Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
It
is required that you engage in wide research in the subject in order to be able to fully
comprehend the many basic elements covered.
MODULE OUTLINE
The Module: -
• Explores on the nature of the employment relationship,
• Examines the different perspectives in analyzing Industrial Relations,
• Examines the different perspectives in analyzing the worker problem,
• Examines the roles of various parties in Industrial Relations,
• Explores on Industrial Relations dynamics in the 21st Century and key issues driving
change in Industrial Relations.
AREAS OF STUDY
Background to the study of Industrial Relations
• Academic Study of I.R
- I.R defined
- The growth of I.R as a discipline.
2 The Employment Relationship
- Nature of the Employment Relationship,
- The Employment Contract (origins, types, elements etc.)
- The Concepts of Power, Conflict and Job Regulation.
- Implications on the study of Industrial Relations
• Industrial Relations Perspectives
- Unitarism
- Pluralism
- Marxism
ACTORS IN INDUSTRIAL RELATIONS
4 Management
- Management defined
- Historical features of labour management
- The Managerial Prerogative
- Management Styles in Employment R/ships
- Management Control Strategies
- Contemporary issues in Management
- Management and Employers Organisations
5 Trade Unions
- Trade Unions defined
- Types of unions
- The rise and fall of trade unions
- Trade union Structure and democracy
- Contemporary Issues on Trade Unions
6 The State in Industrial Relations
- Forms of State Interventions
- The changing and future role of the State in Industrial Relations
INDUSTRIAL RELATIONS PROCESSES
7 Negotiations
• Purpose of Negotiation
• Types of Negotiation
• Negotiation Strategies
8. Collective Bargaining
- Definition
- Types of Bargaining
- Functions of Bargaining
- Management and Trade Union roles in bargaining
- Contemporary issues in Collective Bargaining
9. Industrial Action
- Functions
- Forms of Industrial Relations
- The Legal Framework of Industrial Action in Zimbabwe
10. I. R dynamics in Zimbabwe
- A historical account of Industrial Relations in Zimbabwe
- Organisation of workers
FACTORS SHAPING I.R IN ZIMBABWE TODAY
• Globalisation
• Technology
• Flexibility
• The new H.R Agenda
• Social Dialogue
• The future of Industrial Relations and the study of HRM in Zimbabwe
• Implied will result from what is understood to have been the intention of the parties. This
could be from the fact that its so obvious that it need not be stated
Terms implied in every contract (Pitt, 2000)
• To pay wages if an employee is available for work
• To provide work in certain specified circumstances
• To co operate with employee in that employee will not be treated in a manner that will
destroy mutual trust and confidence
• To take reasonable care for the reasonable care for the health and safety of the employee
• To be faithful to the employer and not engage in actions that cause conflict of interest
• To take reasonable care in the performance of his or he duties
• In the absence of express terms, “custom and practice” may help to define what
constitutes the employment contracts. Custom and practice has to be reasonable –
reasonable by fitting the “norms” of the industry in question
• Custom and practice should not be interpreted in a substantially different ways by
different people
• Should be well known by all those whom it relates
Psychological Contract
• It refers to the expectations of the employer and the employee that operate in addition to
the formal contract of employment
• It has been defined by Rousseau (1994) cited by Hiltrop (1995:287) as “the
understanding people have regarding the commitments made between themselves and
their organisation.”
• It therefore, is concerned with each party’s perception of what the other party to the
employment relationship owes them over and above that which may be specified in the
contract of employment.
• The contract is not clear as to the content and because it is based on perceptions, it is not
written down
• Mullins (1996) points out that there is a continuous process of balancing and explicit and
implicit bargaining over the contract content and more over that the individual and the
organisation may not be aware consciously of the contract “terms”. However, these terms
affect their behavior and relationship.
• One of the aspects of the psychological contract that has gained prominence over the
years is the traditional employee perception that the organisation promises a “job for life”
(examples) in return for employee loyalty and commitment. This is still practiced if we
take the case of local government, civil service and parastatals.
• Some jobs are fast changing in terms of nature and content hence driving a twist of the
psychological contract for example, the changes in the banking sector. The coming in of
IT to replace people has shifted people’s expectations and hence the psychological
contract.
• Organisations now need managers that are less experienced, more commercially aware,
more energetic, and they could be easily obtained, and retained, more cheaply than their
predecessors.
• Research reviewed by Sparrow (2000) highlights the changing nature of the organisation
of work and its implications on the psychological contract, e.g., experiences of
redundancy, for example, are often viewed by the older workers as a violation of the
psychological contract, and are significantly related to their adoption of personal
responsibility for their career development (Sparrow 2000) also issues of termination or
grows of incapacitation, etc.
• Herriot and Pemberton (1995) argued that the psychological contract has moved from one
that is relational- based on mutual trust and commitment- to one that is transactional-
based upon mutual instrumentality of the work- effort- reward bargain.
• It demonstrates a shift from focus on job security on the part of employees towards
employability security.
• According to Hiltrop (1995:289) in the new type of psychological contract “there is no
job security. The employee will be employed as long as s (he) adds value to the
organisation and is personally responsible for finding new ways to add value. In return
the employee has the right to demand interesting and important work has the freedom and
resources to perform it well, receives extra pay that reflect his/her contribution and gets
the experience and training needed to be employable here or elsewhere.”
Characteristics of the ‘old’ and new psychological contract
Characteristic Old New
Focus of the E/R Security and long term Employability to cope with
careers in the company changes with this and future
employment
Format Structured and predictable Flexible and unpredictable
Duration Permanent Variable
Underlying principle Influenced by tradition Drive by market forces
Intended output Loyalty and commitment Value added
Employer’s key Fair pay for a fair day’s High pay for job performance
responsibility work
Employee’s key Good performance in Making a difference to the
responsibility present job organisation
Employer’s key input Stable income and career Opportunities for self
development
Employee’s key input Time and effort Knowledge and skills
Source- Hiltrop (1995:290)
• So the contract is based on the theory of reciprocation/ exchange theory by Cox and
Parkinson (1999), where individuals make an investment with expectations that an
appropriate reward will be forthcoming.
1. Discuss the implications for the conduct of the employment relationship when the
psychological contract is broken.
2. How may you as a Human Resource Manager contribute towards the management of a
psychological contract in a company which is in the FMCG industry
Management
• Harbison and Myers (1959) give a general definition of management -
•
• The planning, organizing, leading and controlling of resources to achieve
organizational goals effectively and efficiently
Origins of Management
• Employer’s rights are today generally exercised by managers
• Pollard attributed that the industrial revolution provides evidence of the origins of
management.
• Writers such as Braverman argue that initial managers were recruited from the family
of business people
• This is necessary to keep control of business, but in the growing size of businesses
nepotism was quickly replaced by merit
• This provides an insight into modern ownership and control and becomes the real
underlying factor in terms of management into the ranks of owners
• The managerial prerogative, which are the managements rights and functions are
asserted to derive property rights
• Managerial rights are the right to decide what to be done, when, where, and by
whom.
• Managers act as legal trustees to the owners of property
Managerial Prerogative
Friedman (1977)
• talks of two types of strategies which managers use to exercise authority over labour
power namely responsible autonomy and direct control
• Responsible Autonomy mobilizes labour power by giving employees an opportunity to
have control over the work situation (being responsible citizens) in a manner that is
beneficial to the whole organisation
• It includes such elements such as employee involvement and participation, delegation of
authority and empowerment.
• Direct Control on the other hand involves close supervision of employees, a harsher
regime of discipline characterized by threats of pay reduction or dismissal
• This approach owes much to Taylorism and Scientific Management which has some of
the elements as reflected by Morgen (1986)
Trade Unions
Students should at the end of the lecture be able to: -
• Define a trade union,
• Distinguish the types of trade unions citing examples,
• List and explain the functions of trade unions,
• Trace the genealogy of trade unions in Zimbabwe and Britain among other cases,
• Account for the factors that have led to the rise and fall of trade unions in Zimbabwe
since the pre-independence period to date,
• Clearly demonstrate their understanding of the structure and organization of trade unions,
citing local examples,
• Demonstrate understanding of trade union democracy and shortcomings thereof,
• Assess the contemporary issues on trade unions including the factors that are likely to
influence the future of trade unions locally and abroad.
Definition of Trade Unions
• The Webbs (1920:11) define a trade union as, “a continuous association of wage earners
for the purposes of maintaining or improving conditions of their working lives”
• Salamon (1998) define it as “any organisation whose membership consists of employees
which seeks to organize and represent their interests both in the workplace and society
and in particular, seeks to regulate the direct process of Collective Bargaining with
management”
• The legal definition of trade unions (according to The Act) “any association or
organization formed to represent or advance the interests of any employees or class
thereof in respect of their employment…”
• According to the towers, trade unions are more than engines for converting bargaining
power into improved pay and conditions for their members, …they are an integral part of
the system on checks and balances which is composed of capitalist liberal democracies,
as according to Salamon (1998)
"I would like first to reject two views of union purpose which merely mislead. They are
poles apart but they have this in common. Those who hold them believe they know
more about what trade unions are for than the unions and their members know
themselves.
"The first is the Marxist view. Admittedly it has many different shapes and variations
and, since all its advocates claim to be offering the one true interpretation of the one
true gospel, they are often violently at odds with each other. Most of them, however,
would subscribe to an exposition by the editor of the New Left Review -
"As institutions, trade unions do not challenge the existence of society based on a
division of classes, they merely express it. Thus trade unions can never be viable
vehicles of advance towards socialism in themselves; by their nature they are tied to
capitalism. They can bargain within society but not transform it.
"From this it follows that the inevitable limits of trade union action must be overcame
with the help of a revolutionary movement or party which -• to continue quoting from
the same essay - "must include intellectuals and petit bourgeois who alone can provide
the essential theory of socialism", Why? Because - "Culture in a capitalist society is
...... a prerogative of privileged strata; only if some members of these strata go over to
the cause of working class can a revolutionary movement be born".
"Ignoring for a moment the conceit in this statement, I would not dispute the point that
trade unions are not a substitute for political parties, be they revolutionary or
reformist, workers do not join unions because they think alike and share the same
political outlook. They do so for the sake of gaining immediate improvements in their
lot which only come from collective action. Their unity, that completeness of the
organisation of trade unions which is the foundation of their strength, must always be
imperilled when they import political faction fights. Unions may decide by a majority
to support a particular political party - as many in this country have decided to
affiliate with the Labour Party - but this is another matter. It reflects no more than
recognition that they must engage in politics as well as the best strategy because it
produces the best results.
"What I find so objectionable as well as invalid in the Marxist view is its implicit
contempt for "pure and simple" trade unionism.
"I do not deny that socialism, as someone once said, has been "the conscience of
labour movements". But this is socialism as a set of ideals, as a moral dynamic, not as
a particular blueprint for an economic or political system. In this sense it has
undoubtedly provided restraints against the emergence of the cruder forms of business
unionism that can be found in the United States.
"If the first mistaken view of the purpose of trade unions comes from the Left, then the
second comes from the Right. The operative word for its expression is responsible
trade unionism. Michael Shanks amusingly characterized and only slightly
caricatured this view -
"There has grown up in recent years a widespread superstition that the trade union
leader is a sort of ex officio civil servant, responsible to the community at large. The
trade union leader’s main responsibility, to judge from the sort of comment one reads
in the press and hears from middle-class lips, is to "keep his chaps in line" or "knock
some sense into them...", in practical terms, the main function of a union leader
according to this view is to deter his members from putting in ambitious wage claims,
stop them from going on strike and behaving in other anti-social ways and encourage
them to work harder and increase their productivity... Having done all that, he can
gracefully retire with a peerage. He may even be introduced to the Queen and taken to
dine in a west End club from time to time.
"The essence of this view is that trade unions are there to act as a kind of social
police force - to keep the chaps in order and the wheels of industry turning. To this
there is only one answer. The first and overriding responsibility of all trade unions is
to the welfare of their own members. That is their primary commitment; not to a
firm, not to an industry, not to the nation. A union collects its member’s
contributions and demands their loyalty specifically for the purpose of protecting
their interests as they see them, not their alleged "true" or "best" interests as defined
by others.
"Obviously trade unions cannot reasonably behave as if they were not part of a
larger Society or ignore the effects of their policies on the national economy and the
general public. No voluntary organisation can do that with impunity.
If they do, they turn society against them and society can retaliate. In any case,
members of trade unions are citizens and consumers as well as producers. Even so,
trade unions exist to promote sectional interests - the interests of the section of the
population they happen to organise - as do professional associations and many other
bodies!
"Both of the views I have been attacking belittle the democratic function of trade
unions; their function of representation. That is why each in its different way claims
to know better than the trade unions themselves where the interests of their members
lie. My starting point in defining union purpose is the opposite premise; that the best
way of finding the right answer is to look at the behaviour of trade unions; to infer
what they are from what they do.
"Here one thing is at once certain and it applies to all trade unions and has applied
throughout the greater part of their history. The activity, to which they devote most
of their resources and appear to rate most highly, is collective bargaining. So the
question we have to ask is, what purpose do unions pursue in collective bargaining?
The conventional answer is that they defend and, if possible, improve their members'
terms and conditions of employment. They are out to raise wages, to shorten hours
and to make working conditions safer, healthier and better in many other aspects.
"The answer is right as far as it goes, but it does not go far enough. Collective
bargaining may be what the words imply - that depends on how we define bargaining
- but it is also a rule-making process. The rules it makes can be seen in the contents
of collective agreements. In other words, one of the principal purposes of trade
unions in collective bargaining is regulation or control. They are interested in
regulating wages as well as in raising them and, of course, in regulating a wide
range of other issues appertaining to their members' jobs and working life.
"Why do they have this interest in regulating employment relationships and what
social purpose does such regulation serve? It is certainly not a bureaucratic interest
in rules for their own sake. Unions and their members are interested in the effect of
rules made by collective bargaining, which is to limit the power and authority of
employers and to lessen the dependence of employees on market fluctuations and the
arbitrary will of management.
Stated in the simplest possible terms these rules provide protection, a shield, for their
members. And they protect not only their material standards of living, but equally,
their security, status and self-respect; in short, their dignity as human beings. One
can put the same point in another way. The effect of rules is to establish rights, with
their corresponding obligations.
"The rules in collective agreements secure for employees the right to a certain rate of
wages; the right not to have to work longer than a certain number of hours; the right
not to be dismissed without consultation or compensation and so on. This surely is
the most enduring social achievement of trade unionism; its creation of a social order
in industry embodied in a code of industrial rights. This too, is the constant service
that unions offer their members: daily protection of their industrial rights.
"Such rights could be and to some extent are, established by law. But collective
bargaining serves yet another great social purpose. Apart from providing protection,
it also permits participation. A worker through his union has more direct influence
on what rules are made and how they are applied than he can ever exercise by his
vote over the laws made by parliament. We hear a lot these days about participation,
including workers' participation in management. I have yet to be convinced that
there is a better method than collective bargaining for making industry more
democratic, providing its subjects and procedures are suitably extended. Putting a
few workers or union officials on boards of directors only divorces them from the
rank-and-file. In collective bargaining, trade unions must continually respond to and
service their members' interests.
Legal Function
• Professor Kahn-Freud has identified three legal functions which the State performs in
industrial relations (Otto Kahn Freud’s Labour and the Law 1972). First, the "regulatory
function" in which it provides rules that govern the terms and conditions of employment
of individual employees, whether or not they are union members.
• Second, the "restrictive function" in which it provides rules that governs the conduct of
industrial conflict, ie restricting the lawful ambit of industrial action.
• Third, the "auxiliary function" in which it provides rules that govern the encouragement
and extension of collective bargaining institutions. In reality there is a great overlap
between these functions, but as tools of analysis they are quite useful.
Regulatory Functions
• The conceptual corner-stone of labour law both historically and currently is the individual
contract of employment as a legally enforceable relationship. In legal theory the
employer and the employee are equal bargaining partners with freedom to decide on its
terms. There is, however, a wide difference between legal theory and what happens in
practice as far as the contract of employment is concerned. Kahn-Freud sums up this
contradiction between legal theory and what happens in practice -
• In order to provide protection on behalf of the powerless individual employee, the State
provides a floor of rights on such issues as fundamental rights of employees (see labour
act), duration, particulars and termination of employment (s12)
Restrictive Function
• In general terms the State acts as a referee in the dynamic relations between employers
and employees. This analogy of a referee symbolizes the restrictive function of the State
in so far as it limits and prescribes the freedom of action of the participants. The starting
point when analyzing this function is to consider whether the State is encouraging or
destroying collective bargaining between employers and employees. Is the State
encouraging the growth and strength of both employees' and employers' organisations, or
is the restrictive function used to supersede collective bargaining?
The following are some of the practices which generally characterize the restrictive
function of the State -
• Strike Action
• Registration of trade unions
• Compulsory Arbitration
• Unfair Dismissal
Auxiliary Function
• The auxiliary function of the State in industrial relations is primarily to promote
industrial peace by encouraging and promoting collective bargaining between trade
unions and employer organisations. The State, through legislation or otherwise, defines
the bargaining units, the procedures and institutions for resolving disputes and reserves
the power to legally enforce agreements and place unions under statutory duty to give
equal protection, ie representation to all the workers in the designated industry or
occupation irrespective of membership, race, creed or anything else.
For more, students should refer to part X of the labour Act, (S74-82b) on Collective
Bargaining
Conciliation
• Simply means "that some third party" - a civil servant, a person without office but with
personal prestige, or statutory or agreed commission or board - tries to get the parties
together. If conciliation succeeds, the result is an agreement. Mediation is usually
synonymous with conciliation.
Arbitration
• Is listening to the parties and the evidence and then formulating an award. "if the
arbitration is voluntary as to its outcome, this is a mere recommendation; if it is
compulsory, the award binds the parties".
• Is "a procedure in which some third party (usually a commission or court) is charged
with finding the facts of a dispute and sometimes also with the making of
recommendations for its settlement".
The State in the General Management of the Economy
• The crucial questions that one needs to ask in examining this role of the State are –
• Is the involvement of the State promoting the interests of the employers or the
employees, i.e. interests of capital or of labour?
• When playing such a central and visible role can the State really be neutral?
A detailed analysis of the neutrality or otherwise of the State is beyond the scope of this
module. What is not debatable is the fact that the role of the State in industrial relations
was developed in line with the general transformation in its economic functions. The State
is usually involved in manpower policies, incomes and prices policies, investments and
subsidies policies all of which have direct or indirect impact on the industrial relations
trends in any given national economy. These will be examined in this section, giving
emphasis to the resultant influence on industrial relations.
• Skills generation.
• Employment generation.
• Labour Mobility
Definitions
• “...all negotiations which takes place between an employer, a group of employers or one
or more employers organisations, on the one hand, and one or more workers
organisations on the other, for: -
• Determining working conditions and terms of employment, and /or
• Regulating relations between employers and workers, and /or
• Regulating relations between employers or their organisations and a workers’
organization…” (ILO Convention 154)
• “A voluntary process for reconciling the conflicting interests and aspirations of
management and labour through the joint regulation of terms and conditions of
employment” Gwisai (2006)
• It is a process of negotiation between management and union representatives for the
purpose of arriving at mutually acceptable wages and working conditions for employees.
(Boone and Kurtz, 1999 p 424 – 425)
• Rycroft and Jordaan define Collective Bargaining as a voluntary process for reconciling
the conflicting interests and aspirations of management and labour though the joint
regulation of terms and conditions of employment.
• John Grogan defines it as the process in terms of which employers and employees
collectively seek to reconcile their conflicting goals through a process of mutual
accommodation.
Globalisation
Introductory food for thought
Question: What is the truest definition of Globalization?
Answer: Princess Diana's death.
Question: How come?
Answer: An English princess with an Egyptian boyfriend crashes in a French tunnel, driving a German car with a
Dutch engine, driven by a Belgian who was drunk on Scottish whisky: followed closely by Italian Paparazzi in
Japanese motorcycles; treated by an American doctor, using Brazilian medicines. And moreover this is sent to you
by a Zimbo, using American (Bill Gate’s) technology and you're probably reading this on your computer that uses
Taiwanese chips, and a Korean monitor, assembled by Bangladeshi workers in a Singapore plant, transported by
PAKISTANI lorry-drivers, hijacked by Indonesians, unloaded by Sicilian longshoremen, and trucked to you illegally
by Mexican.
That’s Globalization" my friend.
Thank You
What is?
Is the process by which development of a “global ideology” has begun to transcend national
boundaries with far reaching consequences for both the conduct of business transactions and the
theory and practice of management ( Vernon – Wortzel et al 1990)
• The growing economic dependence among countries as reflected in increasing cross
boarder flows of goods and services, capital and know-how” (Govindarajan and Gupta
1998a in Leopold et al 1999:99)
• Scholte (2000) viewed globalization as involving ‘the growth of supra-territorial relations
among people’ fostered by the development of high technology and increasing complex
international supply links are developed”
• Can be defined as a process of increasing global connectivity, integration and
interdependence in the economic, social, technological, cultural, political and institutional
spheres.
• It can be found to represent, for example, the process that reduces barriers between
countries and involve greater integration in world markets, thus, increasing the pressure
for assimilation towards international standards (Macdonald, 1997, Frenkel and Peetz,
1998, Ali, 2005).
• Economic aspects of globalisation are the most visible and important ones. These include,
but are not limited to: - economic competition amongst nations, rapidly expanding
international trade and financial flows and foreign direct investments (FDIs) by
multinational corporations (MNCs), disseminating advanced management practices and
newer forms of work organisation and in some cases sharing of internationally recognised
labour standards.
• Globalisation enhances competitiveness, both at a company level and at a national level,
which leads to company managements and governments to adopt strategies designed to
increase labour effectiveness in terms of productivity, quality and or innovation.
• In summary, globalisation involves economies that are opening up to international
competition and that do not discriminate against international capital. It therefore is
accompanied by liberalisation of markets and the privatisation of productive assets.
• At the same time, this phenomenon has obviously resulted in high unemployment,
increasing casual employment and weakening labour movements according to Ali
(2005)
Dimensions of Globalisation
1. Economic Globalisation - is the convergence of prices, products, wages, interest rates and
profits towards the standard of developed countries. The extent to which an economy will
globalise depends on the importance of certain processes at play, such as labour
migration, international trade, movement of capital and integration of financial markets.
2. Political Globalisation - this relates to the increasing number and power of international
organisations which influence or govern the relationships among nations and which
safeguards the rights of countries arising from social and economic globalisation.
3. Information Globalisation - refers to the rapid development of ICT worldwide, such as
global telecommunications infrastructure allowing for greater cross-border data flow.
4. Cultural Globalisation - this refers to the greater international culture exchange and
growth of cross cultural contacts between nations and people. It also involves the
expansion of multiculturalism and improved individual access to cultural diversity, as
well as the growth of international travel and tourism, while at the same time developing
and establishing a set of universal values.
Forces for Globalisation
• Lowering and removal of trade barriers
• Revolution in international transport and communication
• Emergence of a new wave of competitors
• New global markets segments
Globalization Solidifying Forces
• Trends towards regionalism e.g NAFTA (North American Free Trade Area) and EU.
These argue that open trade has more advantages than disadvantages and opt for the
creation of world with few or no trade restrictions.
• Abatement of ideological conflicts and the end of cold war. With the collapse of
Berlin Wall in 1989 and socialism in much of the world global co-operations expanded
virtually throughout the world. Governments became more inclined than ever to solve
international problems through constructive engagement and dialogue, e.g. Geneva
Convention for equal rights. Governments not only restructure economies through
liberalization and privatization but also invest in productive sectors and therefore the
adoption of free trade systems.
• The rising influence of NGOs in addressing and regulating a wide range of international
problems and issues eg Amnesty International and Green Peace contribute to the world
economic, social and technological integration. NGOs such as ISO set widely observed
standards in the global market place. This has affected even organizations such as Turnall
where it is under pressure from health and safety groups on its failure to meet standards
on OHS.
• Mobility of capital across the globe so as to seize better financial opportunities and
expansion of markets by investors. Over $US1 trillion is traded in the global foreign
exchange market and therefore solidifying the creation of a global market.
• Ease of foreign direct investments (FDIs) and labour flow across the globe.
Liberalization and restructuring of world economies enhance MNC’s investment
activities. Such organizations will be targeting cheap labour so that they achieve higher
returns from their investments. Programmes that include ESAP ensured the solidification
of globalization where there was trade liberalization in Zimbabwe in 1991/2 years and
was driven by World Bank and IMF super powers.
• Revolution in international transport and ICT (International Communications
Technology). This has eased communication, knowledge transfer and transportation and
therefore geographical space and time have lost their utility as a serious barrier for people
and business interactions. Internet has increased connectivity and worldwide information
can be easily accessed and decisions made in a short span of time.
Economic impacts of Globalisation
The most economic effects of economic globalisation include the following:
• Increasing integration of global economic activities (this leads to intensifying competition
among producers and a greater and more varied offer of diverse sources and destinations
of FDI. Capital movements are very high in an open international environment that
labour force, MNCs have played a key role in this regard, through relocating their
business activities while also subcontracting and substituting technology for human
labour. Many companies have been seen to be rationalising their operations in order to
strengthen their competitiveness, by reducing both wage and non-wage labour costs.
Evidence has proved that MNCs generally pay higher wages and employment benefits
than local companies, which significantly affects the industrial relations systems of the
host country.
• In addition, their relationships with trade unions are influenced by both the management
and workforce relations in the Company’s country of origin and the situation in host
country, which makes it effectively difficult to remove the rigidities of their policies. In
most instances, they do not recognise trade unions in bargaining on terms and conditions
of employment, except for when they are complying with the labour relations regulations
of that particular host country. (Macdonald, 1997, Ali, 2005)
• Rising Competitiveness – increased competition in global markets creates demand for
more specialised and better quality products, leading to a higher volatility in product
markets and shorter product life cycles, which ultimately requires companies to respond
quicker to changes in market demands (HR implications- the need to manage people in a
quality way, to build on audible readiness, to develop globats, the need for HR to
transcend the stewardship of taking care of conditions of employment to look at factors
that bring shareholder value and organisational competitiveness. Production
implications-the need to introduce new technologies and increase the scope of flexibility
in the production processes and resolve any information and coordination difficulties
which previously limited the production capacities of enterprises in different locations
around the world. The main focus in on individualising and decollectivising work
through new work organisation in the form of niches, SBUs, while on the other end, a
great deal of effort is placed on reducing the input cost to the production process by
replacing people with technologies and then emphasising on building higher value
capacities and skills on workers to perform a variety of jobs (multi-skilling). This has
blurred the functional and hierarchical distinctions between different types of jobs and
between labour and management in general, Organisation of work – efforts to improve
products through innovation, quality, availability and pricing have led companies to set
up cross-functional development TEAMS, thus transcending the traditional boundaries
between engineering, manufacturing, and marketing. All these developments have been
accompanied by standardised, segmented, stable production process which had
facilitated collective industrial relations (Macdonalds, 1997) and a continual shift of
employment from manufacturing to service oriented industries, i.e., jobs shift from
traditional manual occupations to various forms of white collar occupations, though
these have been different amongst countries, largely because of differences in stages of
development. The developments in technologies, for example, are affected by the
willingness of countries with technologies to provide other countries with them
(situations of sanctions), and also the extent to which economically developed countries
are seeking access to the emerging markets to sell their products. On the other hand,
developing countries face many barriers to entry into the developed world’s markets,
hence affecting their rate of growth; hence the impact and pace of growth vary from one
country to another.
• Relocation of economic activities
• Structural changes in the economy
• Rapid advancements and innovation.
Labour Markets Effects
The most influential effects here include: -
• Labour market flexibility (influences on labour market performance)
• Increasing labour migration
• Rising atypical non-standard forms of employment
• Changes in the content and working conditions
• Skills mismatch, multi-skilling and the need for lifelong learning
• Such factors vary from one country to another, but however are very fundamental in
determining a country’s competitive advantage labour market developments. Due to
growing competitiveness, many countries have become obliged to relax their
employment protection mechanisms in order to increase their labour market flexibility
(see s12-duration, particulars and termination of employment contracts), which has also
raised a need to the need to create a balance between labour market flexibility and social
protection (see Parts 11-Fundamental Rights of employees, 111-unfair labour practices as
examples). As a result, the need for cost efficiency and value addition has necessitated
reforms in the labour market thus bringing flexibility in order for companies to be able to
deliver goods at the right time and be strategically positioned closer to their customers.
Flexibility defined: -
• At a more global scale, we can identify flexibility as the capacity to which an economies
and organisations can adapt to global pressures.
• Flexibility – hours, part-time work, variable contracts, functional flexibility, pay
(including PRP common in Zim.)
• We can distinguish between various types of flexibility, that is, numerical flexibility,
which is when employers use non-standard contracts of employment to match labour
supply to product service demand and to parcel out work in a way that avoids exposure to
the risk of overstaffing. Employers achieve numerical flexibility when employees work
part time, fixed term and or short term contracts, zero hours, annual hours or work from
home, also including the use of short term casualised labour, agency workers including
contracting in and contracting out.
• We can also talk about functional flexibility, which is the requirement or expectation that
workers will perform tasks beyond those strictly specified in their main role or function.
This might entail cross working (performing other people’s jobs at the workplace),
expanding the number of tasks performed or working in Teams.
• We can also talk of geographical flexibility which results in managing across cultures as
another type of flexibility. Organisational flexibility is yet another strategic form of
flexibility, now this is a bigger form and beyond the deployment of flexible labour. It
relates to workplace change more generally (e.g Business process reengineering,
continuous process improvement, restructuring, mergers and acquisitions, takeovers etc)
as well as introduction of new forms of work organisation, job design and redesign etc.
• Complexities in flexibility in organisations have come in the form of new forms of
contracts, e.g., part time work, fixed term contracts, zero hour contracts, the increased
participation of women in the labour market, outsourcing of labour, actualisation and
subcontracting, all of which have reshaped the issue of security of employment, from job
security to employability security. However, in most African societies, or the developing
world in general, these have had a tendency of creating permanent unemployment hence
underemployment.
• Pillay (2006) argues that outsourcing and subcontracting have been seen by COSATU as
backdoor attempts to introduce labour market flexibility in the country- in other words,
lowering employment standards. This is in contrast with the developed world, which sees
a shortage in labour and skills threatening their competitiveness, productivity
performance and sustainability of their economic growth, hence resulting in them steering
labour migration to cover the void from the developing world in the form of temporary
employment. This introduces flexibility into the labour market while increasing
competition between foreign and domestic labour with varying implications for the
countries sending and receiving workers. (They put restrictions of migrant labour into
their markets in order to limit competition for work between domestic and foreign
workers.
• The other issue we can talk about is the issue of reorganisation of work, which result in: -
• Greater emphasis on team working
• Flattening of management hierarchies and the transfer of greater operational
responsibility and authority to lower level managers, supervisors and work teams. All
these are channelled at increasing workers’ commitment to the organisation and its
goals, as well as in establishing closer relationships between managers and workers
based on consultation and cooperation (Macdonald, 1997). In addition to that, there is
an argument that, while globalisation and rapid changes in economies demand that
workers become proactive, adaptable, multi-skilled, responsible and competent, these
demands put additional pressure on workers, thus exacerbating their difficulties at a
time when working conditions are deteriorating and wages are compressed. The
results of this change will be on an unbearable price, with ill health associated with a
decrease in quality of life and unfair costs for individuals and society.
• However, to become aware of the benefits arising from global integration, countries will
need effective education and training systems in order to supply the higher skills levels,
which underpin strong and flexible labour markets, economic growth and high
unemployment, address inequalities and ensure social cohesion (HM Treasury, 2005). In
countries where competition is based on quality and innovation, governments emphasize
the need for adequate skills training to improve workers’ competencies, esp. for those
countries where shortages of qualified labour exist, hence we have LIFELONG
LEARNING-which is based on continuous learning, as well as updating and upgrading of
skills as a viable alternative to lifelong employment (Senge-learning organisations,
Blanchard-today’s organisations share a commitment to constant improvement.......)
Globalisation and Industrial Relations
• If industrial relations systems do not adjust to globalisation, the danger arises that
companies will relocate their production to countries with fewer restrictions on business
activities, such as countries with less regulated labour markets and lower labour costs.
• Eric Foner has written: "Today's Chinatown sweatshops and Third World child labour
factories are the functional equivalent of colonial slavery in that the demands of the
consumer and the profit drive of the entrepreneur overwhelm the rights of those whose
labour actually produces the saleable commodity." 9 Working people have always resisted
such demands. At the end of the 20th century resistance will be stronger to the extent to
which we do not allow the scarecrow of "globalization" to disempower us. The system is
the same, its logic is the same, and the need for workers of the world to unite has never
been greater. It is time for greater clarity in our critique of the basic workings of what are
called "free markets" but are in reality class power. We need to counterpoise the need to
control capital and to have the economy serve human needs rather than accept the
continuous sacrifice of working people to such ideological constructions as
competitiveness, free markets, and the alleged requirements of globalization.
• Twist of trade union power from membership to information
• The impacts of the growing informal sector
Social Dialogue
Definition of Social Dialogue
• Social Dialogue is defined to include all types of negotiations or simply the exchange of
information between, or among representatives of governments, employers and workers,
on issues of common interest relating to economic and social policy. It is perceived as an
instrument of democracy, which promotes consensus building for the national good.
Prerequisite for Social Dialogue
• The following are key conditions for Social Dialogue:
• Establishment of a Social Dialogue culture;
• political tolerance and social cohesion for the sake of national development.
Labour should:
• be driven by a clear understanding that only through productivity enhancing measures
and commitment to excellence in the provision of goods and services, can they guarantee
workers good salaries, wages, employment and job security;
• adopt less conflictual labour relations;
• assist in building the capacity of workers.
Private sector should:
Labour
• The Zimbabwe Congress of Trade Union’s (ZCTU) (labour co-ordinator and co-
chairperson)
• Public Service Association (PSA)
• Zimbabwe Teachers Association (ZIMTA)
• Zimbabwe Nurses Association (ZNA)
• 5 members of the Executive Office of the ZCTU attend the TNF
At the beginning of September 2000, the social partners started negotiations aimed at the
conclusion of a Social Contract. The social partners agreed to start with a Declaration of
Intent towards a Social Contract. This is a prelude to the conclusion of a Social Contract and
its main objectives are:
• to create a conducive and tolerant environment for the discussion and conclusion of a
Social Contract;
• to overcome constituents differences and work towards a common goal being guided by a
common vision regarding the future of the economy;
• to remove the fears and mistrust among Social Partners;
• to commit social partners to sustainable Social Dialogue.
Concluding Remarks
• Social dialogue is the only way forward for this country to survive in depressed political
and economic environments.
• Economic problems have to be tackled by all social partners – government, labour,
capital, and society in general. Not one single party can resolve some of the teething
problems being faced by the country.