Manajemen | Fakultas Ekonomi Universitas Maritim Raja Ali Haji 2003 1 (34)
CONSULTATIVE EMPLOYMENT RELATIONS
IN HUMAN RESOURCE MANAGEMENT
ENVIRONMENTS WITH A
UNION PRESENCE
TIMOTHY BARTRAM* AND CHRISTINA CREGAN**
T
his paper investigates consultative management–union relations in organisations
that are characterised by human resource management practices. It presents the
findings of a preliminary analysis of the data. Two large organisations are examined,
one the subsidiary of a multinational, and the other a public hospital. The findings
demonstrate that there are two criteria for the possibility of mutual gain. These consist
of, first, an appreciation by management of the collective loyalties of workers and,
second, the achievement of real gains for employees arising from their constraint in
the use of collectively bargained procedures and industrial action.
INTRODUCTION
This paper seeks to determine the circumstances in which consultative
management-union relations in the ‘high performance’ workplace might
benefit both parties.
From an employment relations stance, consultation can be defined as
management–employee communication that occurs outside the frame of
collective bargaining (see Brown & Ainsworth 2000, for a review of consultation
in Australia in the 1980s and 1990s). It can take many forms, ranging from
formal joint consultation schemes (JCCs), with regular meetings and written
procedures, to ad hoc, informal arrangements (Ben-Avner & Jones 1995). In their
formal guise, consultative practices have a long pedigree and have entered the
armoury of human resource management (HRM) in the form of participation or
employee involvement (EI).
The investigation was carried out by a comparison of two large, unionised
enterprises, situated in Victoria, that employed HRM techniques in a climate of
workplace change. These findings represent the results of the first analysis of
* School of Business, La Trobe University, Victoria 3086. Email: t.bartram@latrobe.edu.au
** Department of Management, University of Melbourne. We are grateful for the assistance
of Trevor Chester and of management and union members at the two large organisations
investigated in this study. We would also like to acknowledge the work of Mark Kwei, Richard
Mitchell, Richard Naughton, and Martin Vranken who all took part in the employee participation
study carried out under the auspices of the Centre for Employment and Labour Relations Law
at Melbourne University. We are grateful to Susan Ainsworth for her help and suggestions. The
multinational study was carried out with the aid of an Economics and Commerce Faculty Grant
from the University of Melbourne.
THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 45, NO. 4, DECEMBER 2003, 539–545
540
THE JOURNAL
OF
I N D U S T R I A L R E L AT I O N S
December 2003
case study data that were collected in Victoria over the last five years as part of
a wider, large-scale project.1 One study took place in a multinational enterprise
in 1997–8 and 2002, and the other in a public sector firm over the period
1999–2000.
The paper is organised as follows. There is a brief literature review from which
predictions are derived regarding factors that might bring about joint gain. This
is followed by the empirical work. Finally, the results are discussed.
CONSULTATION: A
POSITIVE-SUM GAME?
In an effectively unionised organisation that is faced with the challenge of
competitive pressures, management has the problem of introducing changes
that strike at the heart of collectivism: issues of flexibility include skill definitions,
job controls, work intensification, wage rates and job loss. In the past, these
have often been dealt with by collective bargaining with its inherent threat of
industrial action. In the new employment relationship, characterised as
HRM, management’s aim is to introduce flexibility yet avoid industrial conflict.
There is ample evidence to demonstrate that, where there is an effective
union presence, management often consults with unions to achieve this end
(McInnes 1985; Ramsey 1993; Ackers et al. 1992; Brown & Ainsworth 2000).
While thorough statistical analyses of consultation in Australian workplaces have
been carried out (Marchington 1992a,b) there is little case study material, so,
following Lansbury and Davis (1992) and Davis and Lansbury (1996), such an
approach is undertaken in this paper.
There is a major stream of industrial relations literature that suggests
that unions reap little benefit from consultation. In his classic study, Ramsay
(1977) argued that, while the objective of labour is ‘the primacy of democracy
itself’, participation is a unitarist device ‘best understood as a means of
attempting to secure labour’s compliance’. In the current context of competitive
pressures, McInnes (1985) argued in the same vein: consultation is used to
elicit information from the workforce, to assure it of management’s expertise,
and to engender co-operation by ‘educat[ing] stewards about the economics
of business life’. Consultation, therefore, is primarily in the interests of
management.
More recently, however, a view has developed that there may be scope for
mutual gain, as managers search for competitiveness and employees for job
survival in a context of globalised pressures (Kochan et al. 1986; Kizilos &
Reshef 1997). Collective bargaining—with its threat of industrial conflict—may
be an impediment to such a goal, so consultation has taken on a greater
significance. It may be seen as a positive-sum game in which both managers and
workers gain. The price for managers is a sacrifice of some of their prerogative,
and for workers, a constraint on their capacity to collectively bargain.
In the literature, two criteria have been proposed for the success of a cooperative
management–union relationship in an HRM environment. First, management
that holds pluralist rather than unitarist values is said to be more likely to work
successfully with trade unions (Kochan & Osterman 1994). Second, it is held that
both parties must appreciate the possibility of mutual gain (Keenoy 1990). In the
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
541
following section, the validity of these criteria are examined by preliminary
investigations of the data.
EMPIRICAL
WORK
Data and methods
We conducted questionnaire-based interviews, observation and archival research
at two enterprises, beginning in the late 1990s. One study took place in a
major multinational organisation and the other in a public sector hospital. The
first study was carried out in a private sector organisation in the Australian
subsidiary of a large capital-intensive multinational company that specialised
in the design, manufacture and after-sales service of telecommunications
equipment. This investigation took place in two divisions of one of its plants,
involving 350 employees. There were two unions, both representing manual
workers, one electrical and the other largely unskilled general trades. At the
time of the study, there was no enterprise bargaining. Management had set up
a formal consultation forum (JCC) of which all members were union
representatives.
We collected most of the data in 1997. First, we observed the meetings of
the JCC on six occasions between April and September. Second, we carried out
lengthy semi-structured personal interviews with four senior managers, and the
seven employee representatives on the JCC. Third, we examined company
archives and literature in the form of annual reports, brochures, the JCC
constitution and training manual, and the minutes of the JCC for 1996–7. In
1998, we made a report to the executive director with whom we had a lengthy
interview. In 2002, we had interviews with the HRM manager.
The second study took place in a Victorian public hospital that offered services
in acute, extended and psychiatric care. At the time of the study, it had a total
staff of 2287 (Company Annual Report 1999). The largest occupational group
consisted of nursing staff (716, 31%). The chief executive officer (CEO) reported
to a board of management and, thereby, the Minister for Health. The hospital
had a formal HRM department, with a director, manager and administrative/
clerical staff. Enterprise bargaining was carried out. One of the unions offered
to participate in this study. Its membership consisted of senior and middle management, administrative, clerical, service and maintenance employees, and certain
groups of nurses. The hospital also had a consultative relationship with the unions,
and met with their representatives frequently, but in an informal, ad hoc and
pragmatic manner.
The major part of the hospital data that was used in this paper comprises
40–120 minute semi-structured interviews that took place in August and
September 2000. They were conducted with the CEO, the executive HRM
director, three shop stewards and the trade union branch secretary. The archival
data consisted of the following: annual reports and the current enterprise
bargaining agreement.
Overall, there were important similarities between the two organisations with
regard to location, size, HRM practices and union presence. The main relevant
542
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OF
I N D U S T R I A L R E L AT I O N S
December 2003
differences lay in capital/labour intensity, private/public sector representation and
level of bargaining unit.
In this paper, brief examples of the findings are presented. The content was
validated by internal comparison and supporting evidence from observation and
archival material.
RESULTS
Examples of the text are presented in Tables 1–3.
The interviews were investigated in relation to the two criteria:
1. Management must hold pluralist values
The existence of a pluralist attitude on the part of management was not supported in either organisation (see Table 1). Managers held a unitarist philosophy.
They felt they had the right to manage by virtue of their expertise and education.
They argued that company and employee interests were synonymous and that
employees should trust managers to act in their interests. These findings strongly
support Ramsay (1997) and McInnes (1985). Moreover, management in both
organisations was unsympathetic to trade unions, particularly to the representatives of unskilled workers.
2. Both parties must appreciate the possibility of mutual gain.
This was supported in the public hospital, but not in the multinational (see
Table 2).
The findings for the multinational concur with those from case studies in
the UK (McInnes 1985). Workers perceived consultation as undermining
the union and they felt this was contrary to their own goals. Management
attempted to use the JCC to bypass industrial agreements. The urgency of
Table 1
Managers and unitarism
Multinational
Public hospital
We are the experts; that’s why we
are managers. We are highly trained
We are technical people, university
graduates. I have spent many years at
university. I know how to manage
people.
We are acting in the company’s
interests, in the interests of everyone.
Union officials are intent on their
own power and policies . . . and . . .
have no allegiance to the company
The leaders of (the unskilled workers’
union) are very uneducated.
They do the work mainly to keep
their own jobs which are in jeopardy
because of their personal inadequacy.
I’m trained as a manager. I have a
degree in Business
Administration, majoring in
Management and Finance.
A good manager has judgement and
integrity.The workforce should be able
to trust him, to know that he’s telling
the truth. A bad manager is someone
who doesn’t behave with integrity.
Union officials want to keep their jobs,
so they stir to get more members. The
union itself has a political agenda.
The employers are needed as a political
vehicle and employees don’t see that
they are a pawn in the game.
In the unskilled and unqualified areas:
‘a widget area where they can
down tools’ – they will bugger the
organization. They believe the union
and not us and go out on strike.
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
543
their appeals frightened workers. Flexibility was associated with job loss and
alerted employees to their vulnerability.2 Representatives were told about
definite lay-offs that they felt powerless to affect. They felt that only the union
could offer them any protection or at least negotiate redundancy settlements.
In a situation where they were forced to make a choice, union loyalties were
reinforced. Not only did neither side feel it had gained, but existing mistrust
was increased.
The results from the hospital are quite different. There was a perception of
mutual gain. Management, in a quality-based HRM environment, cooperated
with a collective bargaining system but constrained its effects by consulting
informally with unions. Rather than bypassing unions, the HRM director worked
with union leaders and consulted them to ‘iron out’ problems that could have
led to industrial conflict. He oiled the wheels of enterprise-based collective
bargaining in the interests of both management generally and of his own
remuneration and success. In this particular environment where some job loss
was averted, this also served the interests of employees.
In terms of the effectiveness of consultation (see Table 3), the formal,
ideologically-based JCC was held to be a failure at the multinational, where
neither criterion was satisfied. But at the hospital, where there was a perception
Table 2
Perception of mutual gain
Multinational
Managers
We’d be really happy if employees
continued to work the same number
of hours each week. But, ideally, we’d
like to choose when those hours are –
and on what days – and to pay them
the agreed flat rate.
Union members
They try to use it (the JCC) to
determine industrial relations outside
normal collective bargaining.
Have you noticed how often they
mention lay-offs and shutdown?
(Name of local competitor) shut down
not long ago, and it frightens me to
death to think about it. There’s no
work round here.
Fear-mongering: that’s what the JCC
is for. They (management) have this
down to a fine art.
The only thing that will protect us is
the union. They’ll negotiate the
best redundancies protected and
the hospital retain the reputation.
Public hospital
We want to be singing the same song as
the unions.
The key is to get on with unions so they
will support change.
We are very worried about job loss.
Consequently, we work with
management, and do not take industrial
action for local concerns.
Job security is a major issue for us. The
health sector has rapidly evolved in
terms of capital works and technology.
We have to keep up with changes
and be proactively involved in the
change process.
The trade union and management lobby
the government to get additional
funding so that members’ jobs can be
quality of their services and excellent.
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of mutual gain, the limited pragmatic consultative relationship was deemed
successful by both parties.
It was not merely the perception of mutual gain that was important, but the
possibility of its realisation. The multinational was subject to the vagaries of global
competition, and labour costs had little impact, especially in a capital-intensive
firm whose fortunes depended on international finance rather than flexible
practices. The public sector hospital was not subject to globalised competition
and industry-level bargaining. Moreover, in a labour-intensive industry, the
reaction of unions was important in terms of affecting output because labour’s
contribution was essential to quality service. Management and union lobbied
together to gain additional finance from government. Managers achieved
change without conflict.
CONCLUSION
What is the importance of these findings for trade unions? First, trade union
consultation will only be worthwhile where there is a realistic expectation of
a ‘pay-off’, especially with regard to a prevention of job loss. Second, it is
unrealistic to expect management to share a pluralist ideology. Management is
unequivocally unitarist. It is important, however, that managers recognise that
some employees have collective values and loyalties that lie outside the company.
Unions should be wary of attempts to use consultation as a ‘bypassing’ technique.
If these two criteria are not upheld, unions may be well advised to rely on
traditional methods of bargaining.
Table 3
Effectiveness of consultation: perceptions of different parties
Multinational
Public hospital
I stay away for one day and you go
on strike. Don’t you understand
what effect this will have on the
company? Why couldn’t you come
along to the JCC and talk about the
problem with me. Why couldn’t you
explain to your workforce why they
shouldn’t follow the union line?
(Chief Executive)
They argue at length over small
points . . . they don’t pass on
information from the committee to
fellow workers. (Chief Executive)
Workers refuse to raise serious issues,
and management rarely dare to
as we know we will be sidetracked.
(Production Manager)
The JCC? . . . They just talk on and on
in endless circles. They don’t talk
about anything that’s important.
(Employee Representative)
(I) let (the union reps) know in advance
‘so they hear it from me’ and try
to come to some agreement with them
so we provide a united front to the
employee. In this way, strikes, etc.,
are avoided. e.g. ‘We’re going to
downsize, but we’re going to do it in
such a way . . . (HRM Director)
In the last five years, the only industrial
action that we have taken is during EB
negotiations – this has been state-wide
action. There is just no need for us to
take industrial action here.
(Shop Steward)
We’ve managed to work with management to sort out a policy on workplace
bullying – and that’s in both our
interests (Shop Steward)
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
545
ENDNOTES
1.
2.
A long term, wide-ranging study of employee participation in Australia is being conducted in
the Centre for Employment and Labour Relations Law at Melbourne University.
A separate quantitative regression analysis, based on a survey of workers from the two divisions
which the JCC represented, demonstrated that those who felt their jobs were insecure were
significantly less likely to be favourable to the process of consultation than those who felt secure
(Kwei 1997).
REFERENCES
Ackers P, Marchington M, Wilkinson A, Goodman J (1992) The use of cycles? Explaining employee
involvement in the 1990s. Industrial Relations Journal 24, 268–83.
Ben-Avner A, Jones DC (1995) Employee participation, ownership and productivity: A theoretical
framework, Industrial Relations 34 (4), 532–54.
Brown M, Ainsworth S (2000) A Review and Integration of Research on Employee Participation in
Australia, 1983–1999. Centre for Employment and Labour Relations Law, Working Paper
No.18, December.
Davis E Lansbury R (1996) Managing together: Consultation and Participation in the Workplace. Sydney:
Longman.
Keenoy T (1990) HRM: A case of the wolf in sheep’s clothing? Personnel Review 19 (2), 3–9.
Kizilos M, Reshef Y (1997) The effects of workplace unionisation on worker responses to HRM
innovation. The Journal of Labor Research 18 (4), 641–656.
Kochan TA, Katz HC, McKersie R B (1986) The Transformation of American Industrial Relations,
N.Y.: Basic Books.
Kochan T, Osterman P (1994) The Mutual Gains Enterprise. Boston, MA: Harvard Business School
Press.
Kwei M (1997) The invisible whip: Extending the cycles of control. Honours dissertation, Department
of Management and Industrial Relations, University of Melbourne.
Lansbury RD Davis EM (1992) Employee participation: some Australian cases. International Labor
Review 131 (2), 231–48.
Marchington M (1992a) The growth of employee involvement in Australia. Journal of Industrial
Relations 9, 472–81.
Marchington M (1992b) Surveying the practice of joint consultation in Australia. Journal of Industrial
Relations 12, 530–49.
McInnes J (1985) Conjuring up consultation: the role and extent of joint consultation in post-war
private manufacturing industry. British Journal of Industrial Relations 23 (1), 93–113.
Ramsay H (1977) Cycles of control: worker participation in sociological and historical perspective.
Sociology 11 (3), 481–506.
Ramsay H (1993) Recycled waste? Debating the analysis of worker participation: A response to
Ackers et al. Industrial Relations Journal 24 (1), 76–80.
IN HUMAN RESOURCE MANAGEMENT
ENVIRONMENTS WITH A
UNION PRESENCE
TIMOTHY BARTRAM* AND CHRISTINA CREGAN**
T
his paper investigates consultative management–union relations in organisations
that are characterised by human resource management practices. It presents the
findings of a preliminary analysis of the data. Two large organisations are examined,
one the subsidiary of a multinational, and the other a public hospital. The findings
demonstrate that there are two criteria for the possibility of mutual gain. These consist
of, first, an appreciation by management of the collective loyalties of workers and,
second, the achievement of real gains for employees arising from their constraint in
the use of collectively bargained procedures and industrial action.
INTRODUCTION
This paper seeks to determine the circumstances in which consultative
management-union relations in the ‘high performance’ workplace might
benefit both parties.
From an employment relations stance, consultation can be defined as
management–employee communication that occurs outside the frame of
collective bargaining (see Brown & Ainsworth 2000, for a review of consultation
in Australia in the 1980s and 1990s). It can take many forms, ranging from
formal joint consultation schemes (JCCs), with regular meetings and written
procedures, to ad hoc, informal arrangements (Ben-Avner & Jones 1995). In their
formal guise, consultative practices have a long pedigree and have entered the
armoury of human resource management (HRM) in the form of participation or
employee involvement (EI).
The investigation was carried out by a comparison of two large, unionised
enterprises, situated in Victoria, that employed HRM techniques in a climate of
workplace change. These findings represent the results of the first analysis of
* School of Business, La Trobe University, Victoria 3086. Email: t.bartram@latrobe.edu.au
** Department of Management, University of Melbourne. We are grateful for the assistance
of Trevor Chester and of management and union members at the two large organisations
investigated in this study. We would also like to acknowledge the work of Mark Kwei, Richard
Mitchell, Richard Naughton, and Martin Vranken who all took part in the employee participation
study carried out under the auspices of the Centre for Employment and Labour Relations Law
at Melbourne University. We are grateful to Susan Ainsworth for her help and suggestions. The
multinational study was carried out with the aid of an Economics and Commerce Faculty Grant
from the University of Melbourne.
THE JOURNAL OF INDUSTRIAL RELATIONS, VOL. 45, NO. 4, DECEMBER 2003, 539–545
540
THE JOURNAL
OF
I N D U S T R I A L R E L AT I O N S
December 2003
case study data that were collected in Victoria over the last five years as part of
a wider, large-scale project.1 One study took place in a multinational enterprise
in 1997–8 and 2002, and the other in a public sector firm over the period
1999–2000.
The paper is organised as follows. There is a brief literature review from which
predictions are derived regarding factors that might bring about joint gain. This
is followed by the empirical work. Finally, the results are discussed.
CONSULTATION: A
POSITIVE-SUM GAME?
In an effectively unionised organisation that is faced with the challenge of
competitive pressures, management has the problem of introducing changes
that strike at the heart of collectivism: issues of flexibility include skill definitions,
job controls, work intensification, wage rates and job loss. In the past, these
have often been dealt with by collective bargaining with its inherent threat of
industrial action. In the new employment relationship, characterised as
HRM, management’s aim is to introduce flexibility yet avoid industrial conflict.
There is ample evidence to demonstrate that, where there is an effective
union presence, management often consults with unions to achieve this end
(McInnes 1985; Ramsey 1993; Ackers et al. 1992; Brown & Ainsworth 2000).
While thorough statistical analyses of consultation in Australian workplaces have
been carried out (Marchington 1992a,b) there is little case study material, so,
following Lansbury and Davis (1992) and Davis and Lansbury (1996), such an
approach is undertaken in this paper.
There is a major stream of industrial relations literature that suggests
that unions reap little benefit from consultation. In his classic study, Ramsay
(1977) argued that, while the objective of labour is ‘the primacy of democracy
itself’, participation is a unitarist device ‘best understood as a means of
attempting to secure labour’s compliance’. In the current context of competitive
pressures, McInnes (1985) argued in the same vein: consultation is used to
elicit information from the workforce, to assure it of management’s expertise,
and to engender co-operation by ‘educat[ing] stewards about the economics
of business life’. Consultation, therefore, is primarily in the interests of
management.
More recently, however, a view has developed that there may be scope for
mutual gain, as managers search for competitiveness and employees for job
survival in a context of globalised pressures (Kochan et al. 1986; Kizilos &
Reshef 1997). Collective bargaining—with its threat of industrial conflict—may
be an impediment to such a goal, so consultation has taken on a greater
significance. It may be seen as a positive-sum game in which both managers and
workers gain. The price for managers is a sacrifice of some of their prerogative,
and for workers, a constraint on their capacity to collectively bargain.
In the literature, two criteria have been proposed for the success of a cooperative
management–union relationship in an HRM environment. First, management
that holds pluralist rather than unitarist values is said to be more likely to work
successfully with trade unions (Kochan & Osterman 1994). Second, it is held that
both parties must appreciate the possibility of mutual gain (Keenoy 1990). In the
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
541
following section, the validity of these criteria are examined by preliminary
investigations of the data.
EMPIRICAL
WORK
Data and methods
We conducted questionnaire-based interviews, observation and archival research
at two enterprises, beginning in the late 1990s. One study took place in a
major multinational organisation and the other in a public sector hospital. The
first study was carried out in a private sector organisation in the Australian
subsidiary of a large capital-intensive multinational company that specialised
in the design, manufacture and after-sales service of telecommunications
equipment. This investigation took place in two divisions of one of its plants,
involving 350 employees. There were two unions, both representing manual
workers, one electrical and the other largely unskilled general trades. At the
time of the study, there was no enterprise bargaining. Management had set up
a formal consultation forum (JCC) of which all members were union
representatives.
We collected most of the data in 1997. First, we observed the meetings of
the JCC on six occasions between April and September. Second, we carried out
lengthy semi-structured personal interviews with four senior managers, and the
seven employee representatives on the JCC. Third, we examined company
archives and literature in the form of annual reports, brochures, the JCC
constitution and training manual, and the minutes of the JCC for 1996–7. In
1998, we made a report to the executive director with whom we had a lengthy
interview. In 2002, we had interviews with the HRM manager.
The second study took place in a Victorian public hospital that offered services
in acute, extended and psychiatric care. At the time of the study, it had a total
staff of 2287 (Company Annual Report 1999). The largest occupational group
consisted of nursing staff (716, 31%). The chief executive officer (CEO) reported
to a board of management and, thereby, the Minister for Health. The hospital
had a formal HRM department, with a director, manager and administrative/
clerical staff. Enterprise bargaining was carried out. One of the unions offered
to participate in this study. Its membership consisted of senior and middle management, administrative, clerical, service and maintenance employees, and certain
groups of nurses. The hospital also had a consultative relationship with the unions,
and met with their representatives frequently, but in an informal, ad hoc and
pragmatic manner.
The major part of the hospital data that was used in this paper comprises
40–120 minute semi-structured interviews that took place in August and
September 2000. They were conducted with the CEO, the executive HRM
director, three shop stewards and the trade union branch secretary. The archival
data consisted of the following: annual reports and the current enterprise
bargaining agreement.
Overall, there were important similarities between the two organisations with
regard to location, size, HRM practices and union presence. The main relevant
542
THE JOURNAL
OF
I N D U S T R I A L R E L AT I O N S
December 2003
differences lay in capital/labour intensity, private/public sector representation and
level of bargaining unit.
In this paper, brief examples of the findings are presented. The content was
validated by internal comparison and supporting evidence from observation and
archival material.
RESULTS
Examples of the text are presented in Tables 1–3.
The interviews were investigated in relation to the two criteria:
1. Management must hold pluralist values
The existence of a pluralist attitude on the part of management was not supported in either organisation (see Table 1). Managers held a unitarist philosophy.
They felt they had the right to manage by virtue of their expertise and education.
They argued that company and employee interests were synonymous and that
employees should trust managers to act in their interests. These findings strongly
support Ramsay (1997) and McInnes (1985). Moreover, management in both
organisations was unsympathetic to trade unions, particularly to the representatives of unskilled workers.
2. Both parties must appreciate the possibility of mutual gain.
This was supported in the public hospital, but not in the multinational (see
Table 2).
The findings for the multinational concur with those from case studies in
the UK (McInnes 1985). Workers perceived consultation as undermining
the union and they felt this was contrary to their own goals. Management
attempted to use the JCC to bypass industrial agreements. The urgency of
Table 1
Managers and unitarism
Multinational
Public hospital
We are the experts; that’s why we
are managers. We are highly trained
We are technical people, university
graduates. I have spent many years at
university. I know how to manage
people.
We are acting in the company’s
interests, in the interests of everyone.
Union officials are intent on their
own power and policies . . . and . . .
have no allegiance to the company
The leaders of (the unskilled workers’
union) are very uneducated.
They do the work mainly to keep
their own jobs which are in jeopardy
because of their personal inadequacy.
I’m trained as a manager. I have a
degree in Business
Administration, majoring in
Management and Finance.
A good manager has judgement and
integrity.The workforce should be able
to trust him, to know that he’s telling
the truth. A bad manager is someone
who doesn’t behave with integrity.
Union officials want to keep their jobs,
so they stir to get more members. The
union itself has a political agenda.
The employers are needed as a political
vehicle and employees don’t see that
they are a pawn in the game.
In the unskilled and unqualified areas:
‘a widget area where they can
down tools’ – they will bugger the
organization. They believe the union
and not us and go out on strike.
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
543
their appeals frightened workers. Flexibility was associated with job loss and
alerted employees to their vulnerability.2 Representatives were told about
definite lay-offs that they felt powerless to affect. They felt that only the union
could offer them any protection or at least negotiate redundancy settlements.
In a situation where they were forced to make a choice, union loyalties were
reinforced. Not only did neither side feel it had gained, but existing mistrust
was increased.
The results from the hospital are quite different. There was a perception of
mutual gain. Management, in a quality-based HRM environment, cooperated
with a collective bargaining system but constrained its effects by consulting
informally with unions. Rather than bypassing unions, the HRM director worked
with union leaders and consulted them to ‘iron out’ problems that could have
led to industrial conflict. He oiled the wheels of enterprise-based collective
bargaining in the interests of both management generally and of his own
remuneration and success. In this particular environment where some job loss
was averted, this also served the interests of employees.
In terms of the effectiveness of consultation (see Table 3), the formal,
ideologically-based JCC was held to be a failure at the multinational, where
neither criterion was satisfied. But at the hospital, where there was a perception
Table 2
Perception of mutual gain
Multinational
Managers
We’d be really happy if employees
continued to work the same number
of hours each week. But, ideally, we’d
like to choose when those hours are –
and on what days – and to pay them
the agreed flat rate.
Union members
They try to use it (the JCC) to
determine industrial relations outside
normal collective bargaining.
Have you noticed how often they
mention lay-offs and shutdown?
(Name of local competitor) shut down
not long ago, and it frightens me to
death to think about it. There’s no
work round here.
Fear-mongering: that’s what the JCC
is for. They (management) have this
down to a fine art.
The only thing that will protect us is
the union. They’ll negotiate the
best redundancies protected and
the hospital retain the reputation.
Public hospital
We want to be singing the same song as
the unions.
The key is to get on with unions so they
will support change.
We are very worried about job loss.
Consequently, we work with
management, and do not take industrial
action for local concerns.
Job security is a major issue for us. The
health sector has rapidly evolved in
terms of capital works and technology.
We have to keep up with changes
and be proactively involved in the
change process.
The trade union and management lobby
the government to get additional
funding so that members’ jobs can be
quality of their services and excellent.
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December 2003
of mutual gain, the limited pragmatic consultative relationship was deemed
successful by both parties.
It was not merely the perception of mutual gain that was important, but the
possibility of its realisation. The multinational was subject to the vagaries of global
competition, and labour costs had little impact, especially in a capital-intensive
firm whose fortunes depended on international finance rather than flexible
practices. The public sector hospital was not subject to globalised competition
and industry-level bargaining. Moreover, in a labour-intensive industry, the
reaction of unions was important in terms of affecting output because labour’s
contribution was essential to quality service. Management and union lobbied
together to gain additional finance from government. Managers achieved
change without conflict.
CONCLUSION
What is the importance of these findings for trade unions? First, trade union
consultation will only be worthwhile where there is a realistic expectation of
a ‘pay-off’, especially with regard to a prevention of job loss. Second, it is
unrealistic to expect management to share a pluralist ideology. Management is
unequivocally unitarist. It is important, however, that managers recognise that
some employees have collective values and loyalties that lie outside the company.
Unions should be wary of attempts to use consultation as a ‘bypassing’ technique.
If these two criteria are not upheld, unions may be well advised to rely on
traditional methods of bargaining.
Table 3
Effectiveness of consultation: perceptions of different parties
Multinational
Public hospital
I stay away for one day and you go
on strike. Don’t you understand
what effect this will have on the
company? Why couldn’t you come
along to the JCC and talk about the
problem with me. Why couldn’t you
explain to your workforce why they
shouldn’t follow the union line?
(Chief Executive)
They argue at length over small
points . . . they don’t pass on
information from the committee to
fellow workers. (Chief Executive)
Workers refuse to raise serious issues,
and management rarely dare to
as we know we will be sidetracked.
(Production Manager)
The JCC? . . . They just talk on and on
in endless circles. They don’t talk
about anything that’s important.
(Employee Representative)
(I) let (the union reps) know in advance
‘so they hear it from me’ and try
to come to some agreement with them
so we provide a united front to the
employee. In this way, strikes, etc.,
are avoided. e.g. ‘We’re going to
downsize, but we’re going to do it in
such a way . . . (HRM Director)
In the last five years, the only industrial
action that we have taken is during EB
negotiations – this has been state-wide
action. There is just no need for us to
take industrial action here.
(Shop Steward)
We’ve managed to work with management to sort out a policy on workplace
bullying – and that’s in both our
interests (Shop Steward)
C O N S U LTAT I V E E M P L O Y M E N T R E L AT I O N S
545
ENDNOTES
1.
2.
A long term, wide-ranging study of employee participation in Australia is being conducted in
the Centre for Employment and Labour Relations Law at Melbourne University.
A separate quantitative regression analysis, based on a survey of workers from the two divisions
which the JCC represented, demonstrated that those who felt their jobs were insecure were
significantly less likely to be favourable to the process of consultation than those who felt secure
(Kwei 1997).
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