MGTO 630CStaffing and Managing Human ResourcesDr. Christina Sue-ChanLabour - Management RelationsChapters 10 - 11Saturday, 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.

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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

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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

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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.

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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

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Labour / Employee Relations Hong Kong

Haeco’s Works Consultative Committee

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Characteristics of Effective JCCs

Management philosophy: win – win for all sides

Management participation Worker support

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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)

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Employee ParticipationEmployee Involvement

Employee 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 recipients

Employee representatives actively involved

Tends to be task-based Decision-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

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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

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Stakeholder ExpectationsStakeholder ExpectationsCompetitors Fair competitionCreditors Creditworthiness, securityCustomers Supply, quality, value for moneyEMPLOYEES Fair pay, training, job

satisfaction, health and safety at work, equal opportunity

Government Legal compliance, social responsibility

Shareholders Financial return, long-term share value, value-added

Society Safety, environmental concern, social contribution

Suppliers Prompt payment, long-term relationship

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

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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.

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What Happened at HaecoDate EventJuly 98 Chek Lap Kok openedNov. 98 HAECO laid off 352 workersEarly. 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. 99 HAECOEU launches work-to-rule campaign

20 Oct. 99 Work to-rule strike22 Oct. 99 Both sides agree to negotiate23 Oct. 99 Negotiations commence30 Oct. 99 Negotiations break down15 Nov. 99 Deadline for acceptance of new pay

rules (83% accepted)6 Dec. 99 HAECO laid off 166 workers

(including 2 who organized strike), cut salaries of 250

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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

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Other Jurisdictions

Germany Co-determination

Works council

China Labour legislation Trade unions

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Statutory Codetermination in the (Federal Republic of ) Germany

MANAGING DIRECTOR1

(Labour Director)

SUPERVISORY BOARD2

Shareholders employee representatives

SHAREHOLDERS’MEETING

EMPLOYEES

WORKS COUNCIL

TRADE UNIONS

Wor

ks

Con

stit

uti

on A

ct, 1

972

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

1Chief Executive Officer; 2Board of Directors

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Works Council

Works Council Rights

Participation Codetermination

Workforce planning

Work procedureJob situationEstablishment organization

Dismissals

Protection of labourOperation changes

Working hours

Methods of payment

VacationSocial amenities

Vocational training

Establishment order

Hirings

Transfers

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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.

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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

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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

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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

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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

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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

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Dispute Settlement Mechanism Mediation and arbitration at

enterprise level Filing of application for mediation Mediation committee investigates Mediation begins Mediation agreement in writing

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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

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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

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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.

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Follow-up

Learning-styles survey