of linkages between the data bases. The integration of all data used in the various technologies will magnify the benefits and effects of each technology considered separately.7 CIM or FA has its equivalents in other sectors of the economy and is not restricted to industry: Laboratory Automation (LA) in research and development, Office Automation (OA) in administration and management (which includes the better known word processors, electronic mail, office of the future, etc.) and Store Automation (SA) in stores. 8 Management geared to make the best use of these technologies has been called "Mechatronics Management" 9 where electronic and mechanical processes are combined for the greatest efficiency.

The Employers' Response at the Micro Level We can now turn to employers' responses to the new technology, thus defined. We will proceed first at the micro level, the level of the introduction of these new technologies in the plant, at the workplace. The easiest way to understand the employers' responses is to look at what employers can hope for and expect from new technologies when they introduce them. Data can be drawn first from the syllabus of a course at a business school and secondly from a few monographs on the subject from different countries. In 1970 Piore and Doeringer reviewed the process by which employers introduced technological changes and innovations in the manufacturing process.10 They underlined the key role operating management was playing in the search for selecting points where innovations might be introduced, the summary estimations of labour costs and the prevalent distrust of hourly labour by engineers biased towards substituting capital and mechanising whenever they had discretion to do so. A reason they outlined for introducing new technology may be summarised as related to cutting production costs and increasing productivity; also to overcome operating problems such as equipment breakdown, deterioration in quality, etc. "A number of innovations were specifically designed to improve the speed and accuracy of processes which feed material into new machines or receive output from them." It also could be introduced with the single goal of cost-cutting. This view is supported by other authors 11 who state that traditionally, "The US companies that did invest

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in internal process development (of production technology) emphasised investments that reduced costs, displaced high labour costs or increased output." The benefits to be expected from the introduction of new technologies seem to be of a different nature and not entirely geared to cutting production costs. Some Japanese studies12 indicated the following results. First, in a survey carried out in 1982 — 83 by the government of the Hogyo prefecture in a major Japanese manufacturing area, the following objectives were listed by the enterprises surveyed for the utilisation of robots13:

— — — — — — — —

Enhance productivity Improve quality and precision Rationalise work processes Labour savings Deal with increased orders Prepare for future expansion of business Solve skilled labour shortage problems Automatise hazardous, hard and/or monotonous work processes — In response to demand from parent company/major customers

- Other — No response

Installed

Planned

52.4 14.6 23.2 50.0 11.0 7.3 6.1

44.1 12.4 25.8 58.1 2.7 2.7 11.3

29.3

36.6

2.4

.5

1.2

2.7 —

-

Secondly, a study was carried out by the Tokyo Chamber of Commerce and Industry in 1981 on major factors leading to robot utilisation in small-sized companies. In two areas surveyed, 2.5 per cent and 7.8 per cent of the enterprises were utilising robots, primarily in the machine industry. The reasons cited for deciding to use robots were, in decreasing order by percentage of enterprises: — — — — — — — — — — — — —

Enhance productivity Improve product quality (precision) Rationalise production process Reduce labour Prepare for future expansion Substitute for skilled workers Reduce labour costs Increase incoming orders Solve worker-shortage problem Release workers from hazardous and dangerous jobs Meet demand of customer companies Save energy Other

84.2 61.4 60.0 44.2 37.2 32.4 28.7 24.3 18.8 10.7 6.4 4.3 2.1

According to case studies carried out afterwards, there was no major difference between a priori expectations and the results achieved. According to the "Survey on Technological Innovation and Labour" 14 conducted by the Japanese Ministry of Labour in November 1982 in enterprises employing at

Employers' Response to Technological Change

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least 100 regular production workers in the manufacturing sector, the effects were mainly: a reduction in required manpower in 40 per cent of the cases (with an increase of 5 per cent in production), a reduction of production costs, an increase in production volume and an improvement in quality and accuracy. A survey by the Ministry of Labour in 1981 gave much the same results. The results of an additional survey conducted by the Japan Office Automation Association deserve to be quoted for they include the reasons and objectives of employers for applying automation to clerical and administrative jobs in offices. 15 The objectives in introducing office automation were listed as: (1) (2) (3) (4) (5)

productivity increase in order to reinforce competitive position (over 40 per cent); replacement of monotonous work by machines (over 20 per cent); improvement in organisational information processing ability; improvement in work speed and reliability; a tool to facilitate decision making by top and middle management.

Generally speaking the proposition that the introduction of the present wave of new technologies is not only, or sometimes not even, geared towards cutting production costs is supported by another source of information about employers' potential benefits from introducing them. The strategic benefits are listed as such by a large consulting firm:16 CAD may bring higher productivity by a ratio of 3 or 4 to 1, better quality, shorter design cycle, can evaluate more designs, eliminate prototypes, reduce drafting time and effort, examine dynamics and provide a common valid parts description in data bases accessible to the entire staff. CAPP may reduce the need for process engineers, allow utilisation of optimal processes, standardise routings, reduce the cost of introducing new parts, allow more effective use of inventories and a faster response to engineering changes. MP-CS bring quantitative benefits: reductions in inventory and a radical decrease in inventory shortages and errors, an increase in productivity by improving the output per man/ hour and a decrease in overtime, a decrease in costs of manufacturing, costs of purchasing parts and indirect labour costs, a better service to the customer by sharply decreasing late shipments as well as stock shortages and delivery time. It also brings qualitative benefits: improved customer relations because of better planning and flexibility and higher product quality; better functional communications because of creating a common language for all in the company and increased teamwork and more professional management because of more accurate planning and emphasising the managerial role of foremen. Automated material handling brings higher accuracy in inventory records, reduced storage requirements, increased labour productivity (fewer employees and more stocks per day), increased safety, increased stock-room security, reduced product damage, and material is fed directly to material handling equipment. All the components of CAM also bring specific benefits: NC, CNC, DNC machine tools increase labour productivity at a 3 to 1 ratio, increase product quality, decrease the quantity of scrap and work to be redone, demand fewer skilled operators, require less set-up time and can be programmed on-line. FMS also increases labour productivity, allows higher (maximum) machine utilisation, reduces operating costs, decreases scrap and the necessity for re-doing work and increases quality tremendously. Robots increase quality, enable higher productivity, substitute for humans in hazardous, monotonous jobs, are programmable to be flexible, are much more reliable than humans, and save space because they do not require mounting.

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Finally, data integration allows better management of the flow of manufacturing data and better communications within the whole organisation. This provides for overall improved product quality and improves production efficiency.

Clearly, cutting labour costs and decreasing direct costs still plays a part in the employers' motivation to introduce new technology, just as it played a part in the introduction of technological innovations in the past. However, there has been a marked change since the wave of technological change which in the 1920s and 1930s led to the generalisation of Taylorism, the assembly line and transfer lines. The objective then was strictly to cut direct production costs and increase productivity by utilising the new techniques of mechanisation and economies of scale with the standardisation of production. Running through the list of benefits expected from the new technologies and the results they brought, we note that many other reasons are involved besides cutting direct costs and improving productivity. These include: improved quality, better relations with customers, faster response to change, scrap and waste elimination, quick introduction of new specifications, etc. It is not totally surprising that the concern of employers is shifting away from decreasing labour costs, only because the proportion of direct costs in production costs has been consistently decreasing and stands now as a relatively low percentage of total costs, as the table below illustrates.17 Table 1 : Structure of Production Costs in Manufacturing for an Average-Sized Plant

Suppliers: Materials & energy Direct labour Manufacturing & overheads

Europe 1985

Europe 1984

Japan 1984

USA 1984

64.0 14.5 21.5

56 18 26

66 14 20

58 15 27

The competitive edge of a manufacturer may thus well depend on cost savings in areas other than direct labour, which now constitutes the lowest component of total costs and where any increase will produce the least significant global effect. In Europe a 10 per cent increase would, for instance, represent only 1.4 per cent of total costs whereas the same 10 per cent increase in materials and energy would represent 6.4 per cent. Thus, employers' concerns over production and manufacturing are now of a different nature. A survey in trends in manufacturing 18 over the period 1979 —1985 has shown the following trends, which appeared correlatively with an increase in productivity (measured in man hours per unit): a sharp decrease in scrap and work having to be redone and in rejects, whereas usually scrap and imperfect work increase when productivity is increased, correlated with a decrease in inventory and an increase in parts inventory. It is clear that management had previously focused on improving inventories and quality. It had been possible to do so whilst creating improved relations with customers and improving productivity, only because of the different nature of the new wave of technology. It used to be a law of production in manufacturing that the automatisation of the production process varied correlatively with the standardisation of the product: in other words, one-of-a-kind specific set of machines and

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35

skills were used for one-of-a-kind projects, job lots for very varied products produced in many categories in small batches, batch production for relatively stable lines of products, assembly lines for highly similar products, continuous flow processes for bulk products. To sum up, high volume products could be manufactured with high economies of scale because of total standardisation, but changes in the production process or the product design were either impossible because of the inflexibility of the manufacturing process or because they were prohibitively expensive. On the contrary, the production process was highly flexible for one kind of product, but the technology did not allow for mass production and economies of scale were not possible. What C I M did was to reintroduce a large element of flexibility in the production process. For instance, the use of FMS, robots or C N C controlled D N C s allows for different products to be manufactured in the same line according to on-line programming within the system, i. e. different models or sizes of a car may be made on the same assembly line. Data processing, F M & C S allows for "to the day" inventory management and cuts delivery times. The cost in flexibility incurred by the gain in productivity brought about by the former means of automatising production can now be recuperated to a large extent. What the new technologies do is not only increase productivity further, but also combine with such increase the benefits of flexibility: customisation of product and speedy reaction in terms of changes in specification, delivery time, etc. is now possible. In that sense, the new technologies are indeed different. The employers' response to them should be understood not only in terms of a response towards an additional way to cut costs or to increase productivity, but also in terms of an instrumental new strategic tool carrying consequences largely beyond the scope of manufacturing and implying for instance different relationships with customers, suppliers, and employees, different plant locations, etc. Many of the concerns that the employers' response has to take into account at plant level are beyond the scope of this essay and treated elsewhere: job displacement, change in skill content of jobs, impact on employment, location of plants in relation to markets, etc. However, one central consequence that will have to be taken into account is that it implies a different personnel and industrial relations strategy from management's point of view. The introduction of elements of C I M has not always been successful and a key factor seems to be the implementation of the systems. In other words, robots and F M S do not (yet) work totally alone, "people make robots work," but people may decide that they do not want the robots to work. The co-operation of employees is essential for the introduction and smooth functioning of CIM. Its potential benefits are huge, but it also has an even larger potential for mishandling because of its complexity, need to be serviced, etc. Thus C I M may also have consequences on managerial styles and lends itself to a far more participative type of management in the factory and the office. The concern is already present. 19 Clearly, it has been know for some time that a given technology does not impose a specific type of organisation of labour; several models are possible and can coexist within a given technology. 20 Thus personnel management and industrial relations may become instrumental in the efficient operation of C I M if participative management allows it to work better.

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Interestingly enough, authors operating from totally different perspectives reach relatively similar conclusions. For instance, it has been advanced 21 that the introduction of new technologies, in fact, is not really pursued for rational, technical, market or production reasons, but that it is a pretence, a destabilising factor used consciously by employers to bring about changes and social mutations in a situation where the working class has come to assert too much power over the Taylorised production process and to introduce new forms of social control over employees, for instance by "responsibilising" them.

The Employers' Response at the Macro Level The second focus of inquiry concerns the response of employers to new technology at the macro-level: that of employers' organisations (both national and international). Clearly statements issued from these organisations represent policy statements from the most authorised sources speaking for the collectivity of employers. However, such statements are carefully drafted, for at least two reasons: employers and top management represent a very diversified group in terms of size of enterprise, industry, ideology, etc. There is little common ground between the top manager of a multinational corporation operating in a high value-added, highly profitable, technology-intensive industry and a small owner-employer operating a three-person business in a highly competitive, labour-intensive, not very profitable field. Statements from employers' associations, however, must represent a common denominator at least marginally acceptable by the majority and, as such, blend extreme positions into compromises. Secondly, employers' associations are constantly engaged either in direct bargaining with labour unions, or in monitoring and advising members themselves involved in bargaining. Therefore, such statements which become public knowledge must also be extremely cautions, for, if they were not, they could be used by the opposing party in bargaining and be considered to constitute unilateral binding commitments. Central employers' organisations consider that the introduction of new technology in all areas of business is inevitable. A Swiss employers' working group 22 considered that this introduction did not depend on the goodwill or planning of employers but was ineluctable. It was far more than a competitive asset or edge, but rather a basic condition to stay in business. This was echoed by a spokesman of the German Employers' Confederation 23 who stated that for "the German economy ... technological change is a question of survival." In addition, a German Employer member of the Governing Body of the ILO 2 4 noted that "there is no alternative" for enterprises and countries to using a new technology when it is ready. In the same vein, a position statement from UNICE 2 5 warns that there is no freedom of choice but to introduce technological innovation because of national and international competition. However, if it is clear that enterprises have no choice in deciding to introduce new technologies, it is also clear that the effect of these technologies cannot yet be clearly measured. This concerns not only the effect in areas where it is controversial,

Employers' Response to Technological Change

37

such as the impact on employment or the impact on quality of working life, but also what can be expected from the technologies themselves. BIAC 26 noted that "many uncertainties surround the new technologies themselves ... As is always the case with totally new technologies, we are moving into unknown territory and must grope our way around." Among the uncertainties felt by employers, one which seems prevalent is the degree of acceptance by the workforce. It is significant that the representative of the French Metalworking and Mining Employers' Association27 recalled how "new technology" was received by employees in 1804. When Jacquard invented a new model of the automated loom, workers in several instances destroyed them and even threatened to kill him. The Anglo-Saxon equivalent of this reaction to what appears to be a threat to employment and a challenge to traditional work is found in the often cited actions of the Luddites. At this point, it is interesting to note that Selig Perlman based his very influential theory of industrial relations largely on the "manualist" spirit of workers. This spirit is rooted in a deep economic pessimism and the innate awareness that opportunities are limited and job opportunities always fewer than job seekers.28 Employers' associations are aware that, although there is no choice but to implement the new technologies, acceptance by the employees is essential for successful implementation. It should be mentioned here that employee resistance may not only be limited to blue-collar or white-collar employees who may foresee their jobs displaced or suppressed. It may very well extend to management when new forms of communication, data handling and information processing may threaten power positions as well as deeply ingrained work habits and status symbols. In this regard a study group of the Swiss Employers' Association recommends a strategy for introducing micro-electronics, under which everyone concerned should be, and be convinced they will be, better off after implementation. 29 Social, psychological and economic problems must be foreseen and taken care of beforehand. Specifically, opposition from employees can be prevented if material conditions and social status of employees are sufficiently well guaranteed. 30 Of course, this approach stems from the belief that micro-electronics do offer benefits for everyone.31 This concern for the social effects of new technologies seems largely prevalent in the position of many employers' associations such as UNICE 32 and the Dutch Christian Employers' Federation. 33 In the same way, the French Institute of the Enterprise produced for the French Employers' Federation (CNPF), a report whose goal was to give individual employers elements of information and for reflection on computer science. Significantly, the goal of the report was to "find a compromise between a computer science of a productivist nature, improving the competitivity of enterprises, and a computer science of a more social nature, enriching human work." 34 From this perspective it is often pointed out that new technologies will allow for less repetitive, more interesting and safer jobs by eliminating dangerous or boring work. 35 In order to achieve these aims, the means most often used is to inform the general public as well as employees. Also a certain degree of consultation of employees is often recommended, for instance by UNICE, the UIMM 3 6 and the Dutch Christian Employers' Federation 37 . The last organisation points out that it is experimentally proven that automation introduced without the participation of employees will not

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achieve maximum results. It should also be noted that employer members concurred with the conclusions of the report of the ILO consultative commission on technology which adopted the principle that governments should encourage and institutionalise an industrial relations environment within which employees and employers can usefully consult each other on decisions to introduce new technology. These consultations should concern the economic and social consequences of the new technologies, etc.38 However, the acceptable degree of consultation and information may be strictly limited. The employer view is that the decision to introduce new technology remains and must remain with management alone. The Belgian Federation of Employers insists on this point. The UNICE statement concurs, adding that all investment decisions must be made by management, with the additional proviso that it is enough to give employees as much information as possible. However, in view of the existing procedures in all European countries, a community-wide uniform regulation of these procedures would be superfluous. 39 Employers' associations also see a role for governments: to alleviate the uncertainty mentioned above and brought about by new technologies. However, this role should not take the shape of additional regulations at the national level, but rather be that of a facilitater.40 The government should provide specific programmes to "improve the political conditions which enable companies to consistently realise technological innovations." 41 This stance is of course very much in step with the traditional attitude of employers' organisations in domains other than new technology, where they shy away from government intervention. The preferred place for government action, besides providing for freedom of action of enterprises, is in domains out of the reach of individual enterprises, such as education and training in the field of new technologies, setting up the necessary infrastructure, etc.

Flexibility One particular theme is of special importance in most position statements of employers' associations. It is sometimes clearly expressed, sometimes implicit. It appears to be a consequence of the potential opened up by new technologies in the domain of production and services. As we emphasised when discussing the employers' responses to new technology at the micro-level, what the new technology does, in a very technical sense, is reintroduce some degree of flexibility in the production process. It enables a compromise between mass production and nonstandardised made-to-order products. It brings the manufacturer much closer to his market. However, flexibility must be thought of in terms of strength of a chain. A production unit is no more flexible than the least flexible of the production factors. In other words, flexible factories, to be fully efficient, imply flexible labour. This point was very forcefully put by Dr. E. G. Erdmann, Director-General of the Confederation of German Employers' Associations:42 the chief priority for the future is to opt for a large degree of flexibility in working life. Enterprises should be given a greater degree of freedom to allow them to react to market signs in their personnel policy. A key element of that freedom is to reintroduce flexibility into the labour market.

Employers' Response to Technological Change

39

Labour market flexibility must run parallel with the flexibility introduced within the production process by new technologies. To take only one very obvious example to underline our point, a robotised factory operating 24 hours out of 24, 365 days per year certainly needs a different type of workforce than that of a classical factory. But it also needs the work to be focused on very different types of jobs and shift patterns. In the same way, CIM may allow a factory to work indifferently at 60 per cent, or 100 per cent or 110 per cent of capacity without many idle fixed costs, but its labour costs should be adaptable to market demand as well. This implies flexibility of employment and/or wage flexibility as well. This point was also clearly illustrated in France by the 1984 negotiations between employers' associations and four of the five main union confederations. The link between technological change and labour market flexibility43 was self-evident from the agreement which was reached on easing the legal constraints on dismissal, duration of work and atypical employment. The results of the negotiations were later rejected by the union rank and file. However, the employers' federation's position was clear. A final remark is necessary here. The need for flexibility has consequences on personnel management at company level. We have already noted that technology has no overriding command over organisation of work. Within the same technology, several kinds of distribution of labour and organisation of work are possible, as has been demonstrated already by Gallic, Sellier44 et al. Sellier outlines that two opposite trends are noticeable when new technologies are introduced into the plant: one towards an increased participation of employees, the other towards increased specialisation and division of labour. 45 However, if we bear in mind that the goal is increased flexibility (which is largely incompatible with bureaucratic rules) and that such flexibility can be combined with the more participative approach needed for successful introduction and operation of new technologies, as described above, we can conclude that new technologies may well have a considerable impact on management of human resources. Not only does the quantity of employees need to be flexible, but also the core of existing personnel needs to be flexible in terms of job mobility and adaptability in skills. This adaptability demands the consent of the employees. Here again, there is an impact on the style of management. In conclusion, it should be noted that two contradictory imperatives shape management: firstly the flexibility to manage its labour force in terms of volume apparent at micro-level, and for that purpose to use all the classical tools for manpower adjustment: mandatory overtime, lay-offs, temporary work, short-term employment contracts, part-time work, increase in shift work to amortise equipment, etc. These tools are typically conducive to classical hierarchical and Taylorian management and to an adversarial relationship with the union. Secondly, there is the need to nurture a participative attitude from employees in the face of constraints at micro-level. This is to secure satisfactory implementation and running of highly complex and technical plants and equipment, possible only with the co-operation of the operators. In those technology-intensive environments, a large number of jobs are too complex to be clearly outlined and designed in advance by management and filled by operators who have just to obey instructions. It is almost impossible

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for most descriptions of the new jobs to define in advance what actions are, and will be likely to be, required from the job holder. Furthermore, individual initiative is required to carry out the jobs efficiently. But if co-operation is necessary, management cannot simply demand and obtain a show of co-operation and initiative. Co-operation and initiative must be voluntary. Therefore, the use of participative management in areas such as job enrichment, quality circles, participation in decision-making, etc. is also necessary. Clearly the two imperatives on human resource management are in opposition. The key to the success of the employers' response to new technology may well lie in finding ways to manage that contradiction. Attention should be paid to new experiments such as the general monthly organisation of manpower in the new Saturn plant with the division of employees in a "core" category and a secondary one. Consequences on the segmentation of the labour market could also be forecast.

Notes * The author wishes to acknowledge the invaluable help he has received from Mr. J. J. Oechslin, former chairman of the Governing Body of the ILO and from his colleague, Arnould De Meyer, Professor of production management at INSEAD. 1 OECD External Relations Divisions, Industrial Relations and Technological Change: Report on a Joint Meeting of Management and Trade Union Experts, Paris, April 1985, p.l. 2 Interview of Y. Farge, Le Figaro, 2 7 - 2 8 April 1985. 3 ibid. 4 U. Briefs — Projet, Paris, May —June 1981. 5 D. S. Appleton, "The State of CIM," Datamation, 15 Dec. 1984, pp. 6 6 - 7 2 . 6 The Strategic Benefits of Computer Integrated Manufacturing, Arthur D. Little, consulting firm, undated. 7 ibid., p. 23. 8 Japan Productivity Centre: In Search of a New Industrial Relations Model, Tokyo: Asian Productivity Organisation, 1985. 9 ibid., p. 67. 10 Piore, M. and Doeringer, P., Internal Labour Markets and Manpower Analysis, Lexington, Mass.: D. C. Heath and Co., 1971, Chapter 6, pp. 119 fT. 11 R. M. Hayes and S. C. Wheelwright: Restoring our Competitive Edge; Competing through Manufacturing, New York: J. Wiley and Sons, 1984, p. 18. 12 J. M.A. Research Institute, Robotisation, its Implications for Management, Chapters 5 and 6. (Internal undated document of the Fuji Corporation) 13 The Japanese definition of robots is more extensive than the US or European one. The Japanese Industrial Robot Association (JIRA) retains as robots both manual manipulators and robots with a fixed sequence of operations which are not easily changed. These two categories are excluded from the western definition of robots. 14 Japan Productivity Centre, op. cit., pp. 62 ff. 15 ibid., p. 78. 16 Arthur D. Little, op. cit. 17 Source: INSEAD's Europe Manufacturing Futures Survey, Fontainebleau, undated. 18 ibid. 19 ibid.; and B. Gold "CIM Sets New Rules for Production," Harvard Business Review, Nov.-Dec. 1982.

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41

20 See for instance, for a very interesting comparative study of Japanese and French plants in Brazil: Hirata, Hélène, "Internationalisation du capital, techniques de production et division sociale du travail," Revue critique de l'Economie Politique, No. 14, janvier—mars 1981. 21 See A. d'Iribarne: "Nouvelles technologies, qualification, efficience productive et sortie de crise," in: Commissariat Général au Plan, C. O. A. Des., Changements techniques et qualification, vers une nouvelle productivité, Paris: La Documentation Française, 1984, pp. 8 — 10. See also D. Joswicki et J. Cavallero, "Progrès Technologiques, Organisation du Travail et Objectifs Patronaux," Cahiers du Communisme, Feb. 1983: 58 — 66. 22 W. Bodmer, "Réflexions sur l'application de la micro-électronique," Bulletin de Documentation Economique, 2 juillet 1983, SDES, Genève, p. 15. 23 F. J. Kador, Contribution to the Japan-Europe Industrial Symposium, 4 — 6 Dec. 1983, Copenhagen, p. 2. 24 Interview of Mr. Lindner in ILO Information Vol. 20, No. 2, May 1984, p. 4. 25 Project of Position Statement of UNICE on Technological Change and Social Mutation, ILO Information, Vol. 25, No. 2, May 1985. 26 "Questions soulevées par le Comité Consultatif Economique et Industriel auprès de l'OCDE (BIAC)," Politique d'Information d'Informatique et de Communication, OCDE, Paris, 1982. 27 B. Bachelot, The Impact of Micro-Electronisation on Work, the Position of Management in France, paper prepared for the International Symposium on Micro-Electronics and Labour, Tokyo, Oct. 1985. 28 Selig Perlman, The Theory of the Labour Movement, New York: The MacMillan Co., 1928, particularly p. 241. 29 W. Bodmer, op. cit., pp. 9 - 1 0 . 30 ibid., p. 19. 31 ibid., pp. 1 0 - 1 1 . 32 op. cit. 33 Position quoted in "New Technology and Social Change", Social Europe, No. 3/84: 111. The text refers to Anders Werhneil. Verlag van een discussie project, Den Haag: Nederlands Christeligh Werkgeversverbond, 1983. 34 L'informatisation des entreprises françaises dans les années 1980, présentation du Rapport du groupe de travail de l'Institut de l'Entreprise SARRE, novembre 1980, Paris (unpublished). 35 See footnote 24. 36 Bachelot, cit. 37 ILO, Neuvième question à l'ordre du jour, Rapport de la Commission consultative de la Technologie sur sa première session, Genève, 15 — 19 avril 1985. 38 E. G. Erdmann, Quelles conditions au renouveau des entreprises en Europe, Exposé présenté devant le Comité National de l'Organisation Française le 12 juin 1985. 39 UNICE Statement, op. cit. (see Note 25). 40 BIAC, op. cit. (see Note 26). 41 F. J. Kador, op. cit. 42 Erdmann, op. cit. 43 A good summary of "the Position of the French Employers' Federation" is given in Bachelot, op. cit. For a more detailed analysis including an analysis of wage rigidities, see La Flexibilité de l'Emploi, notes et documents No. 161, CNPF, Paris mars 1985. 44 See for instance D. Gallie, "Automatisation et légitimité de l'entreprise capitaliste," Sociologie du Travail, no. 3,1977, and M. Maurice, F. Sellier and J. Silvestre, La production de la hiérarchie dans l'entreprise, Recherche d'un effet sociétal, Comparaison FranceAllemagne. CORDES, Paris (unpublished) Oct. 1977 and a shortened version in Revue Française de Sociologie, XX, 1979, pp. 331—365. 45 F. Sellier, L'impact des nouvelles technologies sur l'action syndicale et le système français de relations industrielles, Cest, Aix-en-Provence: CNRS, 1984, p. 69.

Technological Change in the United States: Unions and Employers in a New Era Everett M.

Kassalow

Introduction The problem of handling technological change in collective bargaining is an old one for unions and employers. In the following survey, we have, however, concentrated on some of the newer, recent trends in the response of unions and employers to technological change in the United States. The essay first sketches the impact of the new technology on jobs, employment and work, and the general reaction of United States unions to this impact. It then turns to specific changes in collective bargaining which have resulted from this new wave of technological change.

Viewing the impact of recent and prospective technological change upon the nation's economy and its labor markets, the principal American labor confederation, the AFL-CIO has concluded, that "The United States — indeed every industrialized nation — is undergoing a scientific, technological, economic revolution every bit as significant as the industrial revolution of the nineteenth century." 1 The AFLCIO has recently established a standing committee one of whose tasks is to help remodel the labor Federation's policies and outlook to meet the challenge of this revolution. This new "wave" of technological change is having a powerful influence on the world of employment and work. In combination with other economic forces it continues to reduce the share of employment devoted to goods production, while expanding the share of the services. This translates into more white-collar employees and a declining proportion of blue-collars (or manual workers). In manufacturing, for example, the share of manual operatives fell from 80% in 1960 to 68% in 1982. The white-collar manufacturing force rose from 20% to 32%. As a result of technological and related change, among the white-collar groups in manufacturing the employment prospects for engineers and technicians appear to be particularly strong. Indeed, for technicians the outlook seems outstanding. One major forecast suggests that, as computers take over more operations in factories, and "equipment interfaces ... solve some of the problems of applications engineering," sooner or later there may be "some substitution of technician jobs for engineering jobs." It concludes that technicians "are the new skilled workers of the economy." 2 Beyond manufacturing, forecasters see a continuing growth in the share of the service sectors of the United States economy. Goods production employment has fallen steadily in post-war America to around 25% of overall employment, and the

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combined effects of technology and shifts in consumer taste promise to extend this trend. The very nature of work itself is changing under the impact of some of the new technology. As one writer recently put it, earlier technological change "saw machines replacing manual labor and human manipulations," with the worker shifting his role to "an emphasis on controlling the appartus to perform its function." However, "the new era is typified by artificial intelligence built around the computer," and it is replacing many human operations "by permitting an infinite number of functions to be carried on with no direct human intervention." 3 All of this has great repercussions on labor and management attitudes and relations. However, it is useful to recognize that it does not mean that overnight, or even in a decade, millions and millions of employees will be transformed into high tech, computer specialists of one type or another. A recent report of the United States Bureau of Labor Statistics, for instance, projects on the one hand that computer programmers, computer systems analysts, data processing equipment repairers and computer operators will be among the fastest growing occupations in the next decade; but in absolute numbers more mundane service occupations like those of cashier, janitor, truck drivers, waiters and waitresses will each add almost twice as many jobs as almost any of these high-tech positions (see Table 1). The prospect for the growth of an enormous number of low paid service workers deeply troubles the AFL-CIO. It fears that computers and robots will take over "more and more functions in the work force," and there is the likelihood of the creation of a "two-tier work force." This would be a job structure of relatively Table 1: Occupations with Largest and Fastest Projected Employment Growth 1984 — 1995 Occupation Largest Job Growth

% Growth 1984-85

556 452 443 428 424 369 348 343

29.8% 32.8 15.1 17.2 26.1 29.6 28.9 12.6

51 245 212 79 28 206 202 111

97.5% 71.7 68.7 62.0 56.2 52.8 50.7 46.7

1984-1995

Cashiers Registered Nurses Janitors and Cleaners Truck Drivers Waiters and Waitresses Wholesale Trade Sales Persons Nursing Aides, Orderlies, etc. Sales Persons, Retail Fastest Job Growth

Employment Growth (000s)

1984-1995

Paralegal Personnel Computer Programmers Computer Systems Analysts (EDP) Medical Assistants Data Processing Equipment Repairers Electrical and Electronic Engineers Electrical and Electronic Technicians and Engineers Computer Operators

Source: United States Bureau of Labor Statistics, Monthly Labor Review, November, 1985.

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"few executives, scientists, engineers, professionals and managers," paid high salaries on top. On the bottom would be a mass of "low paid workers ... [doing] simple low skill jobs, dull, routine, high-turnover jobs ... in a poor work environment." In between will be fewer and fewer well paid "skilled, semi-skilled and craft production and maintenance jobs," which traditionally have offered "opportunity and mobility" to the masses of employees who begin in "entry level jobs." 4 All of this is additionally complicated by the fact that most of the private service jobs which hold the prospect of greatest employment expansion in the years ahead are poorly unionized and often poorly paid. This fear of a two-tier work force is by no means shared by many economists. One survey by the United States Bureau of Labor Statistics (BLS), for instance, concludes that while "some trends in the industrial and occupational structure of employment could cause a degree of earnings bipolarization," a variety of factors influence the "occupational structure" and "earnings of workers in specific occupations," and an analysis of "available data" indicates no "bipolarization over the 1973 — 82 period." Furthermore, BLS argues, according to its "projections of employment by occupation, bipolarization is not likely to occur between 1982 and 1995."5 From an industrial relations viewpoint it does seem fairly clear that the occupations in which United States unions have their greatest strength are those where employment prospects are weak, while those where unions tend to be weak are projected for strong growth. Thus, in 1980 unionism was about 40% among operatives (this group includes semi-skilled workers in manufacturing and elsewhere, as well as truck drivers) and 33% among laborers, while the unionization rates were only 22.7% for professionals and technicals and 16% for clericals, the more rapidly growing occupations. 6 For the time being then, the AFL-CIO faces this new technological revolution from a somewhat disadvantaged position, and with a somewhat pessimistic view of its consequences. The AFL-CIO has recently begun to respond more forcefully and directly to the organizing challenge posed by the technological and occupational shifts of recent decades.7

Technological Change, a Possible Threat to Unionism It is useful to remind foreign industrial relations students and practitioners, that unlike the case in many countries, and notably in most of Western Europe, where collective agreements are negotiated on an industry wide level (either for a large region or the whole country), in the United States the collective agreement is usually on a company or plant level. When, therefore, new technology helps spawn an entirely new plant, it is quite possible this new plant may operate on a non-union basis, and pose a threat to other unionized operations. Generally speaking, most United States employers today strongly resist unionization when they open new business establishments. Indeed, some United States businesses have a clear-cut policy of seeking alternative dual-sourcing, non-unionized plants, i. e. a non-union alternative to an already unionized plant. A few unions in basic metal production (including steel and aluminium) and in automobiles have succeeded in inserting

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into their collective agreements, with large companies, provisions to make it easy for these unions to gain recognition at new plants of these companies; but these are very exceptional cases. As the electronics industry, for example, has expanded, the rate of unionization has declined, as most of the industry's companies have succeeded in defeating union efforts to gain recognition in new facilities. Even within establishments where unions are already recognized, management may take the position when a major technological change occurs, that the resulting new jobs are not covered by the existing collective agreement, and seek to staff them on a non-union basis. The Communications Workers union (CWA) reports such a case when certain skilled operations were computerized at a plant of the American Telephone and Telegraph Co. (AT&T). The company sought to remove some part of the jobs from the unit represented by the union "by describing" them "as a management control function." It also refused to train existing members of the union's "bargaining unit, thus depriving the unit and the unionized employees of both knowledge and work." 8 The union, however, made a strong grievance on this issue and eventually won its case in arbitration. This threat which technology can, and often does, pose to a union's very existence in the United States must be kept in mind, as we sketch below some of the specific problems and developments which technological change has brought to collective bargaining in the United States in recent years. It certainly colors the union response to technological change.

Factors Influencing Union Attitudes Toward Technological Change There is a long standing body of conventional wisdom with regard to the attitude of American unions toward technological change. In a general way it has usually been contended that United States unions do not resist technological change, but generally prefer to negotiate on its consequences, and for a share of its benefits. Beyond this, it is held that where a company is expanding employment a union is more likely to be immediately receptive to technological change. If competition is severe, a union may have no alternative but to accept technological change promptly to help its firm survive. Craft unions, it has further been argued, in the past were more likely to resist technological change, for fear the resulting new organization of work would reduce or eliminate the need for their particular skills. On the other, it has been argued that for industrial unions, "technological changes affect such a small fraction of their membership," and, indeed, may help other parts of it, that they are "likely to pursue a policy of adjustment to technological change," rather than resist it. 9 While the foregoing conventional wisdom about industrial unions has prevailed for a long period of time, new developments and problems call for modifying this wisdom somewhat. In recent years some ingrained industrial union positions have bumped head on against certain needs of new technology, as well as against the problem of meeting growing foreign competition.

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The New Technology and Work Organization: The Industrial Relations Context Some of the new technology introduced into older, well unionized industries has collided with long established job practices and wage classifications. Long before unionism was established in most major United States industries and factories, management, in keeping with engineering and organization practices laid down by Frederic Taylor and others, had subdivided tasks into almost minute positions with a minimum of scope and responsibility left to workers. Related to these highly subdivided jobs were job classifications and wages. This seemed to be the essence of successful, modern mass production. (Whether it ever truly was, can be debated elsewhere!) When industrial unions came on the scene in the 1930s and 1940s, they were neither able (or strong enough) nor, perhaps, very anxious to overthrow these arrangements. (The unions certainly, however, criticized and helped reduce some of the pace of the Tayloristic system in many plants and industries.) For the most part they built walls of protection around these many jobs and wage classifications, controlling access to them by seniority and other rules, negotiating rates for each job, etc. Today, in part as a result of the introduction of new technology, managers often find these tight job boundaries constraining and less useful for maximum utilization of new technology. Additionally, they often find need for greater input and initiative from employees if the technology is to work well. (There is also realization, perhaps, that the Tayloristic methods were never truly the best way to utilize human resources in production.) As they seek more flexible utilization of human resources, however, employers may come up against the protections and controls which union have built into the old system to safeguard employees. Unions and their members are frequently suspicious that proposals for more flexible deployment of workers will lead to the "speed up" or "stretch-out," common enough in the past, or to layoffs and unemployment. In a recent joint venture of General Motors and Toyota in a California plant — formerly owned by GM and formerly covered by a collective agreement with the United Automobile Workers — just such an issue took months to resolve. Toyota, which had the prime, direct operating managerial responsibility, at first refused to recognize the UAW at the reopened establishment; but it clearly became evident the company's greatest interest was in obtaining flexibility of deployment of the work force, something which it characteristically enjoyed in the Japanese plants. This issue was finally resolved when in return for recognition, the UAW accepted a collective agreement which included only four separate classifications, three of which were for maintenance, with only one production job classification. This is in contrast with typical practice at Unites States auto plants where there may be as many as 100 separate, production worker classifications. (Of course not all the pressure for change, to repeat, comes from new technology. It is impossible to separate these pressures from those stemming from new — for many U. S. companies — organizational insights.) While local union leaders at the California plant were at first cautious and uneasy about this new agreement, more recent reports suggest they are working to the mutual satisfaction of the union and management. 10

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In planning an entirely new small car, SATURN, for future production, General Motors went beyond this step, and enlisted the UAW's cooperation even in its technical drafting stages. Before the plant for this new car was under construction, GM and UAW agreed the latter's members would "be the primary source for recruitment" at the eventual 6,000—member work force. "Permanent job security" except in the case of "unforeseen or catastrophic events or severe economic conditions," is to be guaranteed to these employees, who will be on a salaried basis (quite distinct from UAW employees elsewhere in General Motors who typically are on an hourly basis). There will be one production classification and three to four skilled classifications, which would assure the company of great flexibility in deploying the work force on what is expected to be advanced, state of the art technology. The union is to be a "full partner" in all decision making, and on the shop floor wide autonomy and control is planned for workers." Some opposition to the SATURN agreement has been expressed by groups within the union which fear excessive concessions have been made to management in controlling and deploying the work force. Right wing critics, outside the industry, charge that the agreement is, in effect, a closed shop, one which violates employees' rights to choose or reject being represented by a union, once the plant is fully underway.12 It is, in any event, mutually agreed by GM and UAW that the SATURN agreement is separate from the remainder of the company's car operations which are largely covered by a separate master agreement with the UAW. (Indeed to launch the SATURN project GM set up a new separate corporation.) But it is difficult to believe that if the new methods of production and manning on which SATURN and the California GM-Toyota plants are based prove successful, they will not spill over into the industry generally. Actually, modification of the old job and classification schemes has been occurring on a piece-meal basis in a number of individual GM and Ford plants, and in other industries. On the other hand, when the Chrysler Company sought formal, sweeping changes in its job classification system in negotiations in 1985, it was turned down; but the union did agree to a "pilot program" under which classifications would be reduced in a few plants in return for certain concessions and protections from the company. The process of change does seem to be grinding inexorably, not only as regards technology, but also as regards union-management practices on which it impacts. In a plant of the LTV Co. in Cleveland (this is a joint venture with a Japanese firm), the new electrogalvanizing line to turn out rust proof steel, by agreement between company and union, will "change work practices from customs that have prevailed [in the steel industry] since the 1930s...". The changes are so important, that one source feels these new arrangements, under which steel workers "largely manage themselves" and earn salaries instead of wages, could "serve as a model for much-needed work reforms throughout the beleaguered industry." The new plan divides workers "into four skill levels instead of rigid job classes," and they rotate from job to job. Workers also have a major voice in hiring and firing.13 In recently (1987) concluded separate new contract negotiations between the UAW and the Ford Motor Company and the General Motors Company, the parties included statements in favor of more flexible work arrangements. Contract nego-

Technological Change in the United States:Unions and Employers in a New Era

49

tiations (separate) between the steelworkers union and most of the major steel companies in 1986 also set forth provisions conceding greater flexibility to management in deploying the work force. Instances of major change in work rules are also occurring in other companies, unionized and non-unionized. But it is useful to keep in mind that the new, more flexible type of work arrangements are far from being the rule in industry. Moreover, it is still far from clear that most traditional, authoritarian-style managements are prepared to share responsibility on any large scale with the work force. Resistance to these new styles and forms is often especially keen among middle and lower managers, who feel threatened by such changes. As for the work force, here too there is as yet no clear reading. Some past studies seemed to indicate that employees prefer jobs with greater variety and responsibility.14 But one recent student of the subject finds that earlier, empirical studies which argued workers prefer "enriched" jobs, overlooked the self-selection process involved among employees who volunteered for such enriched jobs. He adds, "it is not surprising that ... workers who ask to be reassigned to more complex jobs prefer the jobs they requested." After studying some 2,900, semi-skilled electronics workers, Andrew Weiss insists that there is a positive correlation between higher quit rates, his measure of dissatisfaction in this context, and those employees who were randomly assigned to more "complex" jobs. He concludes, "The evidence ... suggests that if job enrichment takes the form of increasing the complexity of semiskilled production jobs (job enlargement), the job satisfaction of workers is likely to fall." 15 This new research gives some pause to those who have been enthusiastically promoting job reorganization as all things to all men. However, since Weiss' research is limited to one firm, and his sole criterion for jobs satisfaction or dissatisfaction seems to be the quit rate, it is a bit strained to make any sweeping claims for the research, as yet. Ranged against the resistances to job change and reorganization are the threats of effective foreign competition and much of the new technology. With regard to the latter, it does appear that as old style mass production gives way to more specialized production, including forms of computerized automation, the need for greater input and control by workers is likely to force new work arrangements in many plants and offices. These developments help account, of course, for management's growing interest in establishing quality circles in the United States.

Union Management Committees for Cooperation on Technology Management's sense that greater input from employees is essential with the new technology is not confined exclusively to the work arrangement issue. In a number of companies more formal arrangements have been established for consultation with the union prior to the installation of new technology. Pressure for such consultation also comes from some unions, for defensive reasons. The 1980 collective agreement between the Communications Workers of America and AT & T established a new joint Technology Change Committee. The agreement states:

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The Company and Union recognize that technological changes in equipment, organization, or methods of operation have a tendency to affect job security and the nature of the work to be performed. The parties, therefore, will attempt to diminish the detrimented effects of any such technological change by creating a joint committee to be known as the Technology Change Committee to oversee problems and recommend solutions of problems in this area... 16

The agreement adds the company will notify the union "at least six months" in advance of major technological changes. Discussions would then ensue on what the impact on employees could be, what alternatives could be offered to them, as, moving to another job in the same or other localities, termination allowance, early retirement, as well as company training for other assignments.17 Somewhat similar language calling for consultation on technological change is incorporated in the agreements between the General Motors Corporation — UAW master agreement and the master agreement covering the same union and the Ford Motor Company. Conversations with union officials suggest no great revolutionary consequences have flowed from these new consultation procedures; but officials of both unions (CWA and UAW) do agree that as the years pass, the meetings under these clauses are increasingly helpful. Of course many employers in the past (and today) informally consult with their unions when major technological change is contemplated. But the negotiation of formal arrangements in several major firms may mark an important addition to the developing structure of industrial relations. This could be true, especially if it is placed in the context of new departures like SATURN and the LTV mill in Cleveland described above, where the unions (and employees) are being consulted from the ground up on the plant lay-out, the installation of the machinery, etc.

Advance Notice on Technological Change and Plant Closings More routine in character have been union management agreement clauses assuring unions of advance notice of impending technological change or of plant closings. Surveys seem to indicate that the number of such clauses in collective agreements is increasing (though agreements including them are still clearly in the minority), probably as a result of the heightened sensitivity of unions to technological change. Typical of the collective agreement clauses providing the union notice of technological change is the following: "The Company shall notify the union before the introduction of any technological change ... and shall arrange to discuss with the union the effect of such change on employees covered by this Agreement." 18 An example of a contract clause providing notice prior to a company's closing a whole or major part of a plant is the following: "The Company shall give notice in writing to the union of the closing of a plant or department at least six months prior to such closing."19 Not satisfied with what can be accomplished only through collective bargaining, the union movement is also pushing for the enactment of federal legislation to help regulate plant closings and, in fact, legislation requiring 60 days' notice in case of collective dismissals for economic reasons (the Worker Adjustment and Retraining Act) was adopted in August 1988.

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Greater Voice for Unions in Investment Decisions Related to the changes in technology, and the process of rationalization going on in much of American industry have been the efforts of a few unions to gain some influence over companies' investment decisions. Both the United Food and Commercial Workers (UFCW) and the United Steelworkers have been confronted with declining companies in the meat packing and basic steel industries. As plants have been closed down in whole or in part, the unions have had to make wage or other concessions to these companies to help keep them afloat. In return for concessions in its agreement with the Armour (meat packing) Company, in addition to obtaining a moratorium on plant shutdowns, the UFCW also gained the right to receive a copy of the company's "capital investment plan for the next five years," and the company's committment "to reveal its actual expenditures each year." 20 In its 1983 agreement with leading basic steel companies the Steelworkers received a pledge from the companies, to "apply any savings" made as a result of the union's economic concessions to "the needs of the existing facilities covered by" the collective agreements, "such as capital equipment needed to modernize" or "to preserve the working capital needs of such plants." The steel companies are forbidden from investing in other [non-steel] segments of their business, and they must "provide annually adequate information to the Union" on the savings made and related capital expenditures.21 These are rather new areas into which unions have pushed the collective bargaining process. It is not yet clear how far reaching may be their consequences. Without question, however, is the fact that many Unites States companies are now providing a much greater flow of information to their employees and unions than has been true in the past. In itself this is likely to have important consequences for industrial relations developments.

Technological Change and Union Management Approaches to Training Coping with the new technology (as well as with other forces such as foreign competition), seems to be leading unions and employers into new training programs. Craft unions in the United States have a long tradition of participating in training programs designed to prepare the work force for their industries. Joint (between unions and employers) apprenticeship programs in the skilled trades go well back in United States industrial history. But until recent years, most major industrial unions did not participate deeply with their employers in matters of training and retraining (except where they, too, were involved in joint apprenticeship programs to trained skilled maintenance employees). Generally, in big industry, training was the province of the employer. Several industrial unions have, however, recently begun to change their positions. As technological change has accelerated, and as its impact has spread, a number of unions, craft and industrial, have moved to new roles in training matterns. The Graphic Arts International Union, a craft union resulting from the merger of

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previously independent printing unions, took the initiative, some years back, to establish a series of training centers around the country. In these centers Graphic Arts union members have the opportunity to be trained on the newest printing technology (often obtained with the assistance of employers who share the union's interest in upgrading the skills of their employees).22 But the newest changes are coming on the industrial union side. These unions are looking for ways and means of upgrading the skills of their members to match the jobs stemming from the new technology. In other cases they see training as a means of helping employees displaced by technology (and other forces) to find new jobs. The Communications Workers several years ago negotiated programs in their collective agreement with ATT, which, recognizing the "environment of fast paced technological" change, provide not only for "job specific training" for employees, but also for more generic training to assist in workers' "personal career development" and to fill "job vacancies anticipated by the" company. 23 The collective agreement between the Ford Motor Company and the United Automobile Workers signed in 1982, and then further strengthened in their 1984 and 1987 agreements, establishes a multi-million dollar Employee Development and Training Program, in the form of a separate, new jointly established corporation, financed by the company. The purpose of the company is to assist workers laid off for economic reasons as well as the result of technological change. The program is jointly governed through a National Development Training Center. Personal counselling, basic literary and communication skills (where necessary), computer training, targeted training for specific occupations and professions (often provided by outside professionals hired from their respective fields — paid for out of these funds), etc. are all part of this large effort. The Center is also developing wide ranging college and university opportunities, which "will provide tailored college-level business programs to meet" the career needs of employees.24 Similar agreements have been negotiated between the UAW and General Motors. In 1986 CWA and ATT followed this same route and established a separate new corporation (The Alliance for Progress), under joint management. In all of these cases the emphasis is on employee career training for jobs outside of their immediate companies as well as within it. While other companies and unions have not taken similar steps to establish separate new training corporations, greater emphasis on training in collective bargaining agreements is more and more common in the United States.

Technological Change, New Income and Job Protection Plans Over several decades unions and employers have worked out a variety of programs to afford some protection to employees displaced by advancing technology (and other economic factors). These include: the right to transfer to other jobs (including, in some cases, jobs in other locations of the same company, and in these instances collective agreements often provide some help from the employer with moving expenses); severance pay when termination is final; supplementary insurance pay-

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ments (especially in the steel, auto, rubber, agricultural machinery and glass making industries); early retirement, etc. In one or two industries (especially in parts of longshoring) unions and employers have negotiated to establish a special fund financed by employer payments, to handle displaced employees. In a small number of companies unions have established the principle, in collective bargaining agreements, that no one is to be laid off as a result of technological change, with attrition reducing the work force as improved technology reduces the firm's manpower needs. By no means do all United States collective agreements contain all these provisions, and some contain few or even none of these. But the foregoing paragraphs are intended to illustrate the ways in which unions and employers have tried to deal with the displacement problem. Of recent interest is the special "Job Bank" established in the 1984 collective agreements by the General Motors and Ford corporations and United Automobile Workers. This is designed to protect workers against job losses due to technology, outsourcing (contracting out) of production, negotiated productivity improvements, or the movement of work due to transfer or consolidation of work in the company (usually to a more productive facility).25 (Layoffs due to a reduction in production volume were not covered under this program.) Any employee who has one year or more seniority who would be laid off as a result of any one of these causes was protected for the life of the 1984 agreement, which expired in 1987, and through the following agreement which normally would expire in 1990. Displaced employees would first exercise their seniority "bumping" rights, but those still displaced after this would be placed in an "Employee Development Bank." In that Bank they would receive their regular pay. They could be assigned, by a joint UAW-GM Job Security Committee: to a training program; as "a replacement to facilitate the training of another worker;" to a job at another GM plant; to a job outside the union-management unit, including non-traditional jobs (for example community work); etc. Relocation allowances were "available for permanent transfers." Employees in the bank would remain on the payroll and regularly report to work until reassigned. Funding for the program was set at a cap of around $1 billion. A critic of the programs commented, that "In essence GM has paid a billion for an unlimited license to automate and outsource." 26 In 1987 these job security provisions were further reinforced by agreements providing there were to be no layoffs in the companies except for serious cyclical shifts in the auto markets.

New Technology and Employee Health and Personal Security Problems in Collective Bargaining The introduction of some new automated equipment in offices and plants has provoked union concern that new devices may imperil employees' health. Particular anxiety has been expressed about the greater stress experienced by secretaries and other personnel who spend long periods before video display terminals (VDTs). Several unions have formulated programs to protect employees from any hazards stemming from new advanced equipment in the work place. These call for trans-

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ferring pregnant employees from hazardous jobs involving prolonged work on video display terminals, better protection against low frequency radiation, periodic eye examinations for employees working on VDTs, payment for optical equipment prescribed for work on VDTs, no use of VDTs during the final work hour to allow employees' to adjust to normal light, etc.27 A few unions, especially in the white-collar field, have succeeded in negotiating agreements embodying these kinds of protections for employees. The Service Employees Union gained such an agreement with one office of the Equitable Life Insurance Co. in 1984. It included "extra break time," as well as "The right to transfer to non-VDT work if they are pregnant," for VDT operators. The agreement also calls for safety equipment such as "glare-reduction devices, detachable keyboards," etc.28 One can anticipate a gradual growth of these kinds of provisions in collective agreements to deal with parts of the new technology, although there is as yet no wide-spread agreement on the health effects of VDTs and other similar devices. Finally, there is some growing concern about the threat which some of the new technology presents to the individual rights of workers. The use of remote control monitoring of workers and their performance, from centralized locations, has been protested by the Communications Workers (CWA). In a somewhat similar vein the International Union of Electronic Workers (IUE) has warned its local unions to take measures to "prohibit the surveillance of individual workers by television cameras," adding, that "cameras connected to robots to help perform their work must be limited to that function." 29 The foregoing are relatively new bargaining areas for United States unions, but here, too, as in the case of safety and health issues, one can anticipate increased bargaining demands and activity in the years ahead, as the new technology spreads across the economy. New technological advances are already having a strong impact upon the United States industrial relations system, and the outlook is for more change and impact. Some serious questions remain about the broad income and employment consequences of this impact, especially in the years immediately ahead. These large questions aside, within the main line of union-employer relationships, there is some evidence that the kinds of initiatives that have already been brought to bear in particular cases in recent years (such as we have described above), if generalized, could yield a framework in which labor and management, with some help from government, can cope with the great technological changes taking place. The displacing impact of mounting world competition from abroad, however, will continue to be a threat to employee job security in some industries. Moreover, employees are likely to experience greater effects of displacement in some sectors of the private economy where collective bargaining is not established. Notes 1 The quotation is from this new committee's report, see AFL-CIO Committee on the Evolution of Work, The Changing Situation of Workers and Their Unions, Washington, D.C.: February 1985, p. 6.

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2 Office of Technology Assessment, Computerized Manufacturing Automation, Employment, Education and the Work Place, Washington, D. C.: United States Government Printing Office, 1984, p. 122. 3 Ben Fischer, Technology's Impact on the Labor Force, address to Point Park College, October 10, 1985 (mimeo-graphed), p. 1. 4 AFL-CIO Committee on the Evolution of Work, The Future of Work, Washington, D. C.: August 1983, p. 7. 5 Neal H. Rosenthal, "The Shrinking Middle Class: Myth or Reality," Monthly Labor Review, March 1985. Sar Levitan and Peter Carlson also criticize the AFL-CIO conclusions on the prospects of a two-tier labor force in The Eroding Middle Class: A New Idea? Washington, D. C.: Center for Policy Studies, 1984. Generally supportive of the view that the new technology might create a large pool of low level service jobs is Thomas Stanback, see his "Work Force Trends," in The Long Term Impact of Technology on Employment and Unemployment, A National Academy of Engineering Symposium, June 30, 1983, Washington, D.C.: National Academy Press, 1983. 6 U. S. Bureau of Labor Statistics, Earnings and Other Characteristics of Organized Workers, May 1980, Bulletin 2105, Washington, D.C.: United States Government Printing Office, 1981, pp. 9 — 10. A more recent BLS survey of the employment distribution of union members is to be found in Larry Adams, "Changing Employment Patterns of Organized Workers," Monthly Labor Review, February 1985. The union-occupations match-ups in this later survey, however, are less useful for our needs here. 7 At its October 1985 convention, AFL-CIO delegates gave their support to a series of new proposals for membership building that have been advanced by the Federation's Committee on the Evolution of Work. See Daily Labor Report, Washington, D. C.: Bureau of National Affairs, November 1, 1985, pp. A9 —10. The Federation has also proposed a wide ranging series of government measures to help deal with the great structural changes in the economy. See the pamphlets cited in footnotes 1 and 4. 8 George Kohl (staff official of the CWA), in Donald Kennedy, Charles Craypo and Mary Lehman (eds.), Labor and Technology: Union Response to Changing Environments, Pennsylvania State University: Department of Labor Studies, 1982, pp. 67 — 68. Other cases, where new technological work was pulled out from under an existing union-management agreement covering most of a plant, are described by a staff member of the International Machinists union in the same book, pp. 124—129. 9 Summer H. Slighter, J. J. Healy and E. R. Livernash, The Impact of Collective Bargaining on Management, Washington, D. C.: The Brookings Institute, 1962, p. 345. 10 Daily Labor Report, October 3, 1985. 11 Daily Labor Report, July 29, 1985. 12 On opposition to the SATURN agreement within the UAW see The New York Times, October 28, 1985. On right wing opposition see the complaints of the National Right to Work Foundation in Daily Labor Report, August 9, 1985. 13 Business Week, December 23, 1985. 14 For example, Edwin A. Locke and David M. Schweiger, "Participation in Decision Making: One More Look," In Research in Organizational Behavior, Vol. 1, Greenwich, Connecticut: 1979, JAI Press, p. 266, conclude that such employee participation "Usually leads to higher job satisfaction". 15 Andrew Weiss, The Effect of Job Complexity on Job Satisfaction: Evidence from Turnover and Absenteeism, Cambridge, Mass.: National Bureau of Economic Research, No. 1597, 1985. 16 ATT and CWA, Memorandum of Understanding, August 10, 1980, pp. 2 9 - 3 0 . 17 Ibid., p. 31. 18 From the agreement between the International Union of Electrical Radio and Machine Workers and the Ingersoll-Rand Co. (This union recently changed its name to the

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19

20 21 22 23 24 25

26 27 28 29

Everett M. Kassalow International Union of Electronic Workers.) This is quoted from Kevin Murphy, Technological Change Clauses in Collective Bargaining Agreements, Washington, D.C.: Department of Professional Employees, AFL-CIO, 1981, p. 6. Agreements sometimes add that such notices can be waived when the closing is due to "causes beyond the control of the employer." See U. S. Bureau of Labor Statistics, Major Collective Bargaining Agreements: Plant Movement, Interplant Transfer, and Relocation Allowances, Bulletin 1425 — 20, Washington, D. C.: United States Government Printing Office, 1981, pp. 9 - 1 0 . Daily Labor Report, September 29, 1982, p. A-10. United Steelworkers of America, Summary of Basic Steel Settlement, February 23, 1983, p. 6. John Stagg [GAIU Education Director], in Kennedy, Craypo and Lehman (eds.), op. cit., pp. 163 — 164, see Note 8. This union subsequently changed its name to the Graphic Communications International Union. CWA-ATT Memorandum of Understanding, 1983, pp. 1 5 - 1 6 . This description is taken from a series of pamphlets and reports issued by Ford-UAW on the new program, as well as from interviews with some UAW staff officials who are part of the new Center. General Motors and the UAW are operating a similar program. The description here is based primarily on the "UAW-GM Report," September 27, 1984, as reproduced in Daily Labor Report, September 27,1984. Useful summaries and analyses of the 1984 auto contracts are to be found by Howard Young, special assistant to the President of the UAW and Ernest J. Savoie, Director, Labor Relations Planning and Employment, Ford Motor Company, in Labor Law Journal, August 1985. Harley Shaiken of Massachusetts Institute of Technology, as quoted in The Wall Street Journal, September 24, 1984. For a description of the program of the American Newspaper Guild, in this area, see Bureau of National Affairs, VDTs in the Workplace: A Study of Effects on Employment, a BNA Special Report, Washington, D. C.: Bureau of National Affairs, 1984, pp. 34 — 35. The Wall Street Journal, November, 1984. On the CWA experiences see Ronald Straw and Lorel Foged, "Technology and Employment in Telecommunications," The Annals, November 1983, p. 166. The IUE position is outlined in "Resolution No. 61 on Robotization," pressed at the IUE 1980 Convention [mimeographed].

New Technologies and Collective Agreements in the Federal Republic of Germany — The Case of "Rationalisation Protection Agreements" Werner K. Blenk1

I. Introduction New technologies, understood here primarily as innovations in micro-electronics, lead to new products and production processes. While in the free market economy of the Federal Republic there are few limits on the social acceptability of new products, there is some control exercised by the works councils and the unions as regards the interaction of new technologies with the production process. Exploring the reach of control and evaluating its impact is easier when one bears in mind that the introduction of new technologies occurs in three broad stages: they have (a) to be planned and (b) implemented and (c) any quantitative and/or qualitative consequences have to be managed by both sides of industry and sometimes governments. All those steps are socially relevant — and therefore potentially amenable to social control — since they influence directly or indirectly the situation of employees. This is particularly evident at the implementation stage where conditions of work are often dramatically transformed and as regards manpower consequences occuring as labour surplus and/or shortage, as the case may be and it is also true for the planning process which is a vital determinant for subsequent stages. Generally speaking, planning is subject to far less control than implementation and manpower consequences. The demarcation line between control and noncontrol as well as its tightness is not static; it is shifting, influenced by the relative power position of the two sides of industry in the general economic and political situation of the country. While the actors of social control — the unions and the works councils — attempt to penetrate deeper into the decision-making process of the enterprise, trying to reach the planning process and to broaden their influence at the implementation stage, the employers are reluctant to abandon positions on what they view as "economic matters" or "management prerogatives." Against this general background, the rapidity and magnitude of change induces the actors of industrial relations to re-examine their positions in the attainment of their goals. Employers' options, concerned with improving economic performance in the face of stiff international competition, run from an essentially unilateral to a more consensual approach where workers' representatives are associated with new technologies at an early stage. In determining their position they are faced with a real dilemma: on the one hand increased rights of participation for workers' represen-

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tatives as regards new technologies may well be in the enlightened self-interest of employers since the success of innovation depends to no small extent on a responsive and co-operative labour force. On the other hand, there is concern that extended rights of participation on new technologies may entail demands for more participation in all those subjects somehow linked to new technology, and even subjects not linked to new technology. Labour, for its part, is concerned with the potential negative effects of new technologies such as workforce reductions, deskilling, increasing demands on workers and possibilities for comprehensive supervision of employees. It has to choose a position somewhere between rigid job and income maintenance policies, often popular with rank and file, but capable of degenerating into basic power conflicts, and flexible strategies of limited conflict and co-operation which may involve potential long-term benefits for both sides, but which are often fraught with hardship for parts of its membership (and union leaders' political survival). Negative effects of new technologies may go beyond individuals; problem groups, areas and branches emerge, thus forcing governments to define their role somewhere in between intervention and restraint. In the Federal Republic of Germany legal principles are important in industrial relations and "bargaining autonomy" (Tarifautonomie) is a vital principle. Basically it means that workers and employers are responsible for negotiating conditions of work, understood in a broad sense, without government interference. Nevertheless, the Works Constitution Act, 1972, contains a few provisions on negotiations with works councils over new technologies. Paragraph 87, I, 6 and 7 and Paragraph 91 grant co-determination to the extent that new technologies can be used for purposes of supervising employees or affect safety and health. Paragraphs 111 et seq. require consultation of the works council in case of "alterations" which may entail substantial prejudice to the staff, and make a "social plan" obligatory if no reconciliation of interests can be achieved between the employer and the works council.

II. New Technologies and Collective Agreements These scattered provisions, however, do not suffice as a normative base to balance the interests of labour and management in the complex process of innovation and under these circumstances collective agreements and/or plant agreements are the principal options for tackling the problem peacefully. Plant agreements on new technologies are, to say the least, not encouraged by organised labour and employers' associations. Both have an obvious interest that this crucial issue should not escape their sphere of influence by shifting down to the level of the enterprise and the works council: the latter is not a union body but represents all the workers of the enterprise, although in practice, the unions are well represented in the works council. While a few plant agreements exist,2 unions and employer associations have managed to conclude collective agreements for almost all major industries which, when considering the above, have a double function; they underpin technological change normatively and, at the same time, are a shield against loss of

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power. These agreements are not conceived as comprehensive "technology agreements." Rather new technologies have interacted with collective bargaining in three important aspects. First, they encourage the transformation of traditional agreements. During the past decades, microelectronics have, in many branches, contributed to erode the traditional distinction between "head" and "hand" work. A decreasing army of blue-collar workers wield sometimes enormous responsibilities over expensive production processes and materials whereas a number of white-collar functions, which have multiplied in the past, are degenerating into administrative routine jobs. The status differences between "salaried employees" and "workers," privileging the former as regards salaries, conditions of work and social insurance, etc., have become obsolete. Nevertheless, they have been widely maintained, leading to the frustration of blue-collar workers and their unions. In a pioneering agreement in the chemical industry, covering 690,000 workers, a joint pay structure has recently been established for workers and salaried employees3 eliminating former status differences. The new pay system comprises thirteen grades into which employees fall according to their qualifications, experience, independence', responsibility and supervisory or management tasks. With this agreement the two sides of industry have demonstrated an ability to respond to the technologically induced transformation of jobs by restructuring agreements on salary and working time accordingly. They managed to design new job profiles and, at the same time, to preserve the acquired rights of those employees negatively affected by the new grades. In addition to stimulating this difficult structural adaptation of agreements, new technologies have also provoked the re-evaluation of traditional bargaining subjects. The most important instance, which cannot be enlarged here, is working time. Its reduction has commonly been regarded as part of health policy. Nowadays it is primarily an element of employment policy. Parallel to this important development as regards traditional agreements, new qualitative bargaining subjects have arisen and continue to arise, spawning innovative, so-called VDU (visual display units) agreements. At present they only exist for a few industries, such as printing, sugar processing and the private insurance business.4 They concern the implementation stage of new technologies, as discussed before, focussing on conditions of work as they are being influenced by new technologies. They regulate such questions as workplace design, working-time arrangements, work supervision, training and health protection and specify and expand rights of participation for the works council by comparison with the Works Constitution Act. Thirdly, since the late sixties, another technology-related type of agreement has emerged, the so-called "rationalisation protection agreement" which is the main focus of this essay. Following the general pattern of collective agreements in the Federal Republic, they are sometimes regional, sometimes national in character and come as company, branch or sectoral agreements. It is estimated that they cover 10 million workers out of an active workforce of about 22.5 million. 5 The essay will describe and evaluate the protection offered in these agreements. To this effect some of the main features of major agreements of the past thirty years will be broadly analysed. It is, of course, not possible to examine all rights contained therein or to describe in detail the varying scope and content of technology related

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bargaining subjects. It will rather be attempted to indicate the development agreements have taken over time and to identify the position of the actors of industrial relations, considering the various alternatives outlined earlier. This will permit us at the same time to determine how far collective bargaining penetrates into the decision-making process of the enterprise, which would appear a crucial determinant for the state of any industrial relations system.6

III. The Content of Rationalisation Protection Agreements The discussion below follows the formal structure of the agreements, which is very similar for all branches of industry. First, "rationalisation protection measures" are defined and, on the ground thus delineated, various procedural and substantive rights are laid out. As a rule, there are provisions on information, consultation and sometimes co-determination, followed by provisions on job security, retraining, income protection and, if termination of employment is not excluded, on dismissal and severance pay. 1. Definition Rationalisation agreements do not purport to be the overall answer to new technologies. They restrict themselves, as their name indicates, to "rationalisation measures." The definition of this term has considerable practical importance for determining the reach of collective bargaining and its broad or narrow scope reflects the relative power position of both sides of industry. Most definitions combine two major elements. First, 'rationalisation measures' are, with certain differences in detail, described as "changes in work organisation and work and production techniques"7 or "measures of an organisational and technical nature implemented by the employer with a view to improving the profitability of the company."8 In the public service rationalisation measures are "substantial changes of work techniques or work organisation with a view to increase work efficiency ..." 9 It is important to note that only those matters qualify as "rationalisation measures" which contribute to efficiency and profitability. It shows that an agreed function of those agreements is to influence positively the performance and competitiveness of the enterprise. In other words, "rationalisation measures" provoked directly by a decrease in sales do not come within the reach of these agreements.10 As a further consequence, the "profitability" clause would seem to indicate that labour does not follow a rigid job maintenance approach, regardless of economic considerations. The second element of definition is equally revealing. In fact, almost all agreements, with one significant exception referred to later, stipulate that only such measures of an organisational and technical nature are to be considered as "rationalisation protection measures" which lead to "redeployment, downgrading or dismissal of employees."11 In other words only activities which have negative consequences on the volume of employment and the situation of employees are

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considered "rationalisation measures" for the purpose of these agreements. Narrowly interpreted, this approach eliminates all those activities from the ambit of rationalisation agreements which relate to planning and implementation unless negative consequences can already be foreseen at the planning stage. The definitions used in these agreements thus suggest a reactive approach concerned with limiting damage for the labour force which might result from rationalisation measures, perhaps at the expense of a more active role capable of influencing earlier stages. Tentatively speaking, many rationalisation agreements would therefore appear remedial by nature, wedded to ex post control. In vivid contrast to this is a recent technology agreement concluded between IG Metall and Volkswagen. It contains a rather broad definition of new technologies, embracing changes in production processes, work organisation, work processes and work methods, as well as the introduction of information communication and disposition systems and, more significantly, it does not restrict its sphere of application to those measures which have a negative effect on manpower.12 This agreement, which will be referred to throughout this essay represents an important opening, bringing the entire process of introducing new technologies into the focus of bargaining. 2. Rights of Participation of the Works Council Paragraph 111 of the Works Constitution Act provides that in companies that normally have more than twenty employees ... the employer shall inform the works council in full and in good time of any proposed alterations which may entail substantial prejudice to the staff or a large section thereof!13] and consult the works council on the proposed alterations.

In a nutshell the Act requires employers to involve the works council before any decisions are taken; the essential power of decision, however, rests with management. Many rationalisation agreements have gone beyond the legal standard. First, some agreements give more precision and sometimes scope to para. I l l and secondly, in a few areas, these rights have been transformed into co-determination rights proper. This needs some explanation. Early agreements merely paraphrased legal requirements. The 1968 agreement for the metal industry, for example, stipulates that the employer has to inform and consult the works council as soon as he can anticipate that his planning has personnel and social consequences.14 The agreement for the banking industry is already more specific and stipulates that rationalisation measures have to be disclosed at a stage when the results of consultations with staff representatives can still be taken into account.15 While this is still essentially an interpretation of the statutory rights quoted above, it nevertheless heralds a rather active role of the works council. The agreement for the printing industry is couched in similar terms when it states as the aim of consultations, "to put together in common a plan to avoid social hardships."16 Other agreements go further and detail the periodicity of information. For example, the agreement for the metal industries in Nordwürttemberg/Nordbaden stipulates that the works council should be informed about rationalisation plans "at regular quarterly intervals."17 In addition, most agreements

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apply to all enterprises and not only to those with at least 20 employees, as stipulated in the Works Constitution Act, 1972. These information and extended information rights apply to early stages of the introduction of new technologies, but the actual influence they grant is limited. They can be found in virtually all major agreements covering metals, chemicals, banking, and the public service18. There are, however, a few agreements which go beyond information and provide for very substantial rights at the planning and implementing stage. For example, the works council in the cigarette industry has a very strong position. The agreement provides that "rationalisation measures have to be discussed with the works council. If management and works council cannot agree on a planned measure it will be introduced on an experimental basis for up to eight weeks after which further consultations have to be undertaken with the works council. In case these fail, the works council can request an independent expert's opinion. If this does not permit an agreement, then a conciliation committee will be set up, whose decision is binding." 19 A similar approach is taken by the North Rhine Westphalian Regional Development Corporation. Under certain circumstances a joint planning committee on rationalisation matters has to be established, composed of two management and two works council representatives. If agreement cannot be reached either in the committee or with management, then a conciliation committee decides with binding effect.20 In these cases and in a few others 21 the involvement of the works council has not only been extended to reach deep into the decision-making process, but the nature of involvement itself has changed: rights of information and consultation have been transformed into co-determination. Another case in point is the Hamburg Port and Storage Ltd. agreement, which states simply that "the works council ... has a right to co-determination ... as regards basic matters of organisation ... including proposed alterations." 22 The union-controlled Bank fiir Gemeinwirtschaft similarly grants the works council a right to co-determination as regards planned alterations which may entail disadvantages for employees.23 Any trendsetting nature of the above examples should not be exaggerated. Expanded co-determination on technology issues is restricted to a few branches, covering an insignificant number of employees. These agreements reflect special conditions of the enterprises concerned which are either public corporations or owned by trade unions or traditionally have close relationships with them — and probably also with the works council — or occupy market niches. Nevertheless, in their field of operation they indicate an important change of optique: whereas traditional agreements focus on the social consequences of new technologies, the latter examples concern joint decision-making in economic matters. This is in vivid contrast to the overall reactive nature of most agreements. In any case, the collectively agreed upgrading of the works councils' role mirrors at the same time the fact that substantive rules contained in collective agreements are not sufficient to structure innovations. Their implementation occurs at the level of the enterprise and its technicalities have to be dealt with there by the body most familiar with them, i. e. the works council. The role of collective agreements is then twofold: they establish policy orientations on substantive issues and procedural rules of how — and how far — the works council is to be associated with planning and implementation at the enterprise level.

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3. Job Security The main concern of rationalisation agreements is job security or, in the illustrative language of the banking agreement, "to safeguard an employee's job in the company." 24 To this end, a few agreements contain absolute prohibitions of dismissal, whereas the vast majority do not exclude termination of employment in principle but relegate it as a means of last resort. The recent Volkswagen agreement belongs to the former category. It stipulates quite categorically "that there are to be ... no redundancies or dismissals as a result of technological change."25 A similar commitment exists for the public service. According to para. 4(1) of the agreement applicable to the municipalities "the employer has the obligation to provide job security for a worker affected by a rationalisation measure."26 Together with agreements for the postal services and railways which contain equivalent provisions27, this would appear to be the bulk of agreements ruling out dismissals. These agreements, too, are examples of a changing optique, reaching beyond the individualistic and remedial nature of older agreements. A ban on dismissals implies that jobs have to be provided for those displaced and it may require job creation. It also necessitates extended manpower planning, involving, as will be explained later, an improved training element; it requires, in other words, developing an overall technology policy, i. e. measures of a preventive nature. These agreements are not only "rationalisation" protection but genuine "employment" protection agreements. Just as was the case with codetermination, dismissal bans reflect special conditions, enabling the enterprises concerned to transform labour costs temporarily and/or partially into fixed costs. The public service is not exposed to significant competition and Volkswagen is in a very strong position, thus respectively eliminating or reducing the need to use reduction in labour costs as a means of competition. From an industrial relations viewpoint they give proof that new technologies are not used by the employer to weaken union influence. The protection offered in the vast majority of agreements is less comprehensive. They only contain obligations as regards existing jobs. As a rule they enshrine a well thought out set of rights offering decreasing protection. Usually, as a first line of defence, a displaced worker has to be offered an "equivalent" and "reasonable" job. 28 Jobs are basically equivalent when they command the same salary.29 If an equivalent job is not available in the same plant or service then a multi-plant employer should offer one in a not-too-distant plant or service.30 If an equivalent job cannot be made available, then the worker is expected to accept any other "reasonable" post, first of all at his plant or service and, if this is impossible, in a not-too-distant plant or service. Some agreements go to great lengths to explain what a "reasonable" post is. According to the banking agreement "reasonableness" is determined according to the nature of the former activities of the employee, his age and state of health and his family situation, as well as the distance between his home and his new work place.31 The above pattern is similar for all agreements. It implies that, in the absence of an "equivalent" job, the employee can be downgraded and has to accept an otherwise "reasonable" job. Some agreements provide that if an "equivalent" is not available at the time of the rationalisation measure but becomes available later, then the worker affected should be offered it on a priority basis.32

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Reassigning a worker does not only imply duties for the employer but also for the employee who has to co-operate. Typical in this respect is the agreement for the banking industry which stipulates that an employee "who refuses to accept a reasonable job ... shall not be entitled to any rights under this agreement."33 Transferring from one job to another may also entail certain expenses and creates a need to adapt to new work environments and processes. To cushion negative effects some agreements offer what is known as "mobility assistance." This may include reimbursing shipping charges34 or additional expenses for transport, food and double housekeeping for a period of two years.35 In the same vein but more substantial are provisions to facilitate adaptation to new activities. For example, extended protection against dismissal is offered in the public service agreement which states that "the employment relationship cannot be terminated during the first nine months of the worker exercising his new function on grounds ... of lacking familiarisation with it." 36 4. Training Training is a vital component in the introduction of new technologies. A skillful workforce capable of making use of innovations is a condition sine qua non for realising their potential. Its importance is not always reflected on the bargaining agenda and, more often than not, it is, in the absence of a general overall technology concept, a mere instrument for reducing job losses by retraining individual employees. Rationalisation protection agreements which do not ban dismissals restrict training to cases "where the employees can be offered another job ... requiring retraining".37 In this narrow framework they provide for organisational and financial matters. Thus, in all cases, the employer has to bear the cost of retraining.38 In addition, throughout the duration of retraining, the employee is to draw his usual monthly salary.39 Whenever possible retraining is to take place within normal working hours. 40 Older agreements limit retraining to six months 41 whereas more recent ones extend the period retraining to twelve months 42 or do not indicate any time limit at all (e. g. the agreement for the banking industry.) Employees have a duty to co-operate, the violation of which entails sanctions. For example, the agreement for the metal industries stipulates that the employee has to refund the salaries received during the retraining period in case he discontinues training prematurely without good reason or refuses continued employment for a certain period after retraining.43 These provisions limit training to an ancillary function: it is provided when substitute jobs are available. In this view training is primarily used to remedy negative manpower consequences of new technologies. Its modalities can be improved here or there, by extending training periods or the like but basically it remains instrumental in reducing hardship for displaced workers. A notable exception in this respect is the recent Volkswagen agreement. It states that, when introducing new technologies, "appropriate training schemes shall be agreed with the works council in good time, based on the company's staffing plan. The training programme shall cover aims, type of training, duration, content and methods." 44 Here a remarkable shift has taken place away from sporadic training activities to

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soften the impact of new technologies towards a systematic ex-ante approach which reaches the planning stage. In addition, training plans are not employer stimulated but the outcome of consultation and consensus with the works council. This would appear to be a significant development. It recognises that innovation and training are closely interrelated and that training schemes should, in the interest of both parties, be part and parcel of an agreed technology strategy, pushing the frontier of works councils' influence via negotiations with management further back into the decision making process of the enterprise. Considering the appreciable cost and long term perspective of training schemes of this kind they show that new technologies are not used by the employer to cut labour costs or shrink unions.45. Integrating training into the overall introduction process is an important step towards a fully-fledged technology policy, on the way from cure to prevention. 5. Income Protection Another principal aim of technology agreements is income protection. It is achieved when the employee is transferred to an "equivalent" post commanding the same salary. If this is not feasible and he has to put up with a lower paid job, then most agreements offer a mechanism to compensate for financial losses. Protection consists of two major elements. First, some agreements lay down limits to prevent excessive downgrading. The agreement for the metal industries, for example, states that "a worker can only be downgraded two salary brackets and a salaried employee only one."46 In the Federal Postal Service workers over 40 years of age after 15 years of service cannot be downgraded at all.47 Secondly, and this is the basic rule in most agreements, the employer has to pay the difference between the old and the new salary, thus compensating any losses. This obligation is, depending on the industry, subject to manifold conditions and limitations. As a rule the employee must have held the post which is to disappear for a certain time, he must have been employed in the company for a number of years and sometimes he must be of a certain age. A fairly typical example is the agreement for the chemical industry which provides that "if jobs are eliminated and redeployment leads to a reduction in average salary then an employee who has occupied a post without interruption for one year and who has been with the enterprise at least 10 years and who has completed 50 years of age shall enjoy income protection ... for a period of nine months."48 This last element reveals that income protection is also limited in time. It is granted only over a certain period, ranging, on average, between three months in the case of older agreements49 and 18 months in the case of more recent ones.50 The agreement for the banking industry is, in keeping with its generally high standard of protection, exceptionally generous since it does not provide any time limit. It states that the employee "shall be entitled to a supplementary allowance equivalent to the difference between his previous monthly salary and his new salary bracket at the time of redeployment, provided he has been with the company for at least 15 consecutive years or, if he has reached the age of 40, at least 10 consecutive years. ... However, this provision shall only apply if the employee has been in his present salary bracket for at least three years." 51 This generosity would appear to reflect the healthy economic situation of banking in the Federal Republic and maybe also the necessity

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for smooth solutions in a customer oriented industry where staff satisfaction is an important part of business success. Equally generous is the agreement in the public service which operates on the principle that the "employer is under an obligation to compensate for salary losses" in case of rationalisation measures.52 The private insurance business, likewise, offers significant protection. It simply states that the employee "receives, as a supplement, the difference between his new and his old monthly salary." 53 6. Dismissal and Severance Pay It has been pointed out that very few agreements ban dismissals. Thus individual and collective dismissals remain possible under general labour law.54 Against this general background most agreements lay down rules on two aspects. First, they extend the period of notice for dismissals by comparison with legislation. Under the civil code and related legislation the general rule is that salaried employees can be dismissed with 6 weeks' notice to the end of a calendar quarter and workers with 2 weeks' notice thus making blue-collar workers more vulnerable to economic downturns than white-collar workers. 55 The agreement for the printing industries, for example, stipulates that blue-collar workers over 30 years and 10 years service have to be given one month's notice, going up to six months in the case of a worker over 45 with 20 years in the company. 56 The banking agreement no longer differentiates between blue-collar workers and salaried employees. It requires 6 weeks' notice for all employees with less than five years of service, going up to 6 months for those with 12 years of service.57 Extended notice is often combined with severance pay. The latter has assumed different functions as the labour market has changed in past years. In times of full employment those affected by rationalisation could expect to find another post in a relatively short time. Under conditions of structural unemployment severance pay often does not provide a financial bridge to a new job but is reduced to compensation for job loss. It is therefore understandable that unions press hard to extend severance pay. Earlier agreements provide for two monthly salaries after 10 years of service, going up to nine months after 25 years of service.58 More recent ones, in particular in flourishing industries or in the public service, are more generous. The banking industry offers 4 monthly salaries after 10 years of service for somebody in his forties, going up to 14 monthly salaries for somebody at age 56 after 26 years of service.59 Most generous is the agreement in the public service of the municipalities which grants up to 18 monthly salaries for workers over 55 and after 25 years of service.60 This concerns only voluntary departures since dismissal of workers is excluded after 15 years of public service. Para. 112 of the Works Constitution Act is equally important when redundancy threatens. While reserving the decision on dismissals for management, it makes the elaboration of a social plan, which has the legal quality of a plant agreement (para. 77 of the Works Constitution Act), mandatory. The social plan provides inter alia for compensation of dismissed employees. However, in practice individual settlements often exceed the amounts negotiated in collective agreements.

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Conclusions 1. New technologies interact with collective bargaining in several respects: new job contents make the traditional distinction between "Arbeiter" and "Angestellte" obsolete, thus stimulating both sides of industry to restructure the traditional dualistic concept of collective agreements. Traditional quantitative bargaining subjects experience important reappraisals and new — qualitative — bargaining subjects arise, spawning new kinds of agreements — the so-called "VDU (visual display units) agreements" and the "rationalisation protection agreements". 2. Starting in the late 1960s, numerous rationalisation protection agreements have been concluded for major industries. They respond in substance and mounting frequency to the increasing incapability of the labour market to absorb those displaced by rapid technological innovation. They also reflect the concern of unions and of employers' associations not to let the technology issue shift unduly to the level of the enterprise, and confirm the widely felt trend towards dealing with more qualitative issues in bargaining. Rationalisation protection agreements provide normative guidance in particular under three broad aspects: (a) employment security, (b) compensation and (c) participation. In those fields they penetrate either directly, or, if indicated by the nature of the subject, by expanding the rights of the works council, to varying degrees into entrepreneurial decision making which encompasses essentially three stages: (a) planning, (b) implementation and (c) the management of manpower consequences. 3. None of the agreements prevents overall job losses on a durable basis, and only a few eliminate the threat of redundancy to existing workers. This is the case for the public service, for Volkswagen and for a few smaller firms with strong positions in market niches. By banning dismissals, labour costs are to a large extent transformed into fixed costs, ruling out cost reduction and anti-union attitudes as major motives for introducing new technologies. Excluding lay-offs narrows entrepreneurial options and is a strong incentive to develop long term strategies, involving as an important element a strong training component with a view to absorbing displaced workers and to gaining maximum benefit from innovation. 4. The majority of agreements are less far-reaching. They provide that displaced workers be put on substitute jobs to the extent they are available. As a matter of preference affected workers are to be transferred to an equivalent post. If this proves impossible, they have to accept, within certain limits, a less-than-equivalent one. Most agreements provide for ancillary rights to cushion the resulting deterioration of the workers' condition. They guarantee in particular temporary income protection, "mobility assistance," limits on downgrading, etc., depending on the branch in question. In this respect flourishing industries, such as banking, but also ailing industries with strong trade unions, seem to provide by comparison the highest level of protection. 5. In case workers cannot be maintained in employment compensation schemes come into play. With variations in detail, depending on union strength, health of the industry concerned, perceived need to shed people — which also helps to explain why ailing industries offer relatively attractive packages — all agreements contain similar mechanisms. They offer (a), by comparison with the law, extended notice

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periods and (b) severance pay. The actual amount is subject to various conditions such as age, years of service and seniority in the post, starting as low as one month and going, in individual cases, up to 18 months. The function of severance pay, the amount of which is in practice often considerably higher than provided for in the agreements, has dramatically changed over the past 30 years. In times of a balanced labour market, severance pay was more of a financial bridge to a new job, whereas nowadays it often serves as a temporary viaticum into an insecure future. 6. Rationalisation agreements improve on statutory participation rights in mainly two respects. First, some agreements, in particular the older ones, specify and sometimes extend the rather vague provisions of the Works Constitution Act. Their field of application however remains restricted to manpower consequences. More recent agreements, in particular of enterprises with a tradition of good union relations, go far beyond and provide for co-determination of the works council in the planning process. This of course extends the works council's influence deeply into the decision making of the enterprise, reaching all socially relevant steps of introducing new technologies. These agreements, at the same time, delineate the function of works councils on the one hand and union and employers' associations on the other in the implementation of new technologies, which of course occurs at the enterprise level. It would be fair to say that collective agreements, in an effort to preserve the priority of collective bargaining at the level of the organisation, provide substantive rules as far as possible and expand the influence of the works council via procedural rules, as far as necessary to deal with implementation issues. 7. It is difficult to pull together the various developments described above and to find a common denominator. From a historical perspective rationalisation protection agreements originally had the function of tackling manpower consequences of new technologies on a consensual basis; planning and implementation were not their concern. They were reactive and remedial in character, wedded to ex post control. Over the years a certain development has taken place. Some agreements expanded to the implementation stage by laying down substantive rules on important subjects such as grading, training and data protection, still fewer reached the planning stage, in particular by upgrading the role of the works council. To the extent these agreements contain bans on dismissal, they require decision makers to develop long term strategies and overall technology policies. Thus far negotiating on new technologies has not degenerated into a basic power conflict. It has even taken place essentially without resorting to industrial action. This was possible since both sides of industry have avoided extreme positions, respectively of unilateralism and of rigid job maintenance, and have managed to identify a few areas of common, long-term interest. Notes 1 The views expressed are those of the author and not of the ILO. Most agreements referred to in this paper are quoted from WSI Tarifarchiv, Elemente qualitativer Tarifpolitik, No. 6, Wirtschafts- und Sozialwissenschaftliches Institut des Deutschen Gewerkschaftsbundes Tarifarchiv, Düsseldorf, March 1987. 2 See, for example, plant agreement concluded between the works council and Bayer AG of 16. 10. 1986.

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3 Agreement for the chemical industry of 18. 7. 87. 4 Agreement for the printing industry on the introduction and application of computerised text systems of 20. 3. 1978; appendix to the frame agreement for the sugar industry of 31. 12. 1982; agreement for the private insurance industry on medical checkups of 26. 6. 1980. See also WSI Tarifarchiv, Elemente qualitativer Tarifpolitik, No. 2, September 1985. 5 European Industrial Relations Review, Survey of "rationalisation protection agreements", Eclipse Publications LTD, London, March 1986, p. 14. 6 See, for a conceptual outline: T. A. Kochan and B. Tamir (1986): Collective Bargaining and New Technology: Some Preliminary Propositions, IIRA 7th World Congress; Technological change and labour relations, Hamburg: IIRA, pp. 201 ff. 7 Para. 3 of the agreement for the printing industry of 6. 7. 1984; para. 3 of the agreement for the metal industries of 25. 6. 1968; para. 2 of the agreement for the private insurance industry of 16. 4. 1983 and many others. 8 Para. 3 of the agreement for the banking industry of 14. 3. 1985. 9 Para. 2 auf the agreement for the public service (municipalities) of 9.1. 1987. 10 See explicitly para. 13(1) of the frame agreement for the chemical industry of 1. 3. 1985. 11 Para. 3 of the agreement for the banking industry of 14. 3. 1985. Similarly all other major agreements. 12 Para. 3 of the Volkswagen technology agreement of 23. 2. 1987. 13 For example, rationalisation measures. 14 Para. 4 of the agreement for the metal industry of 25. 6. 1968. 15 Para. 4 of the agreement for the banking industry of 14. 3. 1985. 16 Para. 4 of the agreement for the printing industry of 6. 7. 1984. 17 Para. 2.3 of the rationalisation protection agreement for the metal industries in Nordwurttemberg/Nordbaden of 3. 4. 1978. 18 Para. 3 of the agreement for the public service (municipalities) of 9.1. 1987. 19 Para. 2 of the basic agreement for the cigarette industry of 3. 7. 1981. 20 Para. 4 of the agreement for the North Rhine Westphalian Regional Development Corporation of 17. 5. 1971. 21 See, e. g., agreement with Firma Dom-Samen Fehlemann KG of 8. 2. 1984 and agreement for the health resort society Bad Sooden-Allendorf of 22. 1. 1986. 22 Para. 1 of the constitutional agreement of 9. 7. 1970 of the Hamburg Port and Storage Ltd. 23 Para. 3.2.1 of the agreement for the Bank fur Gemeinschaft on supplementing codetermination rights of 25. 5. 1973. 24 Para. 5(1) of the agreement for the banking industry of 14. 3. 1985. 25 Para. 4(3) of the Volkswagen technology agreement of 23. 2. 1987. 26 Agreement for the public service (municipalities) of 9. 1. 1987. 27 Para. 3 of the agreement for the Federal German Railways of 8. 8. 1973 and para. 4 of the agreement for the Federal German Postal Services of 4. 5. 1972. See also para. 2 of agreement with the Magistrate of the City of Bremerhaven which prohibits dismissals in case of rationalisation measures. 28 Para. 5(1) of the agreement for the metal industries of 25. 6. 1968; similar para. 3 of the agreement for the metal industries in Nordwurttemberg/Nordbaden of 3. 4. 1978; para. 5 of the agreement for the banking industry of 14. 3. 1985 and many other agreements. 29 Para. 5(6) of the agreement for the Volksfursorge group of enterprises of 27. 11. 1985, similarly para. 4(5) of the agreement with the Magistrate of the City of Bremerhaven of 23. 1. 1986 and others. 30 Para. 5(1) of the agreement for the banking industry of 14. 3.1985. See also the agreements in the public service. 31 Para. 5(4) of the agreement for the banking industry of 14. 3. 1985. Still more detailed para. 3(3) of the agreement for the Federal German Railways of 8. 8. 1973.

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32 See para. 3(4) of the agreement for the metal industries of Nordwurttemberg/Nordbaden of 3. 4. 1978. See also para. 5(5) of the agreement for the metal industries of 25. 6. 1968. 33 Para. 5(6) of the agreement for the banking industry of 14. 3. 1985. 34 Para. 8(1) of the agreement for the private insurance industry of 16. 4. 1983. 35 Para. 8 of the agreement for the United Electricity Works of Westphalia of 5. 9. 1980. 36 Para. 6(1) of the agreement for the public service (municipalities) of 9.1. 1987. 37 Para. 6 of the agreement for the banking industry of 14. 3. 1985; similar para. 7 of the agreement for the printing industry of 20. 3. 1978 and many other agreements. 38 Para. 7(2) of the agreement for the banking industry of 14. 3. 1985; para. 7(1) of the agreement for the public service (municipalities) of 9. 1. 1987; similarly all other agreements. 39 See, for example, para. 6(1) of the agreement for the metal industries of 25. 6. 1968 and many other agreements. 40 Para. 6(4) of the agreement for the banking industry of 14. 3. 1985 and all other major agreements. 41 For example para. 6(1) of the agreement for the metal industries of 25. 6. 1968. 42 Para. 5(2) of the agreement for the public service (municipalities) of 9. 1. 1987. 43 Para 6(4) of the agreement for the metal industries of 25. 6. 1968; similarly most other agreements. 44 Para. 7 of the Volkswagen technology agreement of 23. 2. 1987. 45 See Kochan and Tamir loc. cit. p. 209 Note 6. 46 Para. 4(3) of the agreement for the metal industries in Nordwurttemberg/Nordbaden of 3. 4. 1978; similarly para. 4 of the rationalisation protection agreement for the BEWAGAG of 17. 7. 1979. 47 Para. 3 of the agreement for the Federal Postal Services of 2. 5. 1972. 48 Para. 13 of the agreement for the chemical industry of 1. 3. 1985. 49 Para. 5 of the agreement for the metal industries of 25. 5. 1968. 50 Para. 5(1) of the rationalisation protection agreement for the metal industries (Nordwurttemberg/Nordbaden) of 3. 4. 1978. 51 Para. 8(2) of the rationalisation protection agreement for the banking industry of 14. 3. 1985. 52 Para. 7(1) of the agreement for the public service (municipalities) of 9.1. 1987. 53 Para. 7(1) of the agreement for the private insurance business of 16. 4. 1983. 54 See in general: E. Yemin (Ed.): Workforce Reductions in Undertakings, Geneva: ILO 1982. 55 This kind of differential treatment is very controversial. See, for example, LAG Frankfurt, in: Der Betrieb 1986, p. 490. 56 Para. 6 of the agreement for the printing industry of 6. 7. 1984. 57 Para. 17 of the agreement for the banking industry of 14. 3. 1985. 58 Para. 7 of the agreement for the metal industries of 25. 6. 1968. 59 Para. 9 of the rationalisation protection agreement for the banking industry of 14. 3. 1985. 60 Para. 8 of the agreement for the public service (municipalities) of 9.1. 1987.

New Technology in the Context of Structural Change, with Special Reference to Japan Yasuo Kuwahara

I. Environment Surrounding Today's Technological Change The world is undergoing major social and economic change, a new Industrial Revolution, caused by a group of new technologies such as micro-electronics, biotechnology, opto-electronics and telecommunication. The new wave of technological innovation emerged in the midst of depression after the first oil crisis and has expanded into a global force in an amazingly short period. The impact of these new technologies on our society seems to be far more momentous in speed and scale than experienced in the past. A decisive difference between today and the past, in the perception of technology, is that technological development is increasingly coloured by political elements. Political leaders of major developed countries seem to believe that the country which maintains a competitive edge in new technology research and development can obtain a powerful weapon for achieving hegemony in the international arena which has entered "the technology age." However, the development of technology depends on various factors. The absolute volume of research and development (R and D) funds does not always lead to success. Favourable economic conditions, appropriate infrastructure, input factors such as labour and capital, creativity of researchers, efficient organisation of R and D and industrialisation are all major requirements for successful performance. These conditions are not, however, easily obtained. On top of this, the development and application of the new technologies is a highly international process. This internationalisation of high technology has implications for government policy. Governments of developed countries are increasingly concerned about the integration of science and technology policy into industrial policy. With regard to the economic climate, new technology is often viewed with ambivalence. Countries experiencing unfavourable economic conditions wish to utilise new technology as leverage for recovery from stagnation. However, the labour-saving effect associated with technological change often makes it difficult to introduce new technology, especially when the economic climate is unfavourable. The accelerated development of technological change may aggravate the present unemployment problem. Even if the innovation is otherwise desirable for revitalising the economy, the adverse effect of technological unemployment may prevent trade unions and employees from accepting new technology. On the other hand, the statement that automation or robotisation is likely in the long run to create many more jobs than they will destroy, brings waves of disbelief and anxiety. New technologies are only one element of structural change, but they

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are the least predictable. There are various reasons which make it difficult to forecast the possible outcome of technological change with certainty. Why is it so hard to predict the effects of advanced technology on employment? First, the future of technological change itself is often difficult to predict. Although various techniques of forecasting the trend of technological change are available, they are far from ideal. Because of the imperfect information on the nature of technological change, it is optimistic to expect a truly reliable picture of the future under technological change. Second, it is extremely difficult to evaluate the influence of particular technology, e. g. industrial robots, on employment separated from other elements such as other types of technologies, the business cycle, and so forth. Various forces work simultaneously in the real world. Although the assumption of "ceteris paribus" (other conditions being equal) is often adopted in economic analysis, this is only a compromise to make theory applicable to the real world. The above point is very important in evaluating the impact of technological change in the present stage since various structural changes are simultaneously under way in today's labour market and have complex influences on employment, as well as on technological change itself. These changes include the progress of the service sector, the aging of the population, increase in the supply of highly educated manpower and the role of women in the workforce. Third, there are some defects in the study methods and analytical techniques employed. Current studies deal mainly with technology and equipment in forms plainly visible to the researchers, such as robots and computer-aided machine tools. Most research consists of case studies carried out on the micro-economic level, focusing on industries and companies that have introduced these devices. However, it is often difficult to know whether new technologies such as LSI are introduced or not, mostly because of the smallness of the parts utilised. In addition, while case studies at the micro-economic level provide useful insights into the ways labour and management are adapting to advanced technology, the studies do not lead to an overview of the impact of new technology on employment. What is needed is the design and execution of studies capable of providing a more balanced view. Taking these issues into consideration, the following part of this essay intends to shed light on the aspects of technological changes under various structural changes. Although the description mostly stems from the Japanese experience, it is equally applicable to the cases of other countries.

II. New Technology and Structural Change Although various types of new technologies are being introduced into a wide range of industries, the most salient changes are observed in manufacturing. Therefore, the examination starts from this sector. The introduction of robots and other new equipment is gradually spreading into the mainstream of production, and many studies have shown a corresponding decline in the employment of production workers, due to the labour-saving effect inherent in these new technologies. However, new technology also stimulates stag-

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nated businesses, accelerating the development of new products and industries. The recent boom in the high technology sector means that we must add the job gains in this field to the job losses elsewhere to make a comprehensive evaluation. In the manufacturing industry, the effects of technological change are most pronounced. Studies carried out since the oil crisis of 1973 indicate that employment in manufacturing has either declined or held steady in virtually every industrialised country (OECD 1984). Production is beginning to expand again with the advent of recovery, yet employment has not shown a parallel increase. In Japan, the number of employees in the manufacturing sector fell from 12,010,000 in 1974, to 11,070,000 in 1979. After that, there was a slight recovery to 12,120,000 in 1984. We might term the current phase one of "jobless growth," for production is expanding with the recovery in economic performance, while employment remains stagnant. Much concern has been expressed about this trend in recent years. In some European countries, technological change has often been singled out for most of the blame. Starting in the 1970s, a few companies in some European countries have cut back the scale of their operations and invested in new systems for modernisation which resulted in a reduction of labour input. New technologies, typified by microelectronics, have been seen as the cause of this decrease in employment. The situation in Japan is fundamentally the same. To be sure, it is extremely difficult to evaluate the effects of technological change on employment in isolation from other factors. An estimate of the impact of new technology on employment can be made, however, by focusing on the "disemployment effect," that is, the reduction in man-hours of the total manufacturing labour force that has come about as a consequence of rising labour productivity. An estimate made by Kuwahara and Kimura (1983) revealed a large amount of disemployment over the 1970 — 79 period and a slight recovery after that. More detailed data broken down by industry show that since the first oil crisis the disemployment effect has been seen in a wide range of industries, including textiles, clothing, pulp and paper, chemicals, steel, non-ferrous metals, metal products, general machinery and transport machinery. By contrast, high-technology industries like electric machinery and precision instruments have increased both regular employment and man-hours as production has expanded. As a result, it is possible to surmise that there has been a gradual decline in the manufacturing industry's ability to generate new employment opportunities. We can obviously expect employment in the high-technology industries to continue to climb, but it remains to be seen whether this expansion will make up for the decreases in other areas. Among many structural changes in the labour market, the most influential one is due to the progress of the service sector. The development of service is not only found in the tertiary sector, but also in the primary and secondary sectors. Even in the manufacturing industry, jobs categorised as "information-related jobs" or "service-jobs" have been increasing, as shown in the increase in the white-collar/ blue-collar ratio in the industry. This increase is partly a result of decreased bluecollar jobs due to the labour-saving effect on the production process (Kuwahara 1983).

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As the well-known theory based on empirical findings by Petty (Hull 1889) and Clark (1940) shows, many developed countries shifted the weight of economic activity from the primary to the secondary, and to the tertiary sector. If we assume that the advent of the service economy or the post-industrial era occurs when the tertiary sector of an economy achieves a predominant share of gross domestic production, we may point out that the tertiary sector in Japan surpassed the 50 per cent level in the first half of the 1970s. However, traditional thinking based on the Petty/Clark studies tends to underestimate the importance of the development towards the service economy, since the development of a service economy is not only found in the tertiary sector but also found in primary and secondary sectors (Kuwahara 1982). In the context of this trend, the following point should be noted. Although the negative effect of labour saving in manufacturing was considerable, the positive effect on employment due to the expansion in final demand often surpassed the former. This is a reason why employment in the manufacturing sector in Japan during the post-oil crisis period did not show such a marked decline as was recorded in many Western countries, despite the active introduction of new technology. The positive effect of final demand on job creation is far more important in the service industry. It is often said that most future jobs in developed countries are going to be "services," which is a misnomer for many diversified jobs. In general, the traditional service sector has remained rather stable in terms of employment, while the "information sector" is growing rapidly. While the future of employment in manufacturing is not promising, employment in the services sector has shown a stable growth even during a recessionary period in Japan. The service industry has played an extremely important role in absorbing surplus labour from the manufacturing industry. Employment in Japan's service industry grew from 5,637,000 in 1971, to 8,929,000 in 1982 (Somucho 1984). The "degree of tertiarisation" of economies, as measured by the proportion of civilian employment in services, varies from country to country. In 1983, it was 68.5 per cent in the United States and 56.0 per cent in Japan, while OECD Europe recorded an average of 52.0 per cent in 1982 (OECD 1984). The service industry has traditionally been regarded as a stagnant sector which does not contribute to productivity increases. The word "industry" has often meant "manufacturing." The importance of the service industry in generating employment should be more positively construed. However, even the service industry has been affected by labour-saving technological advances. Examples include point-of-sale (POS) systems in marketing such as in supermarkets, on-line and electronic banking systems in the banking and financing industries and advanced data communication systems in the information and communications industries. Consider banking. The number of bank employees in Japan increased from around 293,000 in 1970, to 372,000 in 1981. The numerical peak was recorded in 1979. However, the number of workers has been declining since. Female bank employees in particular are on the decline. This trend is attributable to the introduction of automatic tellers and other equipment associated with the switch to online banking. The new technologies have replaced the jobs of workers engaged in simple tasks in which many female workers are employed.

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The application of office automation may bring in substantial changes in manufacturing, but they extend further throughout the service industries where improvement of productivity had been a major need for many years. In the public sector as well, the implication of administrative reform programmes means that employment probably will not expand in the future. We cannot afford to remain optimistic regarding the potential of the tertiary sector to absorb labour. In addition, the development towards a service economy could give rise to jobs with poor working conditions, remuneration and career prospects and thus strengthen labour market and social dualism. Should this scenario prove to be plausible, public expectation of expanding employment opportunities in high technology industries will increase in Japan and other countries. Of course, there is no consensus as yet just what industries are included in the high-technology category. In addition to the problem of definition, it is difficult to fit many of the developing new industries into traditional industry classifications and, further, no new classifications corresponding to contemporary needs have been established. Leaving aside these issues, then, which industries in recent years have contributed the most to increases or decreases in employment? Looking at the 1975 — 80 period on the basis of national census statistics, we find that overall Japanese employment rose by 3 million employees, from 34.7 million to 37.7 million. Among the industries that made the largest contributions to this increase were retailing, business services, construction, medical services and wholesaling. Industries making a negative contribution included textiles, shipbuilding, steel and non-ferrous metals, lumber and industrial machinery, all of which are in the manufacturing industry. From these statistics it is clear that the service industry made by far the largest contribution to growth in employment. The most conspicuous declines occurred in the manufacturing industry, particularly materials industries such as steel, nonferrous metals, and paper and pulp. Relatively large increases were recorded by manufacturing in the electronics field, including consumer electronics and communications equipment. Also significant is the large contribution made by business services, which include the software industry. In this connection, it should be noted that various new products introduced during the adjustment phase of industrial change contributed very much to the creation of new employment opportunities. In developing technology and new products, basic research is obviously important, but applications technology and new-product development play an even more decisive role. The great stress placed on commercial applications in Japan's research and development efforts not only has responded to market needs but has coincidentally also created employment opportunities.

III. Major Issues Relating to Structural Change Despite fears of technological unemployment, the high technology industries are seen as a driving force of growth and a source of hope for the future. Although technological progress will undoubtedly cause a short-term decline in employment,

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the long-term effect on employment is less certain. Among the factors to be taken into consideration are the character of each technology, industrial structure, market conditions, and the response of labour and management. Although there are many issues which should be examined, future developments in Japan are expected to be shaped to a large degree by the widespread penetration of new technology among even small businesses and the use of new technologies in regional development. Because both small enterprises and regional communities look on new technologies favourably, the technological revolution is rippling through society at an extremely rapid pace. It is noteworthy that the majority of computer-aided machine tools has been installed by small companies. This is one clear sign that new technologies are bringing about a transformation of the foundations on which these firms are based, including their production structures and management styles. In this new climate, a few notable changes are in progress in the labour market. One of the remarkable changes is the increased commitment of employees to the companies in which they are employed. Under the increased competition among firms after the oil crisis, both managers and employees are very much concerned about the relative position of their firms and their business performance. The aggravated condition of the labour market in the post-oil crisis accelerated this trend. Fears of unemployment or inferior job opportunities led employees to place a higher priority on job security than on wage increases. Firms are being evaluated by present and prospective employees more in terms of secure employment than on the possibility and extent of further wage increases. This is, however, only one side of the coin. Despite the trend toward an increased commitment by employees to their firms, there is an increase in the supply of flexible and mobile workers such as part-timers and temporary workers. This is a world-wide phenomenon. Let us take the example of part-timers. The number of part-timers based on the definition used by the Ministry of Labour increased from 698,600 in 1975, to 1,879,300 in 1983. The rapid growth of the temporary help industry is another recent change in the same direction (Kuwahara 1985a). These changes may be viewed as the re-emergence of the traditional dual labour market. There are, however, various changes which make it difficult to support this interpretation. For example, an increasing number of vital forms are emerging, which are often based in high-technology and active entrepreneurship. As a source of vitalising the stagnant economy, great expectations are placed on the future of these firms. Of course, there are a great number of traditional small and medium sized enterprises (some of which are stagnant or declining) operating at the same time. Japan is becoming increasingly information oriented and this is transforming the country's labour force, and significantly increasing the relative size of the whitecollar and service segment of the working population. While employment opportunities continue to decline in production divisions, a serious shortage of software workers and highly skilled workers has emerged in the information sector. Though employment in information services has been expanding rapidly since the mid1970s, supply has been unable to keep up with demand. The spread of computers has been accompanied by a sudden upsurge in the cost of software, which is perhaps the most labour-intensive area in an information-oriented society.

New Technology in the Context of Structural Change, with Special Reference to Japan 77 The training of software workers is another problem area. For obvious reasons young workers are better adapted than older workers for jobs in the software industry which require imagination and hard work, but problems are evident in young workers' dedication to their work and employee turnover is high. In other industries as well, the apparent overall balance of labour supply and demand today does not guarantee that serious mismatches will not arise in various subdivisions of the economy tomorrow, for Japan's demographic structure is rapidly aging. The aging ratio (population aged 65 years old and over divided by total population) in Japan today is about 10 per cent and considerably below that of other developed countries. However, the ratio is expected to rise sharply and reach about 16 per cent in 2000 and will be the highest (about 21—22 per cent) in around 2020. Thus, the adjustment of the mismatch among the different age groups is becoming a serious problem. These structural changes have altered the climate for union organisation, too. The "industrial locus of unionism" (Freeman and Medoff 1984) is seriously influenced by the shift towards a service economy and so forth, which makes it more difficult to organise new types of workers employed in new industries. The size of firms in the service industry is generally small and makes it difficult to organise members effectively. Labour unions in major developed countries are, without exception, forced to reconsider their policies in this new but cold climate. The current proliferation of technological development is an irreversible trend. The speed and extent of technological change will not be properly controlled by the responses of labour and management. Social control over this process is imperative not only in the fields of military applications and pollution control, but also in the area of civilian technology. References Clark, Colin (1940): The Conditions of Economic Progress, London: Macmillan, 1st ed., 1940, 2nd ed., 1951. Freeman, R. and Medoff, J. (1984): What Do Unions Do? New York: Free Press. Japan Institute of Labour (1984): Micro-Electronics and the Response of Labour Unions, Tokyo: JIL. Keizai Kikaku Cho (Economic Planning Agency) (1985): Keizai Hakusho (The white paper on economy), Tokyo: MOF. Koyou Shokugiyou Sougou Kenkyujo (1984): Maikuroerekutoronikusu no koyou nioyobosu ryouteki eikyou ni kansuru houkokusho, (A report on the impact of micro-electronics on the quantitative aspect of employment), mimeo. Kuwahara, Yasuo (1982): Wagakuklni seizougyou bumon niokeru saabisuka shinten no mekanizumu, (The mechanism of service economy in the Japanese manufacturing sector.), Nihon Roudou Kyoukai Zassi (the monthly journal of the Japan Institute of Labour), July. Kuwahara, Yasuo (1983): Industrial Locus of Trade Unionism in Japan, Japan Labor Bulletin (Tokyo), Vol. 22, December 1983, p. 5 - 8 . Kuwahara, Yasuo (1985a): What Does the Increase of Temporary Workers Mean to the Japanese Labour Market, Japan Labour Bulletin, February. Kuwahara, Yasuo (1985b): The View and Responses of Labour and Management toward New Technology in Japan, Paper submitted to the International Symposium on micro-electronics and labour, Tokyo, 25 — 27 September, 1985.

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Kuwahara, Yasuo and Kimura, Fumikatsu (1983): Gijutsu Henka to Koyou (Technological change and employment), Nihon Roudou Kyoukai Zassi (the monthly journal of the Japan Institute of Labour), February. OECD (1984): Employment Outlook, Paris: OECD. Okimoto, Daniel I., Sugano, Takuo, and Weinstein, Franklin B. (1984): Competitive Edge: The Semiconductor Industry in the US and Japan, Stanford: Stanford University Press. C. H. Hull (ed.): Political Arithmetick: The Economic Writings of Sir William Petty, ed. by C. H. Hull, vol. 1, Cambridge: Cambridge University Press, 1889, rep. ed., New York: Kelly, 1963. Somucho (1984): Roudouryoku Chousa, (Survey on labour force), Tokyo: Insatsu kyoku. Somucho (1983): Shuugyou kouzou kihon chousa, (Basic survey on employment structure), Tokyo: Insatsu kyoku.

Chapter II Institutional Forms of Workers' Participation, with Special Reference to the Federal Republic of Germany

Introduction Manfred Weiss

I. Workers' Participation as a Subsystem within a Complex Society The central issue concerning this topic is not whether workers' participation is a legitimate part of the modern concept of industrial relations. This, at least in theory, is no longer widely disputed. Taking this as a starting point, the question arises as to which particular type of workers' participation is likely to be most effective in relation to what is expected of it in a given society. Therefore workers' participation has to be discussed with reference to a specific country. This does not mean that the German system of workers' participation is some sort of model which could be partly or wholly transposed elsewhere. Such an idea would be erroneous for many reasons. The reference to a specific country is necessary, however, if one is to avoid a purely abstract and pointless discussion on workers' participation in general. The analysis of a system of workers' participation in a specific country offers the chance to evaluate it within the overall industrial relations context as well as within the historical, cultural, political and socioeconomic framework of that country. It thus becomes possible to identify the similarities to and differences from the position in other countries, which is essential if one is to make a comparative analysis. The selection of the German system as the focus of discussion in this chapter is based on several reasons. First, in many countries and fora the German system of workers' participation has played a role and is still playing a role as a reference point in the debates on how to construct or reconstruct the system of industrial relations of those countries. There may be a strong tendency to reject the German approach, as in the discussion surrounding the Bullock Report in Great Britain, or a degree of acceptance as is the case in some developing countries. In other words, the widespread interest shown in this system is a main justification for its selection as a basis for comparison. The second reason is closely related to the first one. The German system of workers' participation is extremely complex. If isolated parts of it, such as for example workers' representation on the supervisory board, are detached from the inter-related parts of the total structure and are analysed and evaluated separately, the danger of misunderstanding is enormous. Unfortunately, this fragmentary approach is a rather common one. It therefore seems necessary to pay special attention to the many inter-related factors which together constitute this subsystem of workers' participation. The basic features and the main dynamics and problems of the German system of workers' participation are sketched in the contributions by Endruweit and Berger.

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II. International Trends Institutional workers' participation is no longer a phenomenon restricted to highly industrialised countries but it has also become a common pattern in a number of developing countries. There is no universal and uniform pattern of workers' participation but rather rich diversity. The diversity concerns all possible aspects of a system of workers' participation: the ways in which it is introduced, the legal instruments it is based on, the goals and objectives it is supposed to promote, its limitation to certain sectors and, last but not least, its institutional character. In spite of the variety and diversity there seems to be one common problem which, from the German standpoint, has a familiar ring: the need for clarification and very precise definition of the trade union role in the workers' participation machinery. On the other hand, it seems very doubtful how far systems of workers' participation in the developing countries are comparable to a system like the German one. The doubts are rooted not only in the differences between the cultural, historical and economic contexts. They are also based on the fact that in many developing countries workers' participation is supposed to be a tool to promote a sort of socialist development, as an instrument for the transformation of society. It has to be kept in mind that, in the industrialised market economy countries, workers' participation is an integral part of the market system. Thus the common conceptual denominator of workers' participation in the German sense and workers' participation elsewhere may well be very small. But on the other hand, it is certainly possible that, in spite of fundamentally different goals and a fundamentally different economic framework, similarities may exist, at least in so far as effects on the relationship between employers and workers are concerned.

III. Comparative Analysis Institutions as parts of a complex industrial relations system can be evaluated only if seen within the context of this particular complex structure. Starting from this basic observation, Schregle stresses the point that comparison can never be limited to "comparable" bodies. For him the consequence is the following: "in order to be meaningful, international comparison of the German 'model' of institutionalised workers' participation must include all institutional forms of workers' representation or, to put it differently, all aspects of collective defence of workers' interests." But then the question arises whether comparison at all is realistic if the whole of the formal and informal overall structure has to be the object of comparison. This, of course, is not the consequence of Schregle's radical view. His view simply implies a change of focus: a shift from the institution to the function. Instead of comparing institutions, he is pleading for the functional approach. This means that one must clarify the function which is to be the subject of comparison. The variety of possible functions performed by a system of workers' participation is so complex that it would otherwise be difficult to launch an international comparison in this field at all. That is why Schregle suggests that the emphasis should be on the question of how far decisions which have traditionally been management decisions are now

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83

affected by the existing formal and informal machinery of workers' participation in the various countries. This is exactly the viewpoint of Neal, Plowman and Summers when they compare the system in their own countries with the German system of workers' participation.

IV. Perspectives The discussion in this chapter mainly focuses on three dimensions: the elaboration of an analytical framework for comparative research, the actual influence of workers' participation on specific management decisions, and trends in workers' participation. As far as the analytical framework is concerned, four categories were initially considered as being useful tools: universality of the system (who is included? who is excluded?), scope of the system (what decisions and in what degree, are affected by the system?), comprehensiveness of the system (is it a one channel, two channel or multi-channel system?) and degree of individual workers' access to the system (are workers' interests or workers' representatives' interests promoted by the system?). It has become clear, however, that this categorial set has to be complemented by further categories. Thus it has been proposed that the formality and density of legal regulation could be used as an indicator for the actual functioning of a workers' participation system. It has become more and more evident that it is not sufficient simply to shift from the institutional to the functional approach and that there is a necessity to categorize along quasi-institutional patterns. Thus it would make a difference whether it is a system of direct participation or a system of indirect participation which is based on the idea of representativity. Further, the levels of participation have to be distinguished. Finally the distinction according to the climate and character of participation, whether conflictual or non-conflictual, has been suggested. In short, a whole set of different subcategories emerges which in the future will make it easier to find an analytical base for comparative research in this field. The starting point for the second dimension (i. e. influence of workers' participation) can be reflected in a simple case: management introduces new technologies. The introduction of those new technologies leads to serious negative effects for the workforce (deskilling, transfer, dismissal, etc.). The question is: in such a case to what extent do the different systems affect the relevant management decisions? And at what stage of the decision-making process does the workers' influence play a role? In discussing the different approaches as provided by the different systems it turns out that, in spite of many differences, one common pattern seems to be more or less universal: the workers' influence is lowest and latest in decision-making on economic matters; it is much more extensive in reference to decisions on personnel and social matters. Two aspects emerging from the discussion are worth special mention. First it turns out that the traditional concept of decision-making may be inadequate. Its connotation is a momentary event. Reality, however, is different. The idea of a long-term procedure may be more appropriate to describe management's decision-

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Manfred Weiss

making activity. Secondly, the effect of workers' participation to a great extent depends on management's attitude towards such a system. At the same time there is a tremendous difference in respect of those attitudes all over the world. This leads to the question whether there are factors which could be analysed and generalised in order to explain those differences. History and tradition are offered as a possible explanation. Others suggest that management's attitude tends to be more friendly where workers' participation is merely an internal activity within the enterprise and more hostile where it is an external phenomenon. These, as other ideas on the subject, are highly contested. There is no consensus and the search for explaining the differences in managements' attitude remains a task for the future. The third and most interesting dimension of the discussion relating to this chapter focuses on trends of workers' participation. First, to what extent is the functioning and the structure of workers' participation dependent on the economic situation — boom or recession? Secondly, to what extent may further development of workers' participation become counterproductive by imposing too many costs on the economy, the enterprises, and even the workers themselves? Thirdly, and finally, is there a likelihood of an increase or of a decrease of workers' participation in the future? As far as the relationship to the economic situation is concerned, the debate remains controversial. Whereas some commentators deny any relationship between economic developments and workers' participation, others insist on a close relationship between the two elements. This latter group, however, does not agree on the kind of relationship. Whereas some suggest that systems of workers' participation in times of economic recession are losing their function and suffer a weakening of their structure, others insist on distinguishing between conflictual and co-operative systems. In conflictual systems, it is suggested, workers' participation in times of recession becomes more effective for the very reason that management's search for cooperation is a necessity in order to get the acceptance it needs for its decisions. More important than the details of this controversy is the fact that there is a degree of consensus that it is not sufficient to look on the relationship between the economic situation and workers' participation; it is important to include the labour movement's political power as an intervening element of explanation. The more powerful the labour movement is in a specific country the less a change in the economic situation will have an impact on the structure and the functioning of the system of workers' participation. With reference to the increasing costs of workers' participation (delay of decisions, bureaucracy, financial burden, etc.) it is stressed that beyond a certain point workers' participation could become a danger for the proper functioning of enterprises and thereby endanger the whole system including the workers themselves. Contrary to this view, other commentators stress that workers' participation is an exercise in democracy not only affecting the workers' position within the plant or enterprise but enabling him or her to participate in the democratic structure of society. This has been suggested as being especially important in times where a loss of democratic spirit is to be observed. In short, for this group the value of workers' participation always is more important than its possible negative effects. Discussion of this aspect also indicates that delay of decisions may not necessarily mean a danger for the functioning of enterprises. In this context reference has been made to Japan where

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85

management decisions regularly are discussed at length with workers' representatives and nevertheless the proper functioning of management's decision-making is not doubted at all. In regard to the future of workers' participation, both pessimistic and optimistic views have been voiced. The pessimistic view stresses the loss of democratic spirit as already mentioned. It refers to the increasing individualistic approach and to the tendencies to weaken solidarity. The optimistic view, however, makes reference to the new structure of the labour market (increasing segmentation and fragmentation) and to the dynamics of a changing economic structure (new technologies leading to an increasing need of acceptance, etc.). In other words, the need for cooperation on a decentralised level is indicated by changes in the labour market and in the economic structure. Therefore workers' participation — perhaps in a different shape — will play an increasing role in the future. Whether the pessimistic or the optimistic view is more appropriate remains controversial, and it will be for the future to decide this question.

The Functioning of Institutionalised Forms of Workers' Participation — Seen from a Social Science Perspective* Günter Endruweit and Gerhard Berger

Labour relations are not just a question for one sector of society. Rather, they are a factor determining the stability of both society and polity. Thus the question whether the Federal Republic of Germany will find itself with about 3 or even 6 million unemployed in 1990 — depending, for example, on future GNP growth — marks a problem that "calls into question the stability of the political system in Germany." 1

1. The Social Role of the German Form of Participation First of all, workers' participation in West Germany is characterised by offering the organisations of employees and employers a legal framework for autonomous co-operation. From the co-determination rules for firms with five employees up to the highest level of collective bargaining, state intervention is restricted to a minimum. It should be confined to adjudicating disputes concerning the application of legal norms. Having fulfilled its role as legislator, the State does not normally use its power in matters of co-determination. 2 Thus, the everyday practice of co-determination may be seen as a kind of legally restrained "market economy": each side may operate within the legal framework without governmental interference. In contrast, the strikes in the Danish civil service in the Spring of 1985 drew attention to an alternative model with decisive state intervention. The West German model is based on the philosophy of regulating social conflicts without state intervention in relatively autonomous sectors, where conflict is to be confined to the societal sectors directly concerned. The State as the political organisation of society should not be involved; the government (e. g. society as a whole) should not have to act against certain segments of society. This model of containing social conflicts can provide a framework for social peace and societal stability which will probably last only as long as the conflict between employers and employees does not directly or indirectly affect other sectors of society. If the civil service enforces its demands by striking and thereby paralysing public transport, suspending medical services and drowning the city in garbage, then the call for state intervention will quickly be heard. And if employers only give in to wage claims by passing on the costs and the respective decrease in their profits to higher consumer prices, the resulting inflation will affect the vital interests of the members

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of those societal sectors who cannot just take what they want. In such cases, sectoral autonomy no longer contributes to societal stability and may easily lose its legitimacy. But one should not discuss exclusively how those social groupings of employers and employees affect society as a whole. They themselves are subject to the legal institutions established by society through the State; they are only allowed to realise their aims within the boundaries of the legal framework. Both directions of interdependence will be discussed in this essay from an analysis of some recent examples. In doing this, we assume that the reader is familiar with the details of workers' participation. 3 For terminological reasons one should mention that as regards this type of interaction, there is a relatively uncomplicated twolevel situation: on the one hand, the interaction of collective agreements (collective bargaining) and, on the other hand, co-determination at the enterprise or intraplant level.

2. Labour Market Conditions for Participation Up to the mid-seventies, the increase in the labour force could not satisfy the growing demand for labour. Therefore, unemployment was practically non-existent and millions of foreign migrant workers had to be brought into the country. At the same time, there was a continuous growth of the GNP and of the foreign trade surplus. This changed about twelve years ago. Table 1 indicates the deteriorating situation of the labour market since about 1975. While the labour force continued to grow, the number of gainfully employed persons decreased, showing upward tendencies only now and again compared with the year before. Short-term forecasts are extrapolating this very development into the future. For example, the President of the Federal Employment Agency informed the public recently that even under the "optimistic" assumption that the GNP would grow at an average rate of 2.5 per cent per year, there would still be more than 2.4 million people unemployed by 1990. He is not the only one to be aware of the danger "that the next labour market deterioration due to economic recession will start at a very high level of unemployment". 4 The fact that other European countries are encountering the same labour market crisis (Table 2) should prevent us from blaming one social group alone and must not divert our attention from the necessity of developing new labour market policies. In addition, the relationship between economic growth and an improvement in the labour market seems to become weaker for various reasons. Whereas the labour market responded positively to economic recovery with a time lag of only half a year in the 1960s, so far the recent economic upswing, developing since 1983, has produced virtually no positive labour market effects. None of today's forecasts expect marked improvements in the labour market situation in the near future. In short, the nature of unemployment is becoming less cyclical and more chronic. Today's economic growth (already at a considerably lower level than that of the 1960s) is about to change into a "jobless growth." Probably more than various other factors, the so-called labour-saving "new technologies" are contributing to the fact that growing investment and production

The Functioning of Institutionalised Forms of Workers' Participation

89

Table 1: Federal Republic of Germany: Labour Market Situation, 1 9 7 0 - 8 5 ('000) Annual average

Labour force

Gainfully employed persons

Registered unemployment

Hidden reser

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983(1)

26709 26934 26983 27212 27284 27245 27139 27127 27276 27 496 27762 28068 28 355 28 565 28745 28765 28775

26560 26721 26661 26849 26497 25746 25 530 25490 25 644 25986 26251 26048 25 572 25126 25126 25226 25 376

149 185 246 273 582 1074 1060 1030 993 876 889 1272 1833 2258 2270 2200 2120

28 76 90 205 425 549 607 639 634 622 748 950 1181 1349 1339 1279

1 9 8 4

(2)

1 9 8 5

(3)

1 9 8 5

(4)

Notes: (1) Preliminary. (2) Estimate. (3) Estimate for 2 per cent real economic growth and 1.5 per cent reduction of annual working time per employed person. (4) Estimate for 3 per cent real economic growth and 1.2 per cent reduction of annual working time per employed person. Source: Federal Employment Agency Statistics (MittAB 4/84).

Table 2: Unemployment Rate: Selected Countries 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 West Germany Austria France Italy Switzerland United Kingdom

1.2 1.2 2.6 6.4

2.7

2.6 1.3 2.8 5.4

2.7

4.7 2.0 4.1 5.9 0.3

4.6 2.0 4.4 6.7 0.7

4.5 1.8 4.7 7.2 0.4

4.3 2.1 5.2 7.2 0.4

3.8 2.0 5.9 7.7 0.4

3.8 1.9 6.3 7.6 0.2

5.5 2.4 7.3 8.4 0.2

7.5 3.7 8.0 9.1 0.4

9.1 4.5 9.9 0.9

1.2

4.1

5.7

6.2

6.1

5.7

7.4

11.4

...

13.1

13.1

9.1

Source: ILO Yearbook of Labour Statistics; ILO Bulletin of Labour Statistics Supplement 2, Geneva: ILO, 1985.

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Günter Endruweit and Gerhard Berger

do not lead to an improved employment situation. The widespread introduction of "high technologies" into core branches of industry, (e. g. the metal industry) and also the tertiary sector, are offering productivity gains and dramatically reducing labour demands. At the same time, the introduction of "new technologies" in most cases induces changes in working conditions and work content. Up to now, only the more farsighted employers have recognised and used the potential which high-technology production concepts offer in order to offer highly qualified jobs, to enable the employees to qualify for these jobs by better training schemes, and to improve productivity at the same time. Therefore, it is not surprising that during the 1970s and early 1980s an increasingly pressing need for action was felt by the unions (e.g. leading towards the "rationalisation protection agreement," see 3.2.2) and by the State (e. g. the "joint action programme for the humanisation of work").

3. The Role of the Parties in Participation 3.1 The Actors The relationship between the actors of the West German industrial relations system is not problem-free. In a wider sense, one has to distinguish between four actors. 5 Their functions and position within the two-level system of workers' participation are outlined in Table 3. At the collective bargaining level, employers' associations face the trade unions. This is mainly based on s. 2, Collective Agreements Act, 1949 (Tarifvertragsgesetz) stipulating that collective agreements can only be concluded between individual employers, employers' associations or the federation of employers' associations, on the one side, and trade unions or federations of unions, on the other. Therefore, while trade unions have a monopoly in this respect (non-unionised employees do not have the possibility of participating in collective bargaining), non-organised employers are allowed to conclude a collective agreement. Nevertheless, the degree of organisation of employers over all branches is probably higher than that of the workers. 6 Collective agreements are concluded at the regional, sectoral or national level. In the arena of co-determination as such, i. e. at the level of the workplace, plant and enterprise, trade unions have to manage without a monopoly. The employer has as his counterpart the works council, representing all employees whether unionised or not (s. 7, Works Constitution Act 1972). Therefore, trade unions try to become the dominating power within the works councils in order to guarantee the full success of their policy. This is the reason why it has been remarked that the works council is in "a distinct borderline position at the intersection of three pressure groups: the workers, the management and the union." 7 For the same reason, the works council has also been regarded as "the third element of the formal organisation" in addition to staff and line organisation. 8 Obviously enough, this can support employers in their efforts to keep trade unions out of the plant. 9 If one assumed, however, that "this situation can no longer be regarded as a sensible way to organise a plant but can only be seen as threatening the integration of a

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-o U 60 UH e O «9 IH 3 5 hours Fig. 1: Full-Time Hours per Week and Frequency of Full-Time Employment Moonlighting

Moonlighters, or multiple job holders, are mostly full-time workers who have a second, part-time job. Just over five percent of all employed persons are moonlighters; this figure has been steady over the last 20 years. The median hours worked per week of moonlighters is 14, which is an increase from the 11 hours of 1960. (See Table 1.) Overtime

An estimated 11 percent of all employed persons work overtime in the U. S. currently. This figure refers to hours in excess of 40 per week for which premium pay is received. The number of overtime hours put in by these workers averages 9.6 per week. No historical data exist for paid overtime hours worked. The incidence of paid overtime working has not changed significantly in the last 25 years. However, if all people who work long hours ( > 4 0 per week) are counted, including those who are exempt from premium pay requirements, a substantially different result is obtained: the trend is a secular decrease of one percent per year in the share of all persons who work long hours (whether compensated or not; currently, about 40 percent of these people receive premium pay). (See Table 1.) Overtime work depends somewhat on the business cycle. During years of recession, the incidence of overtime goes down by about 10 percent.5 Part-Time Employment Part-time employment means employment of 1 — 34 hours per week; currently, about 19 percent of all persons at work are part-time workers. Over the last 30 years, part-time employment has increased as a share of all employment from its

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Stanley D. Nollen

Table 1: Trends in Work Schedules in the United States: Number of Workers and Weekly Hours Work Schedule and Time Period

Full-time employment Number of full-time workers, 1957 — 86 Average weekly hours, 1968 — 86 Number of single-job, straight-time full-time workers, 1963-86 Average weekly hours, 1968 — 86

Current Level

Average Annual Change Hours or % Points Percent

81.3% 43.3 hrs.

-0.25 n. s.

-0.30 n. s.

65.9% 41.4 hrs.

-0.11 n. s.

-0.17 n. s.

n. s. 0.05

n. s. 0.44

n. s. -0.28 n. a.

n. s. -0.98 n. a.

0.26

1.60

n. s. n. s.

3.59 n. s. n. s.

0.19 0.04

-5.44 4.42 0.20

Moonlighting Number of multiple job holders, 1956 — 1985 Median weekly hours, 1960 — 85

5.4% 14 hrs.

Overtime Number of paid overtime workers, 1963 — 1985 Number of workers with long hours, 1963 — 86 Average weekly paid overtime hours

10.8% 27.8% 9.6 hrs.

All part-time employment, 1957 — 86 Number of voluntary and involuntary part-time workers

18.7%

Part-time employment — voluntary Number of voluntary part-timers 1957-69 1970-86 Average weekly hours, 1967 — 86

13.4% 21.4 hrs.

Part-time employment — for economic reasons (involuntary) Number of involuntary part-timers 5.3% 1957-69 1970-86 Average weekly hours, 1967 — 86 22.0 hrs. Notes:

Current level for each variable refers to 1985 or 1986, the year of the end of the time series. Average annual change for each variable is obtained from the value of bj in the regression equations, Yj = a + bjT for average annual change in hours or percentage points log Yj = a + bjT for average annual percent change where Yj are the various measures of working time, and T is time in years. n. s. means that the slope of the fitted trend line is not statistically significantly different from 0; n. a. means that time series data are not available. Full-time employment: The first measure for full-time workers is the number of workers on full-time schedules ( > 3 5 hours per week) as a percentage of all persons at work during the

Changes in Work Time in the United States

255

survey week. The measure for single-job, straight-time full-time employees excludes people with multiple jobs and paid overtime; the current level is also expressed as a percentage of all persons at work. Moonlighting: The multiple job-holding rate is the number of persons with two or more jobs as a percentage of all employed persons. Because the total number of hours worked per week by multiple job holders was 51 to 54 hours over the 1956 — 1986 period, most of these people are full-time workers on their primary job. Moonlighting hours are the median hours worked per week by multiple job holders on their secondary job. Overtime: The number of paid overtime workers is the number of employees who worked 41 hours or more per week and received premium pay as a percentage of all persons at work. Paid overtime hours are the average number of hours worked in excess of 41 hours per week for which premium pay was received by employees who worked long hours. This datum was not tabulated before 1985. Because the number of overtime workers depends on the business cycle, the time trend for this variable was computed from Y = a + bT + cDUM, where DUM is a dummy variable with value 1 for years in which at least one quarter of the year was officially a recession period, and 0 otherwise. The number of workers with long hours refers to workers with 41 or more hours of work per week, whether compensated with premium pay or not. Voluntary part-time employment: The number of voluntary part-time workers is the number of persons at work on voluntary part-time schedules of 1 — 34 hours per week as a percentage of all persons at work in non-agricultural industries. Average weekly hours refer to the same population. The number of voluntary part-time workers for 1966 and earlier is adjusted for comparability with 1967 and later years, when persons aged > 1 6 rather than persons aged > 1 4 were included. Part-time employment for economic reasons: The number of part-time workers for economic reasons is the number of persons at work 1—34 hours per week for economic reasons (involuntarily) as a percentage of all persons at work in non-agricultural industries. Economic reasons are mainly "slack work" and "could only find part-time work." Average weekly hours refer to the same population. The comparability adjustment described for voluntary part-time employment was also made for involuntary part-time employment. Because involuntary part-time employment depends in the business cycle, the time trend for this variable was computed from a time-series that included a dummy variable for recession years, in the same way as the overtime trend was computed. Sources: Full-time employment: The source for the hours and number of all full-time workers is Employment and Earnings, January issues, for 1967 — 86; and U. S. Bureau of Labor Statistics, Handbook of Labour Statistics, Bulletin 2217 (1985) for 1957-70. See below for sources for multiple job holders and overtime workers. Moonlighting: The sources for the multiple job-holding rate are Monthly Labor Review, vol. 109, no. 11 (Nobember 1986), vol. 105, no. 5, May 1982, and U.S. Bureau of Labor Statistics, Special Labor Force Reports, no. 123. The sources for moonlighting hours are U.S. Bureau of Labor Statistics, Special Labor Force Reports, nos. 221, 211, 177, 166, 139, 123, 90, 63, 51, 39, 29, 18, and 9; and Monthly Labor Review, vol. 109, no. 11 (November 1986), vol. 105, no. 5 (May 1982), vol. 103, no. 5 (May 1980), vol. 98, no. 11 (November 1975), and other issues from which Special Labor Force Reports are reprints. The original data are from household surveys. Overtime: The sources for the number of paid overtime workers are Employment and Earnings (January issues of each year) for the number of persons working 41 or more hours; and Monthly Labor Review, vol. 109, no. 11 (November 1986) and U.S. Bureau of Labor

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Statistics, Labor Statistics Derived from the Current Population Survey, Bulletin 2096 (1982) for the proportion of persons working 41 hours or more who receive premium pay. The source for the number of paid overtime hours is Carr, Daniel E., "Overtime Work: An Expanded View," Monthly Labor Review, Vol. 109, No. 11 (November 1986); this study reports the first tabulation to date of the number of paid overtime hours by those who worked long hours. The original data are from household surveys. Voluntary part-time employment: The source for the number of voluntary part-time workers is Employment and Earnings, January issues, for 1967 — 86; and U.S. Bureau of Labor Statistics, Handbook of Labor Statistics, Bulletin 2217 (1985) for 1957-70. The source for the weekly hours of voluntary part-time workers is also 4 — 1.4. Anmerkungen des Herausgebers 22 Employment and Earnings, January issues. Part-time employment for economic reasons: The sources for both the number and weekly hours of part-time employees for economic reasons are the same as the sources for voluntary part-time employment.

1957 level of 12 percent, or at the rate of 1.6 percent per year (see Figure 2 and Table 1). Voluntary Part-Time

Employment

Analysis of changes in part-time employment must distinguish between voluntary part-time that is chosen by workers as a usual and regular work schedule, and involuntary part-time that is taken up by workers for economic reasons such as "slack work" and "could not find a full-time job." Voluntary part-time employment increased as a share of all employment during the 1950s and 1960s at the rapid rate of 3.6 percent per year, but has been roughly constant since then at its current level of 13.4 percent of all persons at work. Involuntary Part-Time

Employment

Here an opposite picture appears: involuntary part-time employees decreased as a share of all persons at work by 5.4 percent per year during the 1950s and 1960s, but have been increasing since then at a 4.4 percent per year rate. Like overtime, involuntary part-time employment responds to business cycles; the changes reported here are secular trends that account for cyclical effects of recession years (see Table 1). The number of hours worked by part-time employees is about 22 per week for both voluntary and involuntary part-timers, and has been roughly constant for the past 20 years for voluntary part-time employment. Involuntary part-time hours have increased slightly over time (see Table 1). Overall Trends in Weekly Work Time A complete analysis of trends in weekly work time requires that changes in the number of people who follow each type of work schedule be combined with changes in the hours that they work on these schedules. The product is a weekly hours

257

Changes in Work Time in the United States 25.0 22.5 20.0

17.5 /

15.0

percent working p a r t - t i m e

12.5 10.0

j i i I i i i i I i i i i I i i i i I i i i i I i i i i i 1960

1965

1970

1975

1980

1985

— Part-time employment (1 — 34 hours), % of all persons at work — Part-time hours per week, all persons at work 1—34 hours Fig. 2: Part-Time Hours per Week and Frequency of Part-Time Employment

"weight" for each work schedule that shows weekly hours per worker overall. These weights show the contribution made by each work schedule to the total hours worked per week by the average (synthetic) worker. They show the importance of full-time employment, part-time employment, moonlighting, and overtime in total work time.6 The results of this analysis reveal four main trends. First, weekly work time from single-job, straight-time full-time workers (considering both the number of these workers and the hours they work) has declined somewhat, about —0.4 percent per year since 1968. But the pronounced decrease in weekly work time by these people during the 1980 — 82 recession years has been almost completely recovered. Second, work time from part-time employment has increased substantially over this period, at the rate of 1.5 percent per year. Most of this increase is accounted for by the growth of involuntary part-time employment, which has risen by 4.6 percent per year. However, the uptrend in work time from part-time employment stopped in 1982. Third, neither moonlighting nor paid overtime has changed significantly in its importance to weekly work time overall. Considering both their incidence and their weekly hours, and accounting for the effects of recession years, worktime from moonlighting and overtime has remained unchanged over the last 20 years. Fourth, the net effect of changes in all work schedules yields a trend for average weekly work time per employed person that is slightly downward since 1968, less than —0.2 percent annually (see Table 2). Thus the decline in work time from fulltime single-job straight-time workers is about half offset by the increase in work time from part-time (especially involuntary part-time) employment. Of the average work week of 39.2 hours per worker overall in 1985, full-time single-job straight-time employment accounts for 33.3 hours. Part-time employment accounts for 4.0 hours, and overtime contributes 1.1 hours and moonlighting adds another 0.8 hours.

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Table 2: Trends in Weekly Work Time in the United States Work Schedule

Hours per week contributed by work schedule

Average annual percent change

Full-time single-job, straight-time work, 1968 — 85 Moonlighting, 1960 or 1967-1985 Paid overtime, 1966 or 1970 to 1986 Part-time employment, 1967 — 86 Voluntary part-time employment Part-time employment for economic reasons (involuntary)

33.3 0.8 1.1 4.0 2.9

-0.38 n. s. n. a. 1.50 0.54

1.2

4.60

Work time of all persons at work, 1968 — 85

39.1

-0.18

Notes: Hours per week and changes in work time for each work schedule combine the effects of the number of people using each work schedule and the average hours per week by those workers. n. s. means that the time trend is not statistically significantly different from 0. n. a. means that data are not available to calculate a trend line. Changes in work time due to involuntary part-time employment account for the effects of recession years and thus reflect secular, not cyclical changes. See notes to Table 1. The trend in work time due to paid overtime is not shown because time series data on average weekly paid overtime hours are not available for the entire work force. However, such data are available for manufacturing production workers (who account for less than one-fifth of the labor force). The paid overtime trend for this segment of the work force is upward sloping from 1956 — 66 at the rate of 2.7 percent per year, and downward sloping from 1966 — 86 at the rate of —0.6 percent per year. However, the downward trend ceased after 1970, and no significant time trend can be shown from 1970 — 86. The effect of recession years is accounted for in this analysis. Sources: See Table 1.

III. Changes in Annual Work Time Knowledge about trends in the number of hours people work in a week such as reported above needs to be supplemented with information about how many weeks people work in a year. Annual work time, which is the product of hours per week and weeks per year, is the more complete measure of work time. Only 38 percent of the people who are part-time employees during a survey week work year-round (50—52 weeks per year); among full-time employees, 75 percent work year-round. Moreover, for both full-time and part-time employment, year-round work has increased somewhat while part-year work has decreased. Simply multiplying average weekly hours by 52 weeks per year is not a satisfactory way to compute annual work hours. Labor force entry and exit, unemployment, and turnover during the year all reduce annual hours worked below the total implied by weekly hours worked.

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Table 3: Trends in Weeks Worked Per Year in the United States Work Schedule

Current Level

Average Annual Change Weeks Percent

All people with work experience, 1957 — 86 Full-time workers, 1957 — 86 Part-time workers, 1 9 5 7 - 8 6

42.5 weeks 43.3 weeks 39.2 weeks

0.06 0.09 n. s.

0.14 0.22 n. s. Current Level

Full-time year-round employment: number of full-time workers who worked 50 —52 weeks per year Part-time employment: Number of part-time workers who worked 50 — 52 weeks per year

75.1% 37.9%

Notes: See notes to Table 1 for the method of calculating average annual percentage changes. The current level data in the bottom panel refer to percentage of all people with work experience during the year on full-time and part-time work schedules, respectively. The original data source is the Current Population Survey. The data cover all people who worked during the year, and thus include labor force entrants and leavers, and unemployed people; the effects of turnover are also reflected. Sources: U.S. Bureau of Labor Statistics, Handbook of Labor Statistics, Bulletin 2217 (1985), and Smith, Shirley J., "Work Experience of the Labor Force During 1985," Monthly Labor Review, vol. 110, no. 4 (April 1987).

Weeks Worked Per Year The average work year was 42.5 weeks in 1985; full-time workers spent 43.3 weeks at work on the average while part-timers worked 39.2 weeks per year. The average work year increased by exactly one week since 1968; for full-timers, the increase was greater while for part-timers there was no significant change (see Table 3).7 Annual Hours Worked When both the average hours per week and the average weeks per year actually worked by people on all work schedules are considered, the trend in annual hours worked can be ascertained. This trend is flat — no decrease is evident since 1968; annual hours per worker are the same now as nearly 20 years ago. Full-time workers, including those with overtime and second jobs, worked 1,872 hours per year on the average in 1985; this total is the highest recorded for many years. Parttime workers spent 841 hours per year at work on average in 1985. The overall average annual work time was 1,665 hours per worker. (See Figure 3 and Table 4.)8 Paid Time Not Worked The amount of time for which firms pay exceeds the time that workers actually spend working because of a variety of paid leaves. The main type of paid time that is not worked is vacation time, which averaged 104 hours per year per worker in

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hours 1700 all

1450

workers

1200

950

700

p a r t - t i m e workers

68

70

72

74

76

78

80

82

84

86 Year

(calculated from data on average weekly hours worked and estimated average weeks worked per year) Fig. 3: Annual Hours Worked

1985, or about 2f weeks. Holiday leave was 61 hours per worker or about 7.6 eight-hour days. Paid sick leave was 28 hours per year and all other paid leaves totaled 10 hours per year. All paid leaves taken together amounted to 203 hours or about 5.2 weeks per year.9 The trend in paid time not worked was quite steeply upward sloping from 1957 to 1975, rising at an annual rate of 3.8 hours or 2.2 percent per year. All types of paid leave increased during this period. Since then, however, firms have decreased paid leave time at an average annual rate of — 1.4 hours or — 0.7 percent per year. The decrease has come mainly from holiday leave, whereas neither sick leave nor other personal leaves have decreased. Nevertheless, paid time that is not worked is currently still above its 20-years-ago level. One other form of time that firms pay for but which is not worked is paid rest periods, lunch time, travel time, and clothes-changing and wash-up time. These types of paid time also increased from 1957 to 1975 and decreased thereafter. Since this paid unworked time applies mostly to non-exempt production workers but not the entire workforce, it is not considered further.

Annual Paid Time

Adding paid time not worked to the hours actually worked in a year by the average worker gives a measure of annual paid time, the indicator relevant to labor cost for firms and well-being for workers. No statistically significant time trend can be seen in annual paid time since 1968. However, the figure for 1985, which is 1,868 hours, is higher than any other year in this period. The increase in paid leave time up to 1975 and the recent uptrend in annual hours worked combine to yield more paid hours per worker than at any other point in recent years.

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Table 4: Trends in Annual Hours Worked and in Annual Paid Time not Worked Type of Paid Time not Worked

Current Level

Average annual hours worked per worker, 1968 — 85 All workers 1,665 hrs. Full-time workers 1,872 hrs. Part-time workers 841 hrs. Average annual hours paid per worker, 1968-85 1,868 hrs. Total paid unworked time, 1985 1957-75 1977-85 Paid leave time, 1985 1957-75 1977-85 Vacation leave, 1985 1957-75 1977-85 Holiday leave, 1985 1957-75 1977-85 Sick leave, 1985 1957-75 1977-85 Other personal leave, 1985 1957-75 1977-85 Other paid unworked time, 1985 1957-75 1977-85

Average Annual Change Hours Percent n. s. n. s. n. s.

n. s. n. s. n. s.

n.s.

n.s.

3.81 -1.39

2.16 -0.68

1.39 n. s.

1.47 n. s.

1.12 -1.42

1.90 -2.19

0.97 n. s.

8.88 n. s.

0.32 0.25

5.08

277 hrs. 203 hrs. 104 hrs. 61 hrs. 28 hrs. 10 hrs. 75 hrs.

Notes:

See footnote 8 in the text. Source:

U.S. Chamber of Commerce, Employee Benefits, annual or biannual issues from 1957 — 85, a n d U . S . C h a m b e r of Commerce, Employee Benefits Historical

Data, 1951 — 79 (1981).

IV. Summary Work time per worker in the U. S. has not decreased from its level of 20 years ago, and is not decreasing currently. Hours actually worked in a year by workers on the average are the same now as in the past. Annual paid time is higher than the 20-years-ago level. A small decline in weekly work time per worker is offset by an increase in weeks worked per year per worker, leaving annual work time unchanged. An increase in paid leave time over many years makes annual paid time higher.

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A work time trend that appeared to be slightly downward sloping, and which understandably was more pronounced during the 1980 — 82 recession years, has been reversed. Increases in work time per worker, not decreases, have been registered since 1982 so that recession-induced losses have been more than made up. Full-time and part-time employment show different trends. Full-time employment had shown decreases in annual work time whereas work time from part-time employment had been increasing. However, in recent years, full-time employment has been growing in annual work time per worker, while part-time employment has levelled off. The facts of U . S. work time trends contrast with the impression of reduced work time among European workers. Substantial growth in the number of people employed in the U . S. has not come about because of less work time by the average worker. In fact, annual paid time per worker is at historically high levels. Furthermore, the feeling of shrinking leisure time that many workers report is confirmed by these trends. American workers are working more. Notes 1 The reduction of the workweek from 40 to 38.5 hours for the large membership of the metalworkers union in Germany and the increase to five weeks of paid vacation for workers in France are two examples. Employment-generating effects of actions such as these are mixed, however. 2 For example, a recent Harris Poll shows a 30 percent drop in the amount of leisure time for the average American worker over the last decade, according to self-reports. However, only eight percent of workers in a 1985 survey would prefer to work fewer hours at correspondingly reduced pay. See Shank (1986). Owen (1979) and Levitan and Belous (1977) have previously called attention to the decline in leisure time. 3 See the References for citations for this literature; the main studies are also characterized further in the text. 4 Trend lines and rates of change in this study are determined by regressing the work time variable on time. Because the start and end date of the time series differ for most variables, and because some work time variables are sensitive to the business cycle, it is inadvisable to report simple start-to-end changes. See details in the notes to Table 1. 5 To separate cyclical effects from the secular time trend, a dummy variable for recession years was used in the regression of overtime incidence on time (see the notes to Table 1 for details). 6 For example, part-time hours per (all) worker(s) is calculated as 22 hours per week for part-timers x 0.19 share of part-timers in all employment = 4.2 hours of part-time employment per average worker. 7 Time series data exist on the percentage of full-time and part-time workers who work 50 — 52 weeks, 27—49 weeks, and 1—26 weeks per year. Using the midpoint of these intervals for all years (which implicitly assumes no change in the distribution within each interval), an average of weeks worked per year can be calculated. 8 See Smith (1983) for a previous estimate of annual hours of work for the years 1977,1979, 1980, and 1981 using a similar methodology. Her estimates are 65 — 70 hours higher than those in this paper, but the year-to-year changes are about the same. Greis (1984) reaches a different conclusion about the trend in annual work hours, but her analysis begins with 1947 and ends with 1978 and applies only to full-time production and nonsupervisory workers. She also assumes that all of these people work 52 weeks per year.

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9 These figures refer to non-exempt employees in all private sector industries. The data source is a national survey conducted by the U. S. Chamber of Commerce among firms that use payroll records as their basis of response. The exclusion of exempt and public sector employees reduces the survey coverage to roughly half the labor force. However, the survey has been conducted in identical form for over 30 years, which makes it an attractive time series data set. The simple correlation between these data and another main data source from the U. S. Bureau of Labor Statistics (now discontinued) is high (r = 0.92). Since the U. S. Chamber of Commerce survey reports paid leaves as dollars per year per employee, paid time not worked expressed as hours per year per employee was calculated using average hourly earnings data from the same survey.

References Americans and the Arts (1984): (a survey conducted for the American Council on the Arts), New York: Lou Harris & Associates. Carr, Daniel E. (1986): Overtime Work: An Expanded View, Monthly Labor Review, 109, 11 (November). Greis, Theresa Diss (1984): The Decline of Annual Hours Worked in the United States Since 1947, Philadelphia: Industrial Research Unit, The Wharton School, University of Pennsylvania. Kunze, Kent (1984): A New BLS Survey Measures the Ratio of Hours Worked to Hours Paid, Monthly Labor Review, 107, 6 (June). Levitan, Sar A. and Belous, Richard S. (1977): Thank God It's Thursday, Across the Board, 14, 3 (March). The November 1986 issue of the Monthly Labor Review has a special section consisting of nine articles on aspects of work time. Owen, John D. (1979): Working Hours: An Economic Analysis, Lexington, Mass.: Lexington Books. Owen, John D. (1986): Working Lives: The American Work Force Since 1920, Lexington, Mass.: Lexington Books. Shank, Susan E. (1986): Preferred Hours of Work and Corresponding Earnings, Monthly Labor Review, 109, 11 (November). Smith, Shirley J. (1983): Estimating Annual Hours of Labor Force Activity, Monthly Labor Review, 106, 2 (February). Smith, Shirley J. (1987): Work Experience of the Labor Force During 1985, Monthly Labor Review, 110, 4 (April). See also sources listed in Tables 1 —4 for additional data references.

Chapter IV Co-Operation and Conflict in Public Service Labour Relations

Introduction Jack Stieber

Definition of Public Service For purposes of this chapter, the "public service" is defined as government activities in the "administration of the State or political subdivisions thereof, excluding government owned enterprises engaged in industrial and/or commercial activities." The authors of the following essays have generally adhered to this limited definition, though they did not all interpret "public service" in the same way. Thus, the essay on Canada excludes health and welfare and postal service employees, which together employ 1.2 million as compared with less than 1 million employees in other public service activities. The Japanese essay includes employees of government enterprises and public corporations, although the scope of the public sector has been narrowed in recent years as a result of the transfer of some enterprises from public to private ownership. In West Germany, railway employees are included as public service. It also appears that the definition of "public service" in the essay on Israel was much narrower than in other countries.

Distribution and Composition of Employment Because of different definitions of public service, direct comparisons of the proportion of public to total employees is difficult. However, it appears that Nigeria, with 30 percent of modern sector wage employment in the civil service, has the highest proportion, while the United States, Canada, Australia and West Germany each have from 17 to 20 percent of their labor force in the public sector. Public service employees are distributed differently among countries as between various levels of government. In the United States, public employment is heavily concentrated at the local level with 60 percent of all government workers; state employees comprise 23 percent; and federal employees 17 percent of the total of 16 million (excluding the armed services). This distribution is heavily influenced by the fact that education, police and fire protection are administered by local governments. Canada, Australia, West Germany and Nigeria, which also have federal systems of government have most public service employees concentrated at the state, provincial or territorial level, ranging from over 60 percent in Australia and Nigeria to 40—50% in Canada and West Germany. In Israel all government activities in the administration of the state are conducted at the national level. This excludes employees in independent agencies, government corporations, municipal authorities and Histadrut union-owned enterprises.

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Women constitute a significant proportion — 40 to 50 percent — of public employees in all countries. Almost without exception women tend to be concentrated in lower paying jobs. In Australia there were no women serving as Permanent Heads of Ministerial Departments in the Federal public service as of 1984; 4 percent were in executive or professional functions, 29 percent served as specialists, administrative and clerical staff, and 48 percent as typists, secretaries and clerical assistants. Until 1966 federal legislation barred women from pursuing a career after marriage. This prohibition was lifted in 1975. In West Germany over 86 percent of part-time employees in public service are women and a very high proportion are employed in secretarial and office positions. In recent years pay of women in public service relative to that of men has improved more than in private employment. This is ascribed to political pressure to provide equal pay for identical jobs regardless of sex. In Canada women have a low representation in managerial and technical positions and an overwhelming presence in clerical occupations. In Israel, where women comprise more than half of public service employment, they are also heavily concentrated in the lower pay ranks. However, in certain technical and professional occupations, Israeli women appear to be predominant e. g. physiotherapists, microbiologists and medical chemists, pharmacists, lawyers and paramedical workers. Based on the country essays and attendant commentaries, it appears that women in most countries have fared better in government than in private sector employment, both with respect to wage levels and promotion to responsible positions. In no country, however, have women achieved equality with men and much remains to be accomplished before discrimination is entirely eliminated. The lower level of sex discrimination in government employment appears to be due, in part, to the civil service procedures with their emphasis on merit in appointments and the political influence of women as voters.

Unionization Density of union membership is, for all countries, almost as great or greater in the public services than in the private sector, ranging from 35 percent in the U. S. A. to 65 — 75 percent in West Germany, Australia and Canada. In Israel 85 percent of all employees belong to unions, with no distinction between private and public employees. Over 50 percent of civil servants in Nigeria are union members. Union membership does not necessarily or even generally indicate union strength. Thus, public sector membership density in most countries is larger than in the private sector, but public employee unions are generally considered to be weaker than unions in the private sector. This occurs for a variety of reasons: restrictions on certain employees joining unions, the limited scope of bargaining and, most important of all, prohibitions or serious limitations on the right to strike. Union structure follows no single pattern in the countries concerned. Unions organized on an occupational basis cutting across departmental lines and sometimes also across levels of government and even across the private and public sector are most common. However, almost every country has exceptions to this principle of

Introduction

269

organization e. g. Treasury and Postal employees in the United States are industrial type unions and several predominantly private sector unions have become active in organizing public employees; in Canada each of the three largest unions is dominant at a single level of government and public employee unions are organized on both industrial and craft lines; in West Germany, public employee unionization does not follow the private sector model of industrial unionism with a number of unions being organized according to professional status or ideological persuasion. Australia is notable for having some 100 small unions organized on a craft or occupational basis and overlapping all three levels of government. The result is a multiplicity of unions in many government functions. Israel follows the predominant principle of occupational unions which represent both private and public employees, all of which are part of the national Histadrut organization. Nigeria, like West Germany, departs from the private sector pattern of industrial unions in favor of eight civil service unions organized along occupational lines. Experience in most countries appears to support the view that public employees are easier to organize than employees in the private sector. Among the reasons advanced for this phenomenon were: a) Absence of opposition to organization and even support of efforts to unionize by government authorities as compared with private sector employers; b) Less professionalization of the personnel and human resources function in public employment leading to greater acceptance by employees of unions; c) Politicization of the personnel function leading to abuses and employee dissatisfaction which makes government workers seek unionization. There is no evidence that the structure of unions has much to do with their effectiveness. Examples of effective unions were found among unions which represent exclusively public sector employees as well as those which organize both public and private sector workers in the same organizations.

Employer Representation Management representation in negotiations with public employee unions ranges from a high degree of centralization in West Germany to almost complete decentralization in the United States. Other countries fall somewhere in between these two extremes. The importance of management representation must be considered in relation to the scope of bargaining which is discussed below. In West Germany, state, lander and local employers bargain through employer associations with the stated objective of achieving a high degree of uniformity in working conditions of government employees across state and local jurisdictions. Representatives of management at all three levels local, state and federal meet to arrive at a common negotiating position. The Federal representatives play a leading role in resolving internal differences. In sharp contrast is the situation in the United States. At the Federal level where bargaining is limited to non-wage issues, negotiations on working conditions are carried on separately and with little coordination by individual departments or agencies and their respective unions. Of the 50 states, 43 had a labor relations

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policy which involved either collective bargaining or "meet and confer" arrangements with organizations representing employees. In states that engage in collective bargaining there is a wide variety of management representation structures. In Michigan, for example, management is represented by the Office of the State Employer which negotiates with unions organized across occupational lines. In Canada, negotiations at the Federal level are handled by the Treasury Board, a senior level cabinet committee which controls the budget. Provincial governments, except for Quebec, designate a specialized agency to deal with unions. At the municipal level, practice varies with larger cities using professional negotiators and smaller cities relying on elected officials. In general politicians are rarely involved in negotiations. In Australia, Public Service Boards consisting of three members are the main bargaining representatives at the Federal level and in each of the states. Local labor relations with unions are conducted by elected officials. Police and education functions are administered by the federal and state governments, respectively. A Public Service Commissioner is in charge of public service relations in Israel. This official, together with the Director General of the Finance Ministry and other officers, represents the Government in negotiations on wages, salaries and working conditions. In Nigeria, negotiations are conducted by the Establishments Departments of Federal and State Civil Services through three National Public Services Councils which meet with eight unions. Council I deals with the largest union, the Association of Civil Servants representing supervisory and middle management employees; Council II negotiates with two unions of clerical, administrative and secretarial unions; and Council III meets with five unions representing non-clerical civil servants. But the real negotiations take place at the Federal level between the Federal Civil Service and top union officials. Because representatives of employees in Council I often serve as management representatives in negotiations at Councils II and III there is a serious conflict of interest. Concessions made to unions in Councils II and III are always extended to Council I. This of course limits the role of collective bargaining in the civil service. Government employers in almost all countries are represented in collective bargaining by professionals and appointed administrators. In general there is wide consensus that elected officials should not be involved in negotiations because they are inclined to let politics influence collective bargaining, leading to outcomes which are designed to favor their political future rather than the public interest. However, it was also recognized that it is not possible to completely remove collective bargaining from politics since elected officials control budgets which circumscribe the limits of negotiated settlements. It is also inevitable that government will intervene in disputes which threaten health and safety or otherwise significantly affect large numbers of people. This latter role is generally more appropriate for elected officials than would be their direct involvement in negotiations.

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271

Regulation of Collective Bargaining Most countries have special legislation governing labor relations for public employees. Collective bargaining is generally more circumscribed than in the private sector with prohibitions or restrictions on the right to strike, limitations on negotiating over management rights, and absence of negotiations over benefits provided by legislation. The United States is an example of a country with substantial restrictions on public employee bargaining. At the Federal level, public employees, excluding postal workers, may not bargain over pay, pensions and other economic benefits, and management rights. Strikes are prohibited and disputes are resolved by an appointed body, the Federal Service Impasses Panel. Some two-thirds of the states have collective bargaining statutes, though some employee groups are excluded from collective bargaining under some states laws, which also apply to local employees. With some exceptions, strikes are prohibited or severely limited, and compulsory arbitration is used to resolve disputes involving police, firefighters and occasionally other employees in some states. Canada follows three models of labor relations for public employees. The "private model" found in only one province grants to municipal employees the same rights to bargain, including the right to strike, as is available to private sector employees. The "modified private sector model," followed in two provinces, excludes pensions and merit systems from bargaining and circumscribes the right to strike. The most common approach, called the "restricted model," applicable to eight provinces and the Federal Government, limits the scope of bargaining on such matters as grievances, technological change and layoffs, and prohibits or strictly limits the right to strike. West Germany has two labor relations systems for public service employees. Non-civil service employees have the same legal rights to collective bargaining as private sector employees. Civil Servants (Beamte) are not accorded collective bargaining rights and strikes are prohibited. Parliament determines pay schedules of civil servants at all levels of government and there is a high degree of uniformity in outcomes for all civil servants. In Japan national and local government employees, excluding police, firefighters, and jail employees, have the right to organize. The union shop and closed shop are prohibited. Bargaining is limited to working conditions and does not apply to administration and managerial issues. Strikes are prohibited. Australia, Israel and Nigeria are examples of countries where public and private employees are treated very much alike, but for different reasons. In Australia all bargaining takes place within the context of a national and state system of conciliation and arbitration which is administered by appointed tribunals. The so-called "hard" issues usually end up in arbitration. Some states prohibit strikes, others permit strikes only after notice periods have been observed, and a few states ban strikes in essential industries. Many issues are covered by law and are not subject to bargaining. In Israel bargaining is not permitted for any employees on matters covered by law including hiring, retirement benefits, discipline procedures and a number of

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fringe benefits. In recent years, the Government has developed a national wage policy which is applicable to all employees. Disputes are resolved by conciliation and arbitration procedures developed jointly by the national labor federation and the Government. In Nigeria laws on labor relations apply to both Federal and State levels. Most issues are regulated by civil service rules and regulations. There is a strong predilection for the Federal Government to regulate conditions of employment through semi-political wage commissions and tribunals, leaving little room for real collective bargaining.

Strikes and Other Industrial Action One thing stands out clearly from the country essays: regardless of the nature or extent of legal prohibitions against strikes by public employees, work stoppages and other forms of industrial action do occur in public employment. Because of the decentralized system of collective bargaining, the United States has had considerable opportunity to experiment with different ways of avoiding public employee strikes and of resolving such actions when they occur. Among the methods tried are outright prohibition of all strikes, allowing strikes for selected employee groups, and acceptance of the de facto right to strike even though strikes are prohibited by law. Ninety percent of all strikes occur at the local level, which is not surprising since about 90 percent of all public employee negotiations take place in local governments. Strikes peaked in 1979 — 80 and have declined since then. Most strikes involve disputes over pay, though other issues peculiar to certain occupational groups may also be important. The ratio of work days lost to work days available due to public employee strikes is much lower than in the private sector due to the shorter duration of public sector stoppages. The most effective way to avoid public employee strikes in the United States has been to prohibit them by law and to provide for compulsory arbitration to resolve the dispute. This arrangement has been most prevalent for police, firefighters and occasionally for other groups of employees. Prohibition alone without alternative final and binding dispute resolution procedures have not succeeded in preventing strikes. There is a growing recognition that public employee strikes are tolerable, even though inconvenient. Indeed, public employers at the local level are inclined to prefer legalizing strikes rather than being subjected to compulsory arbitration, which they believe works to the advantage of unions. Canada is more tolerant of public employee strikes than its neighbor to the South. No provincial government has completely banned such strikes for all public employees. Where strikes are prohibited, arbitration is required to resolve disputes. Strikes occur less frequently and affect proportionately fewer workers than in the private sector. As in the United States, public employers are more opposed to arbitration as a way of resolving disputes than the unions with which they negotiate. Contrary to much preconceived expert opinion, arbitration and collective bargaining have been found to be able to co-exist in Canada. Unlike almost all other industrialized nations, West Germany has no formal system of conflict resolution in either the public or private sector. Interest disputes

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are settled by collective bargaining or industrial action. Civil servants are prohibited from striking and they work through the political process. Grievance disputes are dealt with by staff councils and, if necessary, the courts. Strike substitutes including go-slow and work-to-rule are more common than outright work stoppages. These actions occur only at the local level and are generally over the issue of pay. Australian experience follows that in the United States and Canada in that strikes occur less frequently and are of shorter duration in public than in private employment. There has been a noticeable increase in strike actions in recent years involving particularly teachers, prison officers, hospital attendants, nurses and even doctors. As in West Germany, though much more frequently, industrial action takes the form of banning certain work and resorting to other strike substitutes. This was recently illustrated when tax department employees placed a ban on collection of revenues. Japanese unions fought many years to delete the public employee no-strike law which was introduced after the war by the Occupation Forces. After a political strike aimed at legalizing strikes in public employment proved unsuccessful, the unions appear to have given up on this issue. However, this did not mean the end of strikes and other forms of industrial action. Indeed the propensity of public employees to strike is reported to be higher than in the private sector. This is ascribed to the hostility between employee unions and government, the monopoly status of government activities, and the relative job security of public employees. Partial strikes are used by civil servants in Israel much more frequently than total work stoppages. Public employee strikes, when they occur, tend to be of short duration with 80 percent lasting less than six days. Public services are not much affected by strikes because the Government issues an emergency order for a certain number of workers to return to work in order to provide essential services. In Nigeria strikes are prohibited but no effective settlement procedures are provided to resolve public employee strikes when they do occur. Unions have learned that the best and quickest results are achieved by violating the no-strike law with spontaneous actions and have acted accordingly. Country reports and debates on the subject indicate that public employee strikes are treated differently in most countries than strikes in the private sector. In some countries strikes of all government employees are prohibited while in others only stoppages of certain specified essential employees are illegal. However, regardless of government policies and laws, strikes by public employees do occur in all countries. There appears to be among commentators a strong opinion in favor of making little or no distinction regarding the legality of strikes based on type of employment. Experience seems to indicate that most public sector strikes can be tolerated as well as those in the private sector. Indeed, some strikes in private employment can have a more serious effect upon the public than strikes by government workers. If any group of employees is to be singled out for strike prohibition, it is those involved in protective functions e. g. police and firefighters. Experience indicates that, if strikes are prohibited, there must be a procedure to resolve disputes. Absent such a procedure, public employee strikes will occur regardless of law, public opinion or restrictive measures.

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Cooperation The country essays indicate that cooperation between unions and governments is reflected primarily through collective bargaining and the resolution of grievances. More advanced forms of cooperation such as quality of worklife programs, job enrichment, and according workers a voice in decision making are either nonexistent or in very early stages of development. In the United States cooperation most often (5 — 20% of all agreements) takes the form of labor-management committees on safety, productivity, education, etc. These committees usually are advisory rather than decision-making bodies. Since most examples of cooperation are "self-reported" by the parties, it is likely that successful programs are more often publicized than failures. There has been no apparent trend toward increased labor-management cooperation in Canada and active mechanisms to promote cooperation are rare. Among the reasons for the lack of interest in cooperative ventures are the limited scope for bargaining over such issues as technological change, deterioration in the public sector labor relations climate in the 1980s due to budget stringencies, and absence of motivation to cooperate such as exists in the private sector where parties feel they must work together for mutual survival. In West Germany, worker participation through codetermination and staff councils are mandated in the public sector as in the private sector. Productivity agreements are not normally found in either the public or private sector. Staff councils deal with such matters as work scheduling, rest periods, holiday schedules, hiring, promotions, discipline and discharge. In Australia cooperation takes the form of consultation through joint councils. There is no evidence that such cooperation has succeeded in increasing productivity, reducing strike activity, or decreasing grievances. In the Federal Service and in two states, departments have been instructed to develop industrial democracy plans and programs for worker participation. Israel has Joint Productivity Councils composed of equal labor and management representatives to try to increase productivity and promote incentive pay. The Histadrut and the government cooperate on interest disputes and redundancy measures. Japan reports worker consultation programs in some departments and examples of cooperation to plan for the introduction of automation, especially as it may affect employment. There appears to have been less experimentation in most countries with various forms of cooperation in government than in the private sector. Conflict is generally more prevalent than cooperation between labor and management. Reasons put forward for the reluctance of unions and government employers to introduce participatory and cooperative arrangements included the absence of market forces and competitive pressures and the lower level of professionalization of the human resources function in the public sector. In any event, it is generally recognized that labor-management relations in both the private and the public sector is still characterized in all countries as more adversarial than cooperative in nature.

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Outlook for the Future In every reporting country the outlook for the future of public sector industrial relations depends heavily on the state of the economy and political developments. In the United States public sector labor relations in the 1980s have been more stable than union-management relations in the private sector. State and local governments have generally been under fewer constraints than the Federal economy where deregulation, huge deficits and a private enterprise minded administration have worked to the disadvantage of Federal employees. Collective bargaining in government is expected to continue to be more adversarial than cooperative. Major issues include conflicts between union demands for higher pay and improved benefits and taxpayer resistance to taxes to pay the bill, continuation of the controversy over "comparable worth" which calls for women to be paid the same rate as men for jobs of similar value, and dissatisfaction of Federal employees with excluding pay and other benefits from the scope of bargaining. The future of Canadian industrial relations will depend on political developments. The expiration of controls over the economy which were prevalent in the 1970s should see a return to bona fide negotiations. An alternative scenario might see legislation to rescind rights granted to public employees in the 1960s. This has already occurred in Quebec, where 1985 legislation has tied public employee compensation to that in the private sector, placed limits on the right to strike, and required partial decentralization of collective bargaining. If other provinces follow this example, unions are expected to react to this intrusion of politics into labor relations in a militant and confrontational manner. West Germany has witnessed large budget cuts in the 1980s resulting in freezes on hiring, delays in salary adjustments, and lowered entry salaries at upper occupational levels. This had lead to threats of industrial action by unions, which thus far has not erupted into strikes as have occurred in other European countries. The public sector has kept pace with the private sector in Australia in pay and conditions of employment. Therefore there is no reason to expect increased industrial unrest among public employees. This expectation is heightened by improved machinery for cooperation and the continuation of a system of wage determination which insures that public employees will not lag behind those in the private sector. Overall the current industrial relations situation is expected to continue for the rest of the 1980s. The highly volatile issue of prohibiting strikes in public employment in Japan is expected to be eased by privatization of the Tobacco monopoly, Telecommunications, and the Railways. These employees will then have the right to strike. Left unanswered is the question of the remaining public employees and their attitude towards the continuing strike prohibition. The future of industrial relations in Nigeria is described as "bleak." This follows from the increasing predilection of government to determine wages and employment conditions by legislation, executive action, and civil service circulars rather than collective bargain. A bright spot is the tendency for state governments to depart from the unified salary system in favor of decentralized wage structures geared to ability to pay. To the extent that this development is accompanied by negotiations

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over wages and conditions of employment, this will be an improvement over Federally determined conditions with little or no involvement of government unions. The Israeli economy is at a crucial turning point and it is difficult to predict whether the future will be characterized by greater cooperation or conflict. For the first time since the State of Israel was established, labor relations, at the time of writing, are being administered by emergency regulations. Since the national labor federation has not agreed to accept determination of wages and benefits by government regulation rather than collective bargaining, a difficult period lies ahead for labour relations in both the public and private sector. Country reports and commentaries indicate that the distinctions between labormanagement relations in the public and private sectors have decreased to such an extent that it is perhaps no longer necessary and appropriate to have separate systems. In some respects, the differences between industries and occupational groups within the private sector are greater than those between public and private employment. This suggests that it makes more sense to center discussions on industrial relations issues that affect employment generally rather than to consider public employment as a distinct and separate entity.

Unions and Employers in Government in the United States: More Conflict than Co-Operation Peter Feuille

Analysing conflict and co-operation between unions and employers in more than 13,000 unionised federal, state, and (mostly) local governments (US Bureau of the Census 1985), all in one short essay, is a difficult task. One of the difficulties is that "conflict" and "co-operation" are elusive terms with unclear boundaries which can be used to mean different things. Another is that collective bargaining is at once conflict and co-operation, or antagonistic co-operation. A third problem is that industrial relations researchers have fulsomely examined the most visible and measurable forms of conflict and co-operation, namely, strikes and institutionalised co-operative programmes, but they seem to have done relatively little research with other forms (Feuille and Wheeler 1981). In keeping with this narrow focus of most industrial relations research, in this analysis conflict will refer primarily to overt disagreements between unions and employers over the terms of collective bargaining agreements, and co-operation will refer primarily to formal union-management efforts to address issues of mutual concern away from the bargaining table. This narrow focus is consistent with the traditional IR research emphasis on easily observable events, but this focus also overlooks much conflictual and co-operative activity which may be difficult to measure and assess.

Unionisation and Bargaining Union Penetration As the figures in Table 1 indicate, government employees in the United States are much more highly unionised than employees in the private sector. With the help of a computational change by the Bureau of Labor Statistics, the labour organisation (hereafter "union") penetration rate in the public sector exceeded the private sector rate by 1968, and since then the gap has widened. By 1984, the public sector was more than twice as unionised as private industry. Given the continuing erosion of union membership in unionism's private sector strongholds (manufacturing, mining, construction, transportation), and given the relative stability of public employment, government in the United States is destined to remain much more highly unionised than the private sector. This public-private gap is wider still if we measure the unions' presence by employees represented (i. e. covered by a union contract) rather than by member-

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Table 1 : Employment and Union Membership

1960 1962 1964 1966 1968® 1970 1972 1974 1976 1978 1980 1982(4) 1984

Total nonagricultural employment ('000s)

Total labour organisation members ('000s)

Total public employment ('000s)

Public labour organisation members ('000s)

Unionised share of private nonagricultural employment'1*

Unionised share of public employment®

(%)

(%)

(1)

(2)

(3)

(4)

(5)

(6)

54189 55549 58283 63901 67897 70880 73675 78265 79382 86697 90406 89566 94461

17049 16586 16841 17940 20721