Labor Relations and Collective Bargaining Eighth Edition

1. Michael R. Carrell & Christina Heavrin Labor Relations and Collective Bargaining Eighth Edition www.prenhall.com/carrell PART IV: The Labor Relations Process in Action CHAPTER 12 Comparative Industrial Relations © 2007 Prentice Hall Inc. All rights reserved

2. Chapter Outline Globalization World Wide Labor Movement International Labour Organization Anglophone Countries European Union Nations Far East

3. Labor News Wal–Mart Worldwide Union Network International (UNI) Launched 2005 campaign to change Wal-Mart’s anti-union position Wal-Mart Workforce 1.5 million (.5 million outside of U.S. in 1,000 stores) Global Expansion includes 230 new super centers each year Union Focus: Wal-Martization of world = low wages and benefits (?).

4. Globalization Thomas Friedman’s The World is Flat 3 Eras of Globalization 1st Era: 1492-1820. World Exploration by Spain, Britain, and Portugal 2nd Era: 1800s-2000. Companies compete for new markets, labor 3rd Era: 2000 – beyond. World Economy is flattened by technology; fall of communism; off shoring

5. Globalization Continued U.S. Companies, Unions, Government are affected by greater competition General Motors operates in 200 countries, manufactures in 32 and employs 317,000 outside of the U.S. Collective bargaining in the U.S. is impacted by global competition The mere threat of increased global competition can affect companies.

6. International Framework Agreements (IFAs) Negotiated between a transnational company and worldwide unions Purpose is to provide workers’ rights at all locations Negotiated on global level, but implemented on local level IFAs provide positive union relations, which is a consumer and investor concern

7. Foreign Direct Investment (FDI) Investor resides in one country, but invests capital in another Before 1970s, limited to exchange of goods 1980s – present FDI has outpaced U.S. GDP due to multinational companies moving production facilities to other countries. Since 1970s international financial transactions equal over 1.5 billion (U.S.) daily.

8. Formed at the national level, and today are challenged by globalization Today’s Challenges Multinational companies are not centered on one nation International labor institutions lack a framework to operate Capital and employment can be quickly shifted to challenge collective bargaining agreements New forms of work: outsourcing, subcontracting, contract labor Job Security threatened by global flexibility, competitiveness Trade Unions

9. World Wide Labor Movement 3 Major Revolutions Industrial Revolution: 1800s - England, U.S. Concentrated workers in large organization in cities Utilized machines, metals, energy to raise productivity Created management hierarchy, division of labor Replaced European feudal system and indentured servants

10. Democratic Revolution: 1790s-1900s Monarchs replaced by representative governments Capitalist Revolution: 1776-1900s Market Economy replaced by mercantile system Brought private property ownership, labor markets, trade unions World Wide Labor Movement

11. Major Roles: Collective bargaining for wages, benefits, working conditions Political power for all workers Quality of life: schools, health care, social justice Government responses – first suppression, then tolerance, and finally encouragement Trade Unions

12. International Labour Organizations (ILO) Formed by 1919 – Treaty of Versailles (ended WWI) Parallel Organization to League of Nations Followed “Progressive Reform Movement” which sought middle class social changes Samuel Gompers (AFL) chaired drafting committee ILO headquarters in Switzerland, all League of Nations countries joined except the United States, which also never joined the League of Nations

13. Labor should NOT be treated as a commodity Workers’ right to organize Reasonable wages, standard of living 8 hour day; 40 hour week One day of rest per week No child labor Equal pay for equal work Equitable treatment of immigrants Enforcement of labor laws ILO 1919 Constitution Principles

14. ILO 1998 Principles Four categories of rights and principles; Freedom of association, collective bargaining Elimination of forced labor Abolition of child labor Elimination of employment discrimination 2000 ILO Global Report focused on: Collective bargaining, exclusive rights, mediation but not compulsory arbitration

15. Angolophone Countries “British Empire” Nations Great Britain 1890 May Day labor demonstration started “the great unrest” Shop stewards began in WWI Winston Churchill formed first political labor party government in WWII Voluntarism (Non-Statutory) “Laissez faire” 1999 Employment Relations Act requires recognition if 40% of workers petition

16. Canada 1880s-1920s followed U.S. labor unrest 1919 Winnipeg strike led to collective bargaining Largely cooperative, laissez faire labor relations Local labor laws dominate, not federal as in U.S. Greater union membership than U.S. 1961 New Democratic Party (DNP) favored unions Unions = 30% workers in 2000 Anglophone Countries Continued

17. Anglophone Countries Continued • Australia • Unique labor history • 1904 federal compulsory conciliation, arbitration of labor disputes • 1996 workplace relations act curbed union power, strikes, industry-wide awards (contracts) • Awards (contracts) cover 80% of workers

18. European Unions (EU) 25 member nations (formed 1992) Mission – integrate economies, raise standards of living and promote employment 500,000,000 people EU has gained influence in UN, WTO “Single Market” monetary unit – euro and European Central Bank European Trade Union Confederation (ETUC) represents National Trade Unions Positive Labor Climate Work Councils (WCs) – elected representatives promote workers’ rights “Framework Agreements” resolve general issues – parental leave, part- time work, fixed term contracts

19. European Unions Map Original Member Other Members Rejected Members Negotiating Membership New Members

20. European Unions Continued Germany Trade Unions negotiate wage agreement Work Councils negotiate working conditions Co-determination gives employees seat on board Unions lost members, clout in 1990s 1990s national bargaining partially replaced by single employer bargaining Sweden 1938 Swedish employers’ confederation set labor rules Unions/employers used CB 1968 student unrest led to labor reforms 1990s reforms decentralized labor relations

21. France Strong legacy of class conflict 90% of workers covered by agreements, but only 10% are union members 5 union confederations represent workers Italy Formed due to 1789 French Revolution 1919-1945 Mussolini led Fascist government Constitution provides trade unions; collective bargaining, right to strike 2003 Biagt Reform European Unions Continued

22. Far East Japan Industrialization began in 1880s Keiretsu – family group of companies After WWII unions grew to 56% of workers In 2003 only 19.6% of workers belonged to unions 3 Key Historic Premises of Japanese labor lifetime employment – most employees are retained for life seniority – pay raises based on service enterprise (employer) – based unions Today – less emphasis on lifetime employment seniority “just cause” for dismissal Constitution provides right to organize, act collectively, strike, collective bargaining

23. Far East Continued Shunto – unions in all industries simultaneously negotiate with companies Rengo’ – 1989 National Trade Union 2000 – 21.5 % workers in unions Korea Established in 1948 Chaebol – large, family controlled firms with government ties Chaebol includes Hyundai, Samsung, LG, Daewoo, Sunkyoung = 95% GDP Labor system: 3 parties 1.Ministry of Labor 2. Trade Union Federation 3. Employer Organization

24. Far East Continued • Labor Relations Commission • Settles labor disputes • 7.3% of workers unionized • China • MAO established centralized, planned government, after WWII • GDP has grown rapidly, today it is the second largest economy in the world • Planned economy of set wages, prices, and employment charged to state-owned market economy • Today foreign investment, technology, and exports fuel growth

25. Far East Continued • Federation of Trade Unions • Represent worker interest, but not against the employer • 1994 Labour Law replaced lifetime employment with fixed-term contracts covering wages, benefits, hours, and safety. • 120 million employees under contract