International and Comparative Employment Relations

National regulation, global changes

Greg J Bamber, Russell D Lansbury

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000256994
• Edition: 6
• Topic: Business
• Subtopic: Business General
• Index: Business

'The most comprehensive and authoritative comparative analysis of employment relations...' Thomas Kochan, Massachusetts Institute of Technology, United States '... breaks new ground as an integrated account of the forces shaping employment relations.' William Brown, University of Cambridge. United Kingdom Established as the standard reference for a worldwide readership of students, scholars and practitioners in international agencies, governments, companies and unions, this text offers a systematic overview of international employment relations.Chapters cover the United Kingdom, United States, Canada, Australia, Italy, France, Germany, Denmark, Japan, South Korea, China and India. Experts examine the context of employment relations in each country: economic, historical, legal, social and political. They consider the roles of the major players: employers, unions and governments. They outline the processes of employment relations: collective bargaining and arbitration, consultation and employee involvement. Topical issues are discussed: non-unionised workplaces, novel forms of human resource management, labour law reform, multinational enterprises, networked organisations, differences between Asian and Western companies, small and medium-sized enterprises, migrant workers, technological change, labour market flexibility and pay determination.This sixth edition is fully revised with an emphasis on globalisation and comparative theories, including concepts of convergence. It offers a new framework for varieties of capitalism in the Introduction, and concludes with an insightful account of the forces shaping employment relations in the world economy.

CHAPTER 1
Introduction: An internationally comparative approach to employment relations

Nick Wailes, Chris F. Wright, Greg J. Bamber and Russell D. Lansbury

We live in a period in which national economies have increasingly become interconnected. This is a form of globalisation. At least since the 1990s, international employment relations scholars have focused on how globalisation is reshaping employment relations across companies, sectors and countries. Events since the post-2007 global financial crisis have given a more urgent focus to this issue.

Historically, there have been significant differences in employment relations from country to country. These include differences in what it means to be an employee, how employees and employers are organised, how wages and conditions are set, the role of the state in structuring employment relationships, and who benefits—and who is excluded—from employment protections. Changes in the international economy have raised questions about whether such national differences are continuing or fundamentally changing.

Increased competition, often from emerging economies, has placed pressure on the traditional protections and benefits that employees in many developed economies have enjoyed. As the work of Thomas Piketty (2014) shows, the period since the 1980s has seen rising income inequality within countries as well as between countries. Some have argued that the erosion of employment protections, labour market institutions and trade unions in many countries has contributed to these outcomes (Kochan 2013; Jacobs & Meyers 2014). The rise of income inequality has been more acute in countries, such as the United States (Chapter 3) and the United Kingdom (Chapter 2), where employment protections have been weakened to a greater extent. There has also been a dramatic growth of inequality in China (Chapter 12). Countries that have maintained stronger labour market protections, such as Denmark (Chapter 9) and Sweden, have also seen widening disparity in incomes since the 1980s, but have been relatively more successful in containing this trend (OECD 2011).¹

These developments might suggest that national employment relations institutions continue to play an important role in producing different outcomes between countries. However, the growing size and significance of international business institutions such as multinational enterprises (MNEs) and standardised production systems, often operating across national borders, have led some to conclude that the scope for national differences in how work is organised and governed has been eroded. Meanwhile, as the events of the post-2007 global financial crisis demonstrated, the increasing importance and interconnectedness of global financial markets have placed new and common pressures on governments and firms across countries.

These developments raise important questions. Are traditional forms of labour market regulation sustainable? Is it still possible for labour markets to produce equity and efficiency at the same time? Will unions continue to play an important role in helping to protect the interests of workers? Are new forms of representation developing, and will they be as effective? Will emerging economies develop similar employment relations institutions and outcomes to those that exist in developed economies? Do national institutions, actors and policy-makers still have the most important roles in shaping employment relations outcomes?

This book aims to provide readers with the background information and some of the conceptual tools they need to help answer these and many of the other employment relations–related questions raised by globalisation. The following chapters, written by leading experts on each country, provide a concise overview of employment relations in twelve countries. The book includes chapters on four English-speaking countries: the United Kingdom, the United States, Canada and Australia. It also has chapters on four Continental European countries—Italy, France, Germany and Denmark—and four Asian countries—Japan, South Korea, the People’s Republic of China and India. China and India are the world’s most populous countries, and in recent years they have come to play an increasingly important role in the international economy.

This chapter provides an introduction to the study of international and comparative employment relations. It discusses some of the benefits and the challenges of adopting an internationally comparative approach. It also provides an overview of a conceptual framework known as the Varieties of Capitalism (VoC) approach, which has become increasingly influential across a number of fields of comparative research, including employment relations. The VoC approach provides a useful starting point for the international and comparative analysis of the impact of globalisation on employment relations.

WHY STUDY INTERNATIONAL AND COMPARATIVE EMPLOYMENT RELATIONS?

In this book, we are interested in the broad range of factors that shape the relationship between employers and employees, and the similarities and differences in these relationships over time and across countries. As Heery et al. (2008: 2) note, industrial relations (IR) scholarship traditionally has tended to focus on three aspects of the employment relationship: the parties to the employment relationship, the processes through which the employment relationship is governed, and the outcomes of these processes. IR has therefore concentrated on the formal and informal institutions of job regulation, including collective bargaining, unions, employers’ associations and labour tribunals. Human resource management (HRM), on the other hand, has been focused more at the level of employing organisations, and is concerned with ‘the effective overall management of an organisation’s workforce in order to contribute to the achievement of desired objectives and goals’ (Nankervis et al. 2011: 11). HRM has thus tended to concentrate on issues such as recruitment, selection, pay, performance and human resource (HR) development. Both perspectives are valuable for understanding the factors that shape the relationship between employers and employees, and therefore we adopt the term employment relations to encompass both IR and HRM. Where they are appropriate, however, the terms IR and HRM are also used in this book.

Although the study of employment relations focuses on the regulation of work, it must also take account of the wider economic and social influences on the relative power of capital and labour, and the interactions between employers, employees, their collective organisations and the state. A full understanding of employment relations requires an interdisciplinary approach that uses analytical tools drawn from several academic fields, including accounting, economics, history, law, politics, psychology, sociology and other elements of management studies.

Adopting an internationally comparative approach to employment relations requires not only insights from several disciplines, but also knowledge of different national contexts. Some scholars distinguish between comparative and international studies in this field. Comparative employment relations may involve describing and systematically analysing institutions, processes and outcomes in two or more countries. By contrast, international employment relations involves exploring institutions and phenomena that cross national boundaries, such as the labour market roles and behaviour of inter-governmental organisations, MNEs and unions (Bean 1994). This is a useful distinction, but again we incline towards a broader perspective whereby international and comparative employment relations includes a range of studies that traverse boundaries between countries. This book therefore emphasises an internationally comparative approach, combining comparative and international approaches to the subject.

There are several reasons why it is beneficial to study internationally comparative employment relations. First, this area can contribute to our knowledge of employment relations in different countries. One of the consequences of globalisation, with increased levels of cross-border trade and investment, is that IR and HR professionals often need knowledge about employment relations practices in more than one country (Strauss 1998).

A second benefit of the internationally comparative study of employment relations is that other countries may provide models for policy-makers, managers and workers. At various times over the past 50 years, aspects of employment relations in the United States, Sweden, Japan and Germany have been seen as models to emulate. One reason for including Denmark in this book is that its system of flexicurity has been seen by some as a potential model for other developed market economies. The relevance of different national models to policy-makers explains why other disciplines have taken an interest in employment relations. For example, political scientists have long been interested in the ways in which employers and employees are organised, which are widely seen as relevant for national politics and policy outcomes (Locke & Thelen 1995; Thelen 2014). Some economists have focused on the role that labour market institutions play in explaining differences in aggregate economic performance (Freeman 2008: 640).

The third, and perhaps the most important, reason for the internationally comparative study of employment relations is its potential to provide theoretical insight into the factors and variables that shape the relationships between employers and employees (Bean 1994). Both IR and HRM, as fields of study, can be criticised as overly descriptive and for their apparent inability to develop causal explanations of relevant phenomena (e.g. see Barbash & Barbash 1989; Sisson 1994; Kelly 1998). This view was expressed in John Dunlop’s (1958: vi) famous observation that

the field of industrial relations today may best be described in the words of Julian Huxley: ‘Mountains of facts have been piled on the plains of human ignorance … the result is a glut of new material. Great piles of facts are lying around unutilised, or utilised only in an occasional and partial manner’. Facts have outrun ideas. Integrating theory has lagged far behind expanding experience. The many worlds of industrial relations have been changing more rapidly than the ideas to interpret, to explain and determine them.

While this tendency towards description has also been noted in comparative employment relations (Clark et al. 1999; Schuler et al. 2002), comparative research offers significant potential for theoretical development by helping us to establish causal inferences (Shalev 1980; Bean 1994; Strauss 1998). This is because comparison requires the abstraction of concepts from particular contexts. As Kochan (1998: 41) puts it:

Each national system carries with it certain historical patterns of development and features that restrict the range of variation on critical variables such as culture, ideology, and institutional structures which affect how individual actors respond to similar changes in their external environments. Taking an international perspective broadens the range of comparisons available on these and other variables and increases the chances of discovering the systematic variations needed to produce new theoretical insights and explanations.

WHAT AND HOW TO COMPARE

While an internationally comparative approach may provide the basis for establishing causal inferences in employment relations research, the act of comparison itself does not necessarily ensure this outcome. One of the challenges of comparative studies is the choice of ‘what’ and ‘how’ to compare.

The lack of a common language and terminology may create confusion in comparative analysis. As Blanpain (2014: 17) points out, ‘identical words in different languages may have different meanings, while the corresponding terms may embrace wholly different realities’. He notes, for example, that the term ‘arbitration’ (or arbitrage in French), which usually means a binding decision by an impartial third party, can also signify a recommendation by a government conciliator to the conflicting parties. In India, the term ‘adjudication’ is used for a compulsory form of arbitration, while the term ‘arbitration’ is used only to refer to a voluntary form of arbitration (see Chapter 13).

There can also be difficulties in distinguishing between the law and the actual practice. For example, while Australia formally practised ‘compulsory arbitration’ from the beginning of the twentieth century until at least the mid-1990s, there was relatively little ‘compulsion’ in practice, and the arbitration tribunals have relied mainly on advice and persuasion (see Chapter 5).

The collection of comparative data also poses challenges for those studying this field. For example, definitions of industrial disputes differ significantly between countries. Conflicts of rights concern the interpretation of an existing contract or award, such as which pay grade applies to a particular individual or group of workers. However, conflicts of interests arise during collective bargaining about an apparently new demand or claim, such as for a general pay increase or a reduction in working hours. In practice, conflicts about interests are usually collective disputes. In the United States, Sweden and elsewhere, this distinction is important. In France, Italy and certain other countries, conflicts about rights are further divided into individual and collective disputes. The general intention is that different settlement procedures will apply to different types of disputes. In some countries, only conflicts of interests can lead to lawful strikes or other forms of sanctions, but conflicts of rights should be settled by a binding decision of a labour court or similar tribunal (Sheldon et al. 2014).

International agencies attempt to compile data, which can be helpful in terms of conducting comparative analysis. For example, Figure 1.1 offers an interesting c...

Table of contents

• Cover
• Title Page
• Copyright Page
• Dedication Page
• Foreword
• Contents
• Contributors
• Figures, tables and boxes
• Abbreviations
• Preface
• 1 Introduction: An internationally comparative approach to employment relations
• 2 Employment relations in the United Kingdom
• 3 Employment relations in the United States
• 4 Employment relations in Canada
• 5 Employment relations in Australia
• 6 Employment relations in Italy
• 7 Employment relations in France
• 8 Employment relations in Germany
• 9 Employment relations in Denmark
• 10 Employment relations in Japan
• 11 Employment relations in South Korea
• 12 Employment relations in China
• 13 Employment relations in India
• 14 Conclusions: Beyond Varieties of Capitalism, towards convergence and internationalisation?
• Notes
• References
• Index