1. MGTO 630C Staffing and Managing Human Resources Dr. Christina Sue-Chan Labour - Management Relations Chapters 10 - 11 Saturday, March 22, 2003 Please note: This is only a preliminary version of the file that will be shown in class. Depending on the flow of in-class discussion, we may not be able to discuss all the overheads in this file.

2. 2 By the end of the performance management module, you should be able to Be familiar with some of the international standards / codes of conduct governing labour / industrial relations Develop insight into joint consultative committees as a mechanism for facilitating two-way conversation between employees and management  Hong Kong  Germany  China

3. 3 International Standards and Codes of Conduct United Nations Code of Conduct for Transnational Corporations UN Declaration Against Corruption and Bribery in Int’l Commercial Transactions OECD Guidelines for MNEs ILO Tripartite Declaration of Principles. Fundamental Principles on Rights at Work Regional Trade Treaties WTO/World Bank/IMF Universal Declaration of Human Rights

4. 4 Global Compact (Initiated by Kofi Anan, Secretary General of UN, 1999) Labour Principle 3: freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.

5. 5 Independent Codes of Conduct CAUX Round Table (CRT)  Senior business leaders from EU, US, Japan  Promote principled business leadership Centre for Ethical Business Cultures  Similar to CRT Interfaith Declaration  Christians, Jews, Muslims Social Accountability International  Social Accountability 8000 (SA8000) Specific performance standards set with minimum requirements; auditors consult with and learn from interested parties, such as NGOs, trade unions and, workers; complaints mechanism

6. 6 Labour / Employee Relations Hong Kong  Haeco’s Works Consultative Committee

7. 7 Characteristics of Effective JCCs Management philosophy: win – win for all sides Management participation Worker support

8. 8 Principles that Recognize the Role of JCCs as an Enabler of Employee Participation in Organizational Decision-Making Clear distinction between consultation and negotiation (i.e., issues that may be classified as adversarial collective bargaining) Management takes initiative to show that the work of the JCC is taken seriously (i.e., appropriate management representation and attendance at meetings) Employee representatives must have support of workforce they represent (i.e., officially elected representatives with an interest in the well-being of the employees)

9. 9 Employee Participation Employee InvolvementEmployee Participation Management-inspired, management controlled Government or workforce inspired; some control delegated to workforce Geared to stimulating individual employee contributions under strong market conditions Aims to harness collective employee inputs through market regulation Directed to responsibilities of individual employees Collective representation Management structures flatter, but hierarchies undisturbed Management hierarchy chain broken Employees often passive recipientsEmployee representatives actively involved Tends to be task-basedDecision-making at higher organizational levels Assumes common interests between employer and employees Plurality of interests recognized and machinery for their resolution provided Aims to concentrate strategic influence among management Aims to distribute strategic influence beyond management

10. 10 Characteristics of Communication Infrastructure for Effective Consultation between Employee and Employer Trust  Formal written constitution Objectives, terms of office, eligibility for office, etc.  Representation  Training and Education  Stakeholder Model Essentially concerned with corporate social responsibility Responsibility for decision making shared among all stakeholders

11. 11 Stakeholder Expectations StakeholderExpectations CompetitorsFair competition CreditorsCreditworthiness, security CustomersSupply, quality, value for money EMPLOYEES Fair pay, training, job satisfaction, health and safety at work, equal opportunity GovernmentLegal compliance, social responsibility Shareholders Financial return, long-term share value, value-added Society Safety, environmental concern, social contribution SuppliersPrompt payment, long-term relationship

12. 12 Are JCCs alone sufficient to represent employee, even when there is a downturn in the economy?

13. 13 Trade Unionism in Hong Kong 400,000 members in 1977 360,000 members in 1984 despite growth of working population by more than 28% Declines due to  Globalization of markets, intensified competition for global resources, increasing pressures to produce quality goods / services at lower prices  employee involvement  Change from manufacturing to service, small-scale light industry 32 companies in HK had established JCCs by 1984.

14. 14 What Happened at Haeco DateEvent July 98Chek Lap Kok opened Nov. 98HAECO laid off 352 workers Early. S. 98 New pay rules – scrapped overtime (60% of take home pay for 3,300 employees) Late S. 98 Hong Kong Aircraft Engineering Company Employees Union (HAECOEU) est. by 1,100 EEs. 14 Oct. 99HAECOEU launches work-to-rule campaign 20 Oct. 99 Work to-rule  strike 22 Oct. 99Both sides agree to negotiate 23 Oct. 99Negotiations commence 30 Oct. 99Negotiations break down 15 Nov. 99 Deadline for acceptance of new pay rules (83% accepted) 6 Dec. 99HAECO laid off 166 workers (including 2 who organized strike), cut salaries of 250

15. 15 Factors that Influence the Continued Effectiveness of the WCC at Haeco Pay Structure at Haeco Strained relationships in stakeholder’s model  Downturn in economy (esp. loss of Cathay Pacific revenues); competition Representativeness of WCC  HAECOEU establishment bring into question how representative WCC is of employees Trade union effectiveness  Perceived benefits: short-term versus long-term  Employee trust in management undermined by new pay rules

16. 16 Other Jurisdictions Germany  Co-determination Works council China  Labour legislation  Trade unions

17. 17 Statutory Codetermination in the (Federal Republic of ) Germany MANAGING DIRECTOR 1 (Labour Director) SUPERVISORY BOARD 2 Shareholdersemployee representatives SHAREHOLDERS’ MEETING EMPLOYEES WORKS COUNCIL TRADE UNIONS Works Constitution Act, 1972 elect support elect election proposals elect appointed and supervised by Iron & steel and coal indus. Codetermination Act, 1951 Works Constitution Act, 1952 Codetermination Act, 1975 1 Chief Executive Officer; 2 Board of Directors

18. 18 Works Council Works Council Rights Participation Codetermination Workforce planning Work procedure Job situation Establishment organization Dismissals Protection of labour Operation changes Working hours Methods of payment Vacation Social amenities Vocational training Establishment order Hirings Transfers

19. 19 Legal Framework Supporting Unionism in China PRC, Labour (Union) Law (April, 1992)  Article 3  general and universal right of all employees to organize and join trade unions All manual or non-manual employees in enterprises, institutions or state organs within the territory of China who rely on wages or salaries as their main source of income, irrespective of their nationality, race, sex, occupation, religious belief or educational background, have the right to organize and join trade unions according to law.

20. 20 Employment Contracts (PRC) Individual contracts, 1980  Contract must comply with laws and regulations of PRC  Contract must be based upon voluntariness and equality  Contract must be accepted by both parties after negotiations between them

21. 21 Written Contracts (PRC) Terms: fixed term or flexible term Content of work Work protection and working conditions Wages and method of payment Work discipline Termination of the contract Responsibility for the violation of the contract Revoked upon agreement between the two parties

22. 22 Collective Employment Contract Written agreement between representatives of staff and workers as one side and enterprise on other Trade Union Law  Trade union represents party of the staff and workers  In non-unionized enterprise, representatives democratically elected by staff and workers and require agreement of more than half of all staff and workers  75.8 million (less than 50%) of total staff and workers in urban areas covered by collective contracts

23. 23 Employee Representative Associations 112.44 million employed by state-owned enterprises; 6.2 million employed in private enterprises in urban areas in 1996. No employer representative organizations acts as major mouthpiece for employers Employee Representative associations  All-China Federation of Trade Unions  All-China Women’s Federation

24. 24 Trade Unions 586,000 unions in 1996 with 102.1 million members  Assist enterprise in organizing workers and staff  Promote state economic reforms and economic policies  Improve worker’s technical skills and education level  Provide welfare services  Represent workers and staff to protect legitimate rights

25. 25 Dispute Settlement Mechanism Mediation and arbitration at enterprise level  Filing of application for mediation  Mediation committee investigates  Mediation begins  Mediation agreement in writing

26. 26 Common Types of Labour Disputes 3 types of labour disputes  Means of terminating relation between employing units and employee  Wages, benefits, social security, training  Labour protection and insurance

27. 27 Debate Do labour unions (employee representative associations) have a role in promoting and maintaining effective / good employee – employer relations? Lessons from Europe may be instructive

28. 28 European Unionism Today Economic restructuring (Monetary union beginning in 1992)  Loss of common, cohesive workplace identities  Weakened political support Renewed support for far right parties (e.g., Netherlands, France, Austria)  Social-democratic parties distanced themselves from unions (e.g., Tony Blair’s Labour Party in UK)  Employers everywhere have challenged union influence in an increasingly competitive global economy Organizing strategies by unions to reverse declining membership, targeted especially at women and younger workers, have so far been limited both in effort and success Have maintained influence through participation in recent national pacts  European Monetary Union criteria, economic growth, and unemployment Source: Martin, A., and Ross, G. … [et al.] 1999, The Brave New World of European Labor: European Trade Unions at the Millennium. Berghahn, New York.

29. 29 Follow-up Learning-styles survey