WORKPLACE DEMOCRACY AND THE GLOBAL FINANCIAL CRISIS Russell Lansbury Professor of Work & Organisational Studies, Faculty of Economics and Business, University of Sydney The Kingsley Laffer Memorial Lecture, University of Sydney, 16 th March 2009

Workplace Democracy ‘A democratic workplace is one in which workers have the opportunity to genuinely participate in and influence decisions concerning their lives at work’. 1

Key Questions  Is workplace democracy relevant to the current economic crisis?  What can be learnt from previous experience to foster workplace democracy?  How will globalisation influence future prospects for workplace democracy? 2

The Case for Workplace Democracy  Efficiency : enhances decision-making by taking a wider range of views into account.  Equity : provides for greater power-sharing at the enterprise level.  Humanistic : fulfils human needs for greater personal involvement and self-worth. 3

Approaches to Workplace Democracy  Collective bargaining through membership of unions.  Indirect or representative participation through joint consultative bodies and works councils.  Direct participation in semi-autonomous workgroups, TQM and QC circles and work redesign. 4

Workplace Democracy and the Global Financial Crisis 5 ‘Social democratic governments around the world must … devise a new regulatory framework [which] combines productivity growth with social equity’. Kevin Rudd, P.M. (2008) The Global Financial Crisis.

Previous Laffer Lecturers 6 ‘We are now witnessing one of the most dramatic changes [in history] but further changes are required [in] the relationship between management and workers’. Bob Hawke, P.M. Laffer Lecture: 1993.

Previous Laffer Lecturers 7 ‘I want equity back on the agenda of labour market and industrial relations reform’. Quentin Bryce, Governor General, Laffer Lecture: 1999.

Previous Laffer Lecturers 8 ‘Australia must not only strengthen the rights of individuals at work in Australia but it should be a force in the world … to assist other nations to achieve fundamental workers’ rights’. Justice Michael Kirby, Laffer Lecture: 2002.

Previous Laffer Lecturers 9 ‘It has always seemed incongruous to me that while Australian citizens are able to elect their governments, when they enter their workplace to become industrial citizens they have no legal right to elect a consultative body to participate in workplace governance’. Prof. Ron McCallum, Laffer Lecture: 2005.

Kingsley Laffer:

Kingsley Laffer:  Established industrial relations as a field of study at the University of Sydney.  Founding editor of the Journal of Industrial Relations.  Founding member of the Industrial Relations Society.  Interdisciplinary approach and focus on global aspects. 11

Democracy at Work: Emery & Thorsrud 12

Australian Pioneers of Workplace Democracy  Fred Emery (Tavistock Institute): semi-autonomous work groups.  Kenneth Walker (ILO): the participatory enterprise.  Bill Ford (UNSW): policy advisor, action researcher and enterprise development agreements.  Dexter Dunphy (UTS): the sustainable corporation. 13

Workplace Democracy in Australia  Joint committee introduced during WW2 and in the 1950s to improve efficiency and reduce absenteeism.  Dunstan Labor government in South Australia in the 1970s.  Hawke Labor government’s Accord in 1980s and 90s.  Recent research reported around 50 per cent of Australian workplaces had some form of joint consultation. 14

Workplace Democracy in an International Context  Sustained initiatives within the European Union on representative participation eg. European Works Councils.  Employers seek greater direct employee involvement in order to gain greater productivity and flexibility.  Coordinated market economies (Continental Europe) have sustained greater levels of workplace democracy than liberal market economies (Anglo-Saxon countries). 15

Globalisation and Workplace Democracy  Concerns that globalisation has resulted in the transfer of power from the nation state to multinational corporations (MNCs).  Global Unions and NGOs have achieved international framework agreements with some MNCs.  The ILO has a mandate to establish and promote core labour standards but lacks powers of enforcement. 16

After Lean Production: The Global Auto Industry 17

International Research on the Global Automotive Industry  After Lean Production studied auto companies in the mid 1990s. Repeated in 2000s.  The Japanese and German auto companies benefited from direct involvement of employees in decision making and innovation.  Toyota and VW are more likely to survive than the 'big three' US auto companies. 18

ABB and Globalisation 19

ABB in Europe and Australia  Three plants in Australia, Finland and Switzerland were similar in size and products but varied in levels of performance.  A key difference between the plants was that both the Finnish and Swiss plants excelled either in product or process innovation and involved their employees in decision-making.  By contrast, the Australian plant failed to innovate or engage its employees and was forced to close operations. 20

Future Challenges for Workplace Democracy  Globalisation presents both a threat and an opportunity for workplace democracy.  The ILO, Global Union Federations and NGOs are having increased success in persuading MNCs to adhere to core labour standards.  A more integrated and comprehensive approach is needed at the global level. 21

Implications for Australia  A new ‘social contract’ is needed between key parties to provide stronger legal rights for workers and sustain more democratic workplaces.  A more ambitious vision is required by government, employers and unions to achieve decent work and democratic workplaces.  ‘Australia must not only strengthen the rights of individuals at work but we should be a force in the world for fundamental workers’ rights’ (Michael Kirby). 22

Future Directions ‘The spread of this revolution has of necessity been slow … Nevertheless, it is no passing fad … There has been the realisation that the traditional authoritarian patterns of working are grossly inefficient … In their place we need new and genuinely democratic forms of work organisation’. Fred Emery. 23