A special issue on workplace representation and its implications for workers and employers

Citation

Bryson, A. and Bellmann, L. (2019), "A special issue on workplace representation and its implications for workers and employers", Journal of Participation and Employee Ownership, Vol. 2 No. 1, pp. 2-4. https://doi.org/10.1108/JPEO-06-2019-025

A special issue on workplace representation and its implications for workers and employers

Introduction

Across most of the developed economies in the world, union representation is in decline. Although unions continue to bargain over pay through collective bargaining arrangements covering the majority of workers in large parts of Northern Europe, this system is not seen elsewhere in the world. Even in Northern Europe, there has been a gradual “hollowing out” of union influence due to a decline in sectoral bargaining in countries like Germany and, in some other countries, through the decline in union membership which often provides unions with the bargaining power they need to be taken seriously at the negotiating table. Elsewhere, most notably the Anglo-American world, union membership has been in decline for a number of decades such that the union sector constitutes a relatively small part of the private sector.

This decline in union-based institutions has potentially important repercussions for workers and employers alike, as well as for policy makers who have come to rely on union-based voice to deliver Social Dialogue in the workplace. Dialogue between social partners (workers and employers) remains a cornerstone of economic and social planning in the European Union, for example. If unions are less able to deliver the worker voice, what are the implications for the extent and quality of Social Dialogue? More broadly, if unions are no longer reliable conduits for the aggregation of worker preferences and their delivery to employers via consultation and bargaining, how might workers and firms solve workplace problems to avoid costly worker exit and disruptive employment relations?

With the decline of trade unions has come a growing interest in other mechanisms for the delivery of worker voice. Broadly speaking, they come in three forms. The first is worker representation through consultative committees that have a statutory footing, such as Works Councils in Germany. These councils are easy for workers to trigger and tend to be ubiquitous in larger firms in Germany. They tend to focus on consultation rather than bargaining – although the line between the two is often blurred – and, although they have the potential to substitute for union voice in some domains, they are precluded from pay negotiation which is deemed the sole preserve of trade unions. The second form of non-union voice is consultative committees that are set up by employers to provide a formal structure for consultation with employees and information provision from the employer to workers. They differ from Works Councils in that they come into being at the behest of employers, not because workers have a statutory right to trigger them. The third type of non-union voice is the variety of direct voice mechanisms which provide for two-way communication between workers and employer without intermediation through a worker representative. These mechanisms can include town hall meetings, problem-solving groups and team briefings. In some countries, like the UK, direct voice is very common, while in others (such as France) the term “direct voice” is not generally recognised as a concept, even if survey research uncovers the presence of such practices.

Demand for worker voice arises when workers wish to resolve problems or grievances at work, or if they wish to alter their terms and conditions through bargaining. The literature on high-performance/high-involvement work system points to the positive effect of voice on workplace productivity. Some firms may consider investment in worker voice as productivity-enhancing mechanisms. Given the potential costs, employers face in either generating or engaging with worker voice, it may not always be profitable to do so, in which case firms may prefer a “no voice” regime. But these workplaces remain relatively uncommon. Evidence for Britain, for example, suggests “no voice” regimes constitute about one-sixth of workplaces, and that this has remained relatively constant over time. What is changing is the mix of voice mechanisms available at the workplace. Union-only workplaces are less common than they used to be, while some forms of non-union worker representation have been fairly stable, albeit mainly in larger workplaces. There is also movement towards “dual channel voice” whereby employers supplement union voice with non-union forms, perhaps with a desire to fashion voice mechanisms that they perceive to be more conducive to their own needs.

Puzzles remain as to why unions have been in decline in many countries, but not all, with some pointing to difficulties in unions’ supply while others raise questions about the demand for the union flavour of voice, either among workers or employers. Research into the incidence of various voice types, and their impact on workers and employers has only really taken off in the last 10–15 years. But the body of research is growing quite rapidly due to growing interest in the issue of worker voice and the availability of good data at workplace level. The four papers in this Special Issue contribute to that literature with two studies for Germany and two for Britain.

The first paper by John Forth and Alex Bryson “State substitution for the trade union good: the case of paid holiday entitlements” has a very traditional theme, namely the returns to union membership. But it comes with a twist, revisiting the possibility that one reason unions are finding it hard to prosper is that the benefits they offer are now provided to all via statutory rights. The concern that the state might substitute for the union good is one that union leaders have expressed for many years. It is the reason why, in countries like the UK, trade unions opposed a statutory minimum wage for decades – their concern was that statutory minima would undermine demand for union-based collective bargaining. Of course, they changed their tune on that issue, but still the possibility that demand for union representation may be undermined by statutory rights to benefits is a real one worthy of examination. The paper follows a standard regression-based approach in trying to identify the gap in rewards for union vs non-union workers, but this time with a focus on paid holidays. The paper shows that while union members benefit from more paid annual leave than their non-union counterparts, the premium fell with the introduction of a statutory minimum entitlement to paid leave, suggesting state-provided benefits are indeed capable of supplanting the rewards derived from unionisation.

The second and third papers focus on the role of works councils in Germany. In their contribution, Benno Koch, Samuel Muhlemann and Harald Pfeifer ask “Do works councils improve the quality of apprenticeship training in Germany?” The question is an interesting one because works’ councils have legal rights to participate in a firm’s training process and, if they wish, call for the replacement of training instructors. So, in principle, if workers’ voice is strengthened by statute, as in this case, one might imagine the answer to the question to be “yes”. In fact, the answer is a muted “yes”: they appear to only moderately improve the quality of apprenticeship training on some metrics, but not others.

Whereas Koch and co-authors focus on works councils, John Addison, Paulino Teixeira, Philipp Grunau and Lutz Bellmann examine the role of works’ councils when they operate alongside collective bargaining arrangements. Their article examines the deployment and incidence of different forms of flexible labour – fixed-term contracts and temporary agency workers – in the presence of collective bargaining and works councils. The issue is an important one given the potential for “insider” workers to use worker representative structures to make the case for flexible contract workers as a means by which the firm can manage labour demand fluctuations without threatening the job security of “core” workers. The relationships revealed in the study are quite complicated. Union associations with the use of flexible working contracts differ depending on whether the bargaining is sectoral or firm-level, while works council associations with the use of flexible workers differ according to the nature of the flexible contract.

The final paper by Rafael Gomez and co-authors uses a new survey, designed and overseen by the authors, to examine the links between worker representation and what they term “the good workplace” as indicated by worker satisfaction with their job and workplace. What is intriguing about this paper is that it finds joint consultative committees (JCCs) – which, unlike Works Councils in Germany, have no statutory backing – are strongly positively correlated with employee satisfaction. This is not what has been found, generally speaking, in earlier studies for Britain where JCCs have modest effects, if any at all. What is more, rather than substituting for union voice, these positive effects are amplified when firms combine this form of non-union voice with union voice, suggesting complementarities. The effects are further enhanced when combined with high-involvement human resource management (HIHRM). The paper therefore points to the value of an HR system combining dual channel voice with HIHRM not previously identified in Britain. The authors have subsequently identified similar JCC effects in Canada, Australia and the USA, thus encouraging scholars and policy makers alike to take a fresh look at this form of employer-made worker voice.

Taken together, the four papers offer some fresh insights into the nature and workplace effects of worker representation. They underscore the need to go beyond union voice only to get a full picture of the ways in which worker representation can matter to both workers and firms. But they also indicate that union representation continues to be important in many workplaces, both in its own right and as a complement to HRM and non-union forms of voice.