Topic 4 Employment Relations in Asia

1. Topic 4Employment Relations in Asia BUSM1080 Employment Relations Semester 1, 2016

2. Introduction • This week: general characteristics of ER in Asia • Lecture confined to certain countries and territories in East and Southeast Asia • East Asia: China, Japan, Korea, Hong Kong, Taiwan • Southeast Asia: Laos, Singapore, Malaysia, Thailand, Indonesia, Vietnam, Philippines RMIT University

3. Intro • Diverse region; difficult to generalise: size of economy, per capita GDP, industry structure, nature of state • Developed, post-industrial service economies, high per capita income: Japan Singapore, Korea, Hong Kong • Emerging tigers, middle-income, industrial economies: Malaysia, Thailand • Developing economies: Indonesia, Philippines • ‘Socialist-market economies’ with communist political systems: China, Vietnam, Laos • Liberal democracy in Japan RMIT University

4. Models of labour law • Deery & Mitchell (1993): IR, labour law in many Asian countries initially influenced by concepts, institutions, legal forms borrowed from earlier industrialised countries • British ‘voluntarist model’ • American system of institutionalised collective bargaining • Compulsory arbitration model of Aust, NZ RMIT University

5. Models of labour law • None perfectly replicated. Influenced initial formation then adaptation • British model in former colonies of Hong Kong, Malaysia, Singapore • Subsequent re-shaping in Malaysia, Singapore along lines of Aust arbitration (Leggett & Stewart 2014) • American model influenced: Japan, Korea, Philippines (and Thailand?) (Deery & Mitchell 1993) • Subsequent emulation of Japanese model • Also: Soviet model (Kim 2006) in communist China, Vietnam, Laos RMIT University

6. Culture • ER in Asia often seen to be different from the west including: relative absence of industrial conflict, generally lower rates of union density and strength, company unions, worker loyalty, paternalism, patronage. • Often alleged that various cultural factors shape this • Harmony, consensus preferred to adversarial, confrontational relations • Group rather than individual orientation • Informal relations not legalistic, contract RMIT University

7. Chinese Confucianism • ‘The answer to the puzzle of industrial peace lies… in social attitudes. Eastasians tend to prefer compromise rather than confrontation, and the workplace is an arena for cooperation in the process of growth, not for conflict over the spoils. Unions tend to coalesce around enterprises, like the now passe “company unions” of the West….Perhaps the key element in harmonious labor relations is what we might call “Confucian benevolence”…’. (Hofheinz & Calder 1982, p. 112) RMIT University

8. Japanese feudalism • ‘Japan’s industry was superimposed in a matter of some few decades on a society that was profoundly and had for some centuries been feudal. The loyalty of the worker to the industrial organization, the paternal methods of motivating and rewarding the worker, the close involvement of the company in all manner of what seem to Western eyes to be personal and private affairs of the worker – all have parallels with Japan’s preindustrial social organization.’ • (Abegglen 1958, p. 132-3). RMIT University

9. Thai Buddhism • ‘The influence of religion and culture promotes less social activism among Thais. Over 90 per cent of the population are professed Buddhists…According to Buddhist doctrine…individuals accept their current situation which is believed to be a consequence of what they have done in a past life…Hence it would be difficult to change the current situation, a belief which promotes more passive behaviour and greater acceptance of the status quo’ (Vimolwan 2008, p. 219) RMIT University

10. Thai Buddhism Another aspect of Thai culture which can lead to greater acceptance of inequality is that Thailand is a hierarchical society that is characterised by large power distances between employers and subordinates. Thus in the organizational setting, there is a tendency for workers to accept inequality in power and to defer to authority figures. These cultural characteristics are not compatible with the concept of participative decision making or activities that strive to reduce inequality, such as worker’s participation in union activities.’ (Vimolwan 2008, p. 219) RMIT University

11. Disputing the cultural explanations • Are these explanations based on culture valid? • Or can we explain the characteristics of IR in Asia using conventional frameworks based on power, class dynamics, rational economic maximization, role of the state, economic factors? RMIT University

12. Counterpoints • History of class conflict, labour militancy and state suppression throughout region • Counterfactual episodes: eg Japanese experience of US model during US occupation • Dubious nature of concept of culture • Industry structure • Late, state-led industrialisation • Ongoing role of state, legal mechanisms to suppress unions, militancy • Japanese cultural debate most elaborate: history suggests ‘feudal’ ER model emerged long after initial industrialisation (Fry & Mees 2014) RMIT University

13. Role of state in Asian IR • Relative to western countries, Asian governments play greater role in IR. • Generally authoritarian nature • State-instigated industrialisation • States design IR policies to facilitate low labour costs, industrial peace, stability • IR has played a key role in enabling development of Asian economies RMIT University

14. Role of state • Extensive formal legal protections of individual worker rights (minimum wages, conditions) • But enforcement often lacking • Disparity between formal, legal rules reality/practice RMIT University

15. Role of state • Severe limitations on unions: structure, right to organise freely • Limitations on right to strike • Special economic zones • Limits on subjects of collective bargaining • Bans on political unions, elimination of militant unions • State registration, incorporation of unions RMIT University

16. Unions in Asia • Enterprise unions in many countries • Not as weak or declining as may appear (see handout) • ‘Dual’ roles of communist unions RMIT University

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18. Unions in Asia • Emergence of alternative, independent unionism • Some increases in industrial disputation, particularly under institutionalised, spontaneous unofficial disputes RMIT University

19. Contemporary developments in Asian IR • Democratisation and development • Unstable, dynamic nature of IR in the region • Globalisation of economy but also of labour rights and institutions • Industrialisation and post-industrialisation RMIT University

20. References • Deery, S & Mitchell, R 1993, ‘Introduction’ to Labour law and industrial relations in Asia: Eight country studies, Longman Cheshire, Melbourne. • Fry, S & Mees, B 2014, ‘Culture as grand theory in East Asian employment relations’, Asia Pacific Business Review, vol. 20, no. 4, pp. 603-17. • Hofheinz, R & Calder, K 1982, The Eastasia edge, Basic Books, New York. • Kim, Dong-One 2006, ‘Industrial relations in Asia: Old regimes and new orders’, in (eds) Morley, J Gunnigle, P & Collings, D, Global industrial relations, Routledge, London, pp. 146-77. • Leggett, C & Stewart, G 2014, ‘Australia and the system of arbitration in Singapore’, Economic and Labour Relations Review, vol. 25, no. 1, pp 115-29. • Vimolwan Yukongdi 2008, ‘Trade unions in Thailand’, in (eds) Benson, J & Ying Zhu, Trade unions in Asia, Routledge, Hoboken, 216-35. RMIT University