l8 ollcy and racLlce prlor Lo 1991

ln hls wlderanglng examlnaLlon of Lhe colonlal orlglns of lndlan lndusLrlal relaLlons

pollcy uesousa (1999) hlghllghLs how Lhe lndlan governmenL bullL on colonlal labor lnsLlLuLlons
and regulaLlons Lo fashlon an lndusLrlal relaLlons sysLem LhaL soughL Lo conLrol lndusLrlal confllcL
Lhrough a pleLhora of proLecLlve labor leglslaLlon (lnfluenced by Lhe sLrong Lles beLween Lhe ma[or
pollLlcal parLles and labor forged ln Lhe sLruggle for lndependence)
under Lhls reglme many aspecLs of workplace l8 and P8 were regulaLed lncludlng
deLalled laws on safeLy and healLh leave dlsmlssal and layoffs so as Lo avold sources of confllcL
(see uesousa 1999 for a deLalled hlsLorlcal evoluLlon of lndlan labor law) 1he lndusLrlal dlspuLes
acL mandaLed LhaL employers could layoff workers only Lemporarlly (180 days wlLh compensaLlon)
and provlded LhaL employers musL seek governmenL permlsslon (rarely glven ln vlew of Lhe close
Lles beLween labor and pollLlcal parLles) for reLrenchmenL and even closure of facLorles 1he
meLhod of dlspuLe seLLlemenL also reflecLs Lhe underlylng purpose of Lhls acL ensurlng LhaL confllcL
dld noL undermlne economlc developmenL 1hus alLhough Lhe rlghL Lo sLrlke exlsLed lL could be
28
exerclsed only afLer due noLlce and Lhe sLrlke had Lo be sLopped when elLher parLy requesLed Lhlrd
parLy lnLervenLlon Lhrough governmenL conclllaLlon offlcers lf conclllaLlon falled Lhe governmenL
had Lhe power Lo refer Lhe dlspuLe Lo compulsory arblLraLlon or Lo a labor courL or lndusLrlal Lrlbunal
(dependlng on Lhe naLure of Lhe dlspuLe) for flnal declslon 1hus laws regardlng labor sLandards
proLecLlon of employees agalnsL unfalr dlsmlssal and reLrenchmenL and closure would ln Lheory
reduce Lhe poLenLlal sources of confllcL and should confllcL arlse Lhe dlspuLe seLLlemenL mechanlsm
would be able Lo conLaln and resolve lL ln addlLlon glven Lhe absence of soclal securlLy leglslaLlon
and ln vlew of Lhe governmenLs goals Lo proLecL employmenL Lhe cosLs of soclal pollcy such as
reLlremenL (eg 1he rovldenL lund AcL 1932) medlcal care and Lo a cerLaln exLenL chlldcare
(Lhe lndlan lacLorles AcL 1948 mandaLes chlld care faclllLles ln large facLorles) were LhrusL upon Lhe
employer
1hls workercenLered lndusLrlal relaLlons pollcy was susLalned Lo a large exLenL by Lhe
counLrys counLry's lmporL subsLlLuLlon lndusLrlallzaLlon sLraLegy whlch emphaslzed Lhe growLh and
long Lerm developmenL of heavy caplLal goods lndusLrles (ln Lhe publlc secLor) wlLh largely
lndlgenous Lechnology (Sodhl 1993) coupled wlLh a pollcy of lndusLrlal llcenslng lmporL conLrols
and resLrlcLlons on forelgn ownershlp LhaL proLecLed boLh publlc and prlvaLe secLor flrms from
lnLernaLlonal compeLlLlon 1herefore as long as lSl was ln place Lhe hlgher cosLs and Lhe relaLlve
lack of flexlblllLy lmposed by Lhe lndusLrlal relaLlons regulaLlons dld noL pose a serlous problem
because lndlan manufacLurers dld noL have Lo compeLe ln Lhe lnLernaLlonal markeL (Plers and
kuruvllla 2000) 1he proLecLlonlsm afforded Lo manufacLurers also resulLed ln Lhe growLh of
lnefflclenL flrms (venkaLaraLnam 1993) ln lndusLrlal relaLlons Lerms Lhese lnefflclencles were
reflecLed ln excess employmenL ln publlc secLor lndusLrles such as power and ln Lhe prlvaLe secLor
ln an lnablllLy Lo negoLlaLe Lhe lnLroducLlon of laborsavlng new Lechnology or raLlonallzaLlon and
labor cosL conLrol sLraLegles LhaL lnvolved workforce reducLlon along wlLh a hlgh lncldence of
sLrlkes lurLher Lhe absence of a sole bargalnlng agenL leglslaLlon creaLed a mulLlpllclLy of unlons
aL each workplace unlons compeLed wlLh each oLher for membershlp ln a glven workplace
resulLlng ln hlghly confllcLual lndusLrlal relaLlons as Lhe condlLlons for a sLable parLnershlp beLween
employers and unlons dld noL exlsL (see 8amaswamy 1984 and venklLaraLnam 1993)
1hus alLhough Lhe lnlLlal goal of labor pollcy was Lo provlde workers wlLh a hlgh degree
of proLecLlon and ensure some degree of sLablllLy ln Lerms of boLh employmenL for workers as well
as confllcL avoldance collaboraLlve labormanagemenL relaLlons dld noL emerge lL should be noLed
however LhaL Lhere was more dlverslLy ln lndusLrlal relaLlons regulaLlon Lhan Lhe plcLure palnLed
29
abovelargely because Lhe dlfferenL sLaLes ln lndla enacL Lhelr own lndusLrlal relaLlons laws and
also because of dlfferlng lnsLlLuLlonal hlsLorles ln dlfferenL sLaLes lor example Lrade unlons ln
Mumbal (8ombay) have hlsLorlcally been qulLe dlfferenL ln Lhelr orlenLaLlon Lowards collecLlve
bargalnlng relaLlve Lo Lrade unlons ln CalcuLLa or oLher parLs of lndla 8esldes reglonal dlfferences
Lhere are also lnsLlLuLlonal dlfferences across lndusLrles
lnserL 1able 6 here

8ecenL Changes
ln 1991 lndlan economlc pollcy wlLnessed a dramaLlc Lurn wlLh Lhe dlsmanLllng of Lhe 40
year old lmporL subsLlLuLlon lndusLrlallzaLlon program and Lhe adopLlon of a llberallzed open
economy
11
1he effecLs of such a ma[or change ln economlc pollcy afLer 43 years of lSl have been
dramaLlc CvernlghL lndlan buslnesses have been LhreaLened by lnLernaLlonal compeLlLlon LhaL Lhey
are noL prepared Lo face 1hese pressures have resulLed ln ma[or debaLes regardlng lndusLrlal
relaLlons pollcy and have broughL abouL a shlfL ln Lhe relaLlve power of buslness and labor lndusLrlal
relaLlons leglslaLlon reform ls on Lhe agenda glven Lhe pressure from boLh employers and Lhe World
8ank Lo allow an exlL pollcy (Lo allow employers Lo reLrench workers or close lndusLrles MaLhur
1993) A LrlparLlLe commlLLee formed for Lhls purpose has recommended Lhe creaLlon of a safeLy neL
for reLralnlng of reLrenched workers and for reLrenchmenL compensaLlon alLhough Lhe leglslaLlon
has noL been changed Lo daLe (MaLhur 1993 Plers and kuruvllla 2000)
And lndusLrlal relaLlons pracLlces are also undergolng change Cne slgnlflcanL ouLcome
of sLrucLural ad[usLmenL and llberallzaLlon has been Lhe employer push for workforce reducLlon
Clven Lhe lnablllLy Lo reLrench employers have lnLroduced volunLary reLlremenL schemes (v8S) Lo
shed excess labor AlLhough preclse esLlmaLes of Lhe number of people on v8S are noL avallable
venkaLaraLnam (1993) pro[ecLed a LoLal of 3 mllllon [obs wlll be losL Lhrough v8S ln Lhe publlc
secLor As of end 1997 abouL 1 mllllon publlc secLor employees had avalled of v8S Plers and
kuruvllla (2000) also noLe Lhe lncreased lmporLance of numerlcal and funcLlonal flexlblllLy ln
employer sLraLegles ln Lhe prlvaLe secLor ln parLlcular
Lmployer pracLlces clearly show more aggresslon Lhan prevlously 1he number of
lockouLs has lncreased dramaLlcally even as sLrlkes have decllned (venkaLaraLnam 1993) ln
addlLlon ln order Lo avold unlonlzaLlon employers are promoLlng workers lnLo admlnlsLraLlve and
supervlsory ranks Lo Lake Lhem ouLslde Lhe purvlew of Lhe lndusLrlal ulspuLes AcL (venkaLaraLnam
1993) 1here are also lncreased efforLs of employers Lo lnvesL ln [olnL consulLaLlon for producLlvlLy
30
lmprovemenL venkaLaraLnam suggesLs LhaL for Lhe flrsL Llme employers feel LhaL Lhe governmenL
ls on Lhelr slde and Lhls has broughL abouL whaL many call employer mlllLancy wlLh collecLlve
bargalnlng conLracLs showlng an ascendancy of managemenL rlghLs
1he beglnnlngs of a governmenLbuslness coallLlon (ln conLrasL Lo Lhe prevlous
governmenLlabor coallLlon) ls lncreaslngly apparenL 1he LradlLlonal llnk beLween unlons and
pollLlcal parLles (each ma[or pollLlcal parLy has lLs Lrade unlon arm) provlded Lhe labor movemenL
wlLh conslderable volce desplLe Lhelr low denslLy flgures 1he governmenLlabor coallLlon has
weakened conslderably glven Lhe sLaLe's enLhuslasLlc supporL for economlc llberallzaLlon and
labor's opposlLlon Lo lL ln Lhe sLaLe of MaharashLra for Lhe flrsL Llme Lhe governmenL has declared
several prlvaLe secLor flrms as essenLlal and publlc uLlllLles permlLLlng a ban on sLrlkes ln Lhese
secLors (Plers and kuruvllla 2000) ln addlLlon MaLhur (1993) suggesLs an lncreased lncldence of
unlon avoldance pollcles by employers
Clearly Lhe l8 sysLem ls exhlblLlng Lenslons as lL aLLempLs Lo break wlLh Lhe rlgld exlsLlng
pollcles and pracLlces 1he need Lo compeLe boLh domesLlcally and globally wlLh Lhe besL ln Lhe
world has forced Lhe lndlan employer Lo sLrlve for lncreased numerlcal flexlblllLy and Lhls has been
manlfesLed ln Lhe need Lo reduce headcounL resLrucLure lndusLrlal relaLlons aLLempL
labormanagemenL collaboraLlon and ln some cases Lo avold unlons Plers and kuruvllla (2000) ln a
wlde ranglng survey of lndlan lndusLry ln 1997 (16 flrms ln flve lndusLrles) provlde numerous
examples of Lhe movemenL Lowards numerlcal flexlblllLy and a clear lncrease ln greenfleld nonunlon
planLs AnoLher recenL sLudy coverlng 300 collecLlve bargalnlng agreemenLs ln Lhe lndlan
prlvaLe secLor found LhaL one ouL of Lwo lncluded provlslons for greaLer numerlcal flexlblllLy and
closer cooperaLlon ln Lhe labormanagemenL relaLlonshlp (venkaLaraLnam 1997) And alLhough Lhe
leglslaLlon has yeL Lo be changed Lhe flrmlevel sLraLegles emphaslze numerlcal flexlblllLy more
Lhan anyLhlng else
ln essence Lhese pracLlces have accenLuaLed Lhe dlverslLy exlsLlng ln lndlan lndusLrlal
relaLlons conslderably 8haLLacher[ee (2001) suggesLs LhaL Lhere ls so much more varlaLlon ln Lhe
lndlan lndusLrlal relaLlons scenarlo LhaL lL ls no longer approprlaLe Lo Lhlnk of one naLlonal lndlan
l8 sysLem Cverall Lhe evldence clearly suggesLs a shlfL away from malnLalnlng labor peace" as a
key underlylng lmperaLlve of Lhe lndusLrlal relaLlons sysLem and Lowards Lhe enhancemenL of flrmlevel
compeLlLlveness Lhrough lncreases ln numerlcal flexlblllLy" as lndla becomes more lnLegraLed
lnLo Lhe world economy

Change vs 1ransformaLlon
Clearly Lhere have been changes ln Aslan lndusLrlal relaLlons sysLems We have argued LhaL
Lhe mosL sallenL consLralnL faclng Lhe acLors ln Lhe sysLems has changed from Lhe need Lo malnLaln
labor peace and lndusLrlal sLablllLy Lo Lhe need Lo enhance flrmlevel compeLlLlveness by promoLlng
numerlcal and funcLlonal flexlblllLy 1he key quesLlon LhaL we wlsh Lo address here ls wheLher Lhese
changes amounL Lo a LransformaLlon" underway ln Aslan l8 sysLems noLe LhaL slmllar changes ln
Lhe advanced lndusLrlal naLlons have led auLhors Lo argue for Lhe exlsLence of fundamenLal
LransformaLlons ln lndusLrlal relaLlons (a Loplc LhaL ls hoLly debaLed) Slnce Lhe changes ln lndusLrlal
relaLlons ln many counLrles ln Asla appear Lo be drlven by some of Lhe same facLors as ln Lhe
advanced lndusLrlallzed naLlons ouLslde of Lhe reglon (le reduced renLs due Lo lncreased
compeLlLlon) lL ls relevanL Lo ask Lhe quesLlon here as well
We use a recenL paper on Lhe naLure of lndusLrlal relaLlons LransformaLlon by Lrlckson and
kuruvllla (1998) Lo lnLerpreL Lhe changes ln Aslan lndusLrlal relaLlons Accordlng Lo Lhelr
framework Lhe key elemenL ln decldlng wheLher a LransformaLlon has occurred ls wheLher Lhere has
Lhere been a serlous reconslderaLlon by Lhe key acLors of Lhe deep sLrucLure of Lhe lndusLrlal
relaLlons sysLem Lhe neLwork of fundamenLal lnLerdependenL cholces LhaL deLermlne Lhe baslc
conflguraLlon lnLo whlch Lhe sysLem's unlLs are organlzed Any change LhaL does noL lnvolve a
43
change ln deep sLrucLure cannoL be labeled LransformaLlon Applylng Lhls schema Lo Lhese counLry
cases we flnd Lhe followlng Lhree of Lhe sysLems have adapLed Lo meeL newly sallenL consLralnLs
wlLhouL slgnlflcanL changes ln underlylng deep sLrucLure (Slngapore Malaysla and Lhe hlllpplnes)
whlle Lwo oLhers show LenLaLlve evldence of LransformaLlon (lndla and !apan) and Lwo oLhers show
more unamblguous evldence of LransformaLlon (SouLh korea and Chlna)
lor lnsLance ln Lhe case of SouLh korea a wlde range of evldence suggesLs LhaL a
LransformaLlon ls underway osL democraLlzaLlon Lhere was a reconslderaLlon of lndusLrlal
relaLlons pollcy and a rlse ln mlllLanL unlonlsm and wage levels buL Lhe governmenL's response on
Lhe one hand encouraged Lhe growLh of new unlons whlle on Lhe oLher hand conLlnued suppresslve
pollcles by refuslng Lo recognlze alLernaLlve Lrade unlon federaLlons uurlng Lhe perlod 19871993
Lhe governmenL aLLempLed ln varlous dlfferenL ways Lo sLrucLure bargalnlng wlLhouL much success
and employers and unlons began a process of elLher deallng wlLh each oLher or experlenclng hlgher
levels of lndusLrlal confllcL 1hen Lhe onseL of Lhe economlc crlsls broughL abouL Lhe condlLlons for
a ma[or change ln lndusLrlal relaLlons 1he formaLlon of a LrlparLlLe l8 sysLem coupled wlLh
recognlLlon of alLernaLlve federaLlons coupled wlLh granLlng of bargalnlng rlghLs Lo publlc secLor
workers and Lhe leglLlmlzaLlon of layoffs Lhrough changes ln Lhe law all puL LogeLher suggesL a
change ln Lhe deep sLrucLure of Lhe SouLh korean sysLem we argue 1he fundamenLal change ln
SouLh korean l8 from a deep sLrucLure vlewpolnL ls Lhls lor years Lhe korean lndusLrlal relaLlons
sysLems was heavlly conLrolled by Lhe governmenL wlLh Lhe expllclL purpose of puLLlng economlc
developmenL over labor rlghLs wlLh mlnlmal volce accorded Lo labor 1he currenL sysLem LhaL has
[usL been puL ln place ls radlcally dlfferenL ln LhaL labor ls a parLner ln Lhe process bllaLerlsm ln
lndusLrlal relaLlons ls a glven and Lhe focus on rlghLs ls paramounL ?eL Lhere are lndlcaLlons LhaL
Lhe new deal wlll noL hold as unlons and employers have recenLly opLed ouL of Lhe 1rlparLlLe
commlsslon 1hls suggesLs conLlnued experlmenLaLlon as Lhe acLors ln Lhe sysLem seek Lo develop a
new sLable deep sLrucLure
As far as Lhe Chlnese sysLem ls concerned lL ls relaLlvely easy Lo make a [udgemenL ln
favor of LransformaLlon 1here appears Lo be a reconslderaLlon of deep sLrucLure of lndusLrlal
relaLlons ln Lhe sLaLe sysLem ln Chlna as many observers have noLed Lhere has been an abrupL
deparLure from Lhe lron rlce bowl" Lo a more markeLorlenLed lndusLrlal relaLlons sysLem
1ransformaLlon ln lndusLrlal relaLlons ls llnked Lo economlc pollLlcal and soclal LransformaLlon as
well (!ackson 1994)
So Loo Lhere ls some evldence of LransformaLlon ln Lhe lndlan and !apanese cases
44
alLhough Lhe evldence ls more amblguous here Lhan ln Lhe prevlous Lwo cases ln Lhe case of lndla
Lhe changes ln lndla's economlc developmenL sLraLegy ln Lhe 1990s have broughL abouL rapld
changes ln lndusLrlal relaLlons pracLlce lor Lhe flrsL Llme employers are on Lhe offenslve unlons
have losL Lhelr pollLlcal power as Lhelr LradlLlonal pollLlcal parLners (Lhe pollLlcal parLles) have been
prollberallzaLlon ln dlrecL opposlLlon Lo Lhe unlons' poslLlon and Lhe range of lndusLrlal relaLlons
ouLcomes have varled conslderably compared Lo Lhe pasL 1he lnLeresLs of Lhe lndusLrlal employer
appear Lo be more lmporLanL Loday (ln Lhe governmenL's eyes) Lhan prevlously 1here have been
several revoluLlonary changes ln labor law aL Lhe sLaLe level alLhough cenLral governmenL labor laws
have noL yeL been changed Lhese are belng debaLed aL Lhe momenL Arguably Lhe shlfL ln some of
Lhe baslc bellefs abouL lndusLrlal relaLlons (le from a bellef ln a very hlgh degree of proLecLlon for
workers workers musL be proLecLed and noL allowed Lo be lald off or reLrenched based on sLrong
unlonpollLlcal parLy Lles ln an lmporLsubsLlLuLlon reglme Lo a much more markeLbased seL of
assumpLlons) suggesLs Lhe beglnnlngs of reconslderaLlon of Lhe deep sLrucLure of lndlan lndusLrlal
relaLlons
ln !apan Lhe changes ln Lhe economy coupled wlLh Lhe new law LhaL permlLs shorLLerm
employmenL conLracLs coupled wlLh varlous new approaches of flrms wlLh respecL Lo llfeLlme
employmenL pracLlces are suggesLlve of Lhe beglnnlngs of change ln Lhe deep sLrucLure of Lhe
!apanese sysLem Cne could argue LhaL Lhe predomlnance of numerlcal flexlblllLy sLraLegles ln a
counLry wlLh very flexlble lnLernal labor markeLs (whlch had become enLrenched over Llme Lhrough
supporLlng and relnforclng pracLlces and lnsulaLed from Lhe wlder labor markeL) ls evldence LhaL Lhe
carefully consLrucLed !apanese employmenL sysLem ls breaklng up 1here ls change ln almosL every
esLabllshed feaLure of !apanese employmenL and lndusLrlal relaLlons pracLlce and lnsLlLuLlons wlLh
lnLenslfled change ln Lhe 1990s Such a breakup mlghL suggesL a reconslderaLlon of Lhe deep
sLrucLure reflecLed ln Lhe Lhree plllars" alLhough Lhe new seL of baslc underlylng assumpLlons ls
dlfflculL Lo dlscern aL Lhls polnL
13
ln conLrasL Lhe lndusLrlal relaLlons sysLems of Slngapore Malaysla and Lhe hlllpplnes
show much less evldence of LransformaLlon as per Lrlckson and kuruvllla's (1998) deflnlLlon
CerLalnly Lhey have changed ln some respecLs buL Lhere has been llLLle evldence of reconslderaLlon
of Lhe deep sLrucLure underlylng Lhe sysLems 1he changes can be classlfled as more adapLlve and
are all conslsLenL wlLh Lhe lmperaLlve of numerlcal and/or funcLlonal flexlblllLy 1here have been
changes ln whaL lnsLlLuLlons do as well as flrm pracLlces
ln Slngapore Lhe assumpLlons underlylng Lhe sysLem have remalned Lhe same LhaL
43
lndusLrlal relaLlons arrangemenLs should prlmarlly enhance economlc developmenL Lhrough Lhe
preservaLlon of boLh sLablllLy and funcLlonal flexlblllLy LhaL Lhe besL way of achlevlng Lhls ls Lo
creaLe LrlparLlLe lnsLlLuLlons LhaL provlde unlons wlLh volce aL Lhe naLlonal pollcy maklng level buL
resLrlcL Lhelr lnfluence aL Lhe workplace level and LhaL l8 and P8 lnsLlLuLlons musL conLlnuously
adapL and change ln deference Lo economlc developmenL goals AlLhough Lhe baslc bellefs
underlylng Slngapore's l8 sysLem have noL changed Lhe varlous l8 and P8 lnsLlLuLlons have ofLen
adapLed Lo meeL changlng economlc needs lor example when lL became clear LhaL naLlonallevel
and lndusLrylevel bargalnlng posed a LhreaL Lo flrms (whose dlfferenL economlc clrcumsLances
mandaLed dlfferenLlal wage levels and lncreases) Lhe sLrucLure of Lrade unlons was changed ln Lhe
early 1980s (enLerprlse unlons were mandaLed) Slmllarly whlle Lhe LrlparLlLe naLlonal Wages
Councll soughL ln Lhe 1960s Lo promoLe unlform wage lncreases Lo malnLaln Slngapore's economlc
compeLlLlveness as a lowwage manufacLurlng cenLer wlLh Lhe lmperaLlve of funcLlonal flexlblllLy
ln Lhe 1980s and 1990s Lhe nWC now promoLes flexlble pay sLraLegles for dlfferenL lndusLrles and
flrms and Lakes Lhe lead ln dlssemlnaLlng lnformaLlon abouL pay llnked Lo producLlvlLy ?eL Lhere
ls llLLle evldence of reconslderaLlon of deep sLrucLure
ln Malaysla as Plers and ArudsoLhy (1999) have suggesLed Lhe deep sLrucLure of Lhe
sysLem ls premlsed on a governmenLbuslness collaboraLlon LhaL has soughL Lo sysLemaLlcally
exclude labor from Lhe declslonmaklng process aL Lhe naLlonal level and Lo faclllLaLe boLh
numerlcal and funcLlonal flexlblllLy by llmlLlng labor volce Lhrough a number of dlfferenL
mechanlsms 1hls formed Lhe basls for Lhe governmenL's hlghly lnLervenLlonlsL l8 sLraLegy durlng
Lhe perlod of exporL orlenLed lndusLrlallzaLlon and lLs laLer sLraLegy of encouraglng funcLlonal
flexlblllLy Lhrough Lhe creaLlon of new lnsLlLuLlons for skllls developmenL whlle aLLempLlng Lo
ensure LhaL Lhe elecLronlcs secLor remalned nonunlon 1he one slgnlflcanL change ln Malaysla ls
Lhe emphasls on LrlparLlsm durlng Lhe Aslan economlc crlsls whlch may be suggesLlve of Lhe
beglnnlngs of a reconslderaLlon of Lhe exlsLlng deep sLrucLure based on governmenLemployer
auLarchy Cn Lhe oLher hand lL appears Lo Lhls polnL LhaL LrlparLlsm has very llmlLed ob[ecLlves Lo
allevlaLe unemploymenL Lo promoLe funcLlonal flexlblllLy and Lo resLraln soclal unresL ln Lhe wake
of economlc resLrucLurlng
ln Lhe hlllpplnes Lhe baslc underlylng concepL of a plurallsLlc l8 sysLem has remalned
essenLlally unchanged (alLhough lL was Lemporarlly suspended under Lhe Marcos reglme) 1he
plurallsLlc sysLem has resulLed ln weak and pollLlcally orlenLed unlons Lhrough Lhe hlsLorlcal
developmenL of a hlghly fragmenLed labor movemenL LhaL conLlnues Lo Lhls day Cver Lhe years Lhe
46
low cosL exporLorlenLed lndusLrlallzaLlon sLraLegy and a huge labor surplus have weakened unlons
Lo a conslderable exLenL and Lhe new elecLronlcs lndusLry ls largely nonunlon 1he posLMarcos era
has Lhus seen a reLurn Lo a plurallsLlc and democraLlc yeL hlghly fragmenLed l8 sysLem wlLh
employers ln large secLors of Lhe economy mosLly free Lo pursue nonunlon sLraLegles wlLh llLLle
lnLerference much as ln Lhe unlLed SLaLes 1he emphasls on LrlparLlsm durlng Lhe Aslan economlc
crlsls has been as ln Lhe Malayslan case hlghly llmlLed Lo daLe 1hus we argue LhaL mlnlmal
reconslderaLlon of deep sLrucLure has occurred ln Slngapore Malaysla and Lhe hlllpplnes Lhe
baslc soclal bargaln as regards lndusLrlal relaLlons has noL fundamenLally changed ln Lhese
counLrles
Why do some of Lhese sysLems adapL wlLhln Lhe conLexL of a sLable deep sLrucLure whlle
oLhers Lransform? AlLhough we do noL have a deflnlLlve answer Lo LhaL quesLlon our cases suggesL
Lhe basls for Lhe developmenL of an lnlLlal hypoLhesls ln Lhls regard 1he adapLers (Slngapore
Malaysla and Lhe hlllpplnes) are characLerlzed by sLrong and acLlvlsL sLaLes (Slngapore and
Malaysla) and/or sLrong employers (Malaysla and Lhe hlllpplnes) and elLher lncorporaLed
(Slngapore) or weak unlons (Malaysla and Lhe hlllpplnes) wlLh a relaLlvely sLable economlc
envlronmenL 1he Lransformers are naLlons whose economlc envlronmenLs have changed radlcally
(lndla and Chlna) or whlch are characLerlzed by a comblnaLlon of a sLrong sLaLe sLrong employers
and sLrong unlons (SouLh korea) We leave Lhe LesLlng of Lhls LenLaLlve hypoLhesls Lo fuLure
research
Concluslon
Cur examlnaLlon of a llmlLed buL represenLaLlve seL of Aslan naLlons suggesLs LhaL Lhe
changes ln lndusLrlal relaLlons durlng Lhe 1980s and 1990s reflecL Lhe process of ad[usLmenL from a
prevlously sallenL consLralnL (labor peace and lndusLrlal sLablllLy) Lo Lhe new lmperaLlve of
enhanclng flrmlevel compeLlLlveness Lhrough numerlcal and funcLlonal flexlblllLy 1he recenL
changes ln Aslan lndusLrlal relaLlons sysLems have been slmllar Lo Lhose LhaL have occurred ln Lhe
WesL ln LhaL Lhe emphasls has shlfLed Lo achlevlng varlous klnds of flexlblllLy alLhough Lhe already
decenLrallzed Aslan sysLems have noL experlenced slgnlflcanL furLher decenLrallzaLlon 1he
flexlblllLy enhanclng sLraLegles followed by Lhe dlfferenL Aslan sysLems (wheLher numerlcal or
funcLlonal) appear Lo be medlaLed by Lhe currenL and prevlous levels of l8 sysLem rlgldlLy sources
of compeLlLlve advanLage of flrms sLaLe pollcles and lnsLlLuLlons and labor unlons ln some
counLrles Lhe changes ln lndusLrlal relaLlons suggesL a LransformaLlon reflecLlng a serlous
reconslderaLlon of Lhe deep sLrucLure of lndusLrlal relaLlons whlle oLher naLlons have adapLed Lo Lhe
47
changed consLralnLs more smooLhly and wlLhouL fundamenLal reconslderaLlon of Lhe underlylng
loglcs of Lhose sysLems ln general Lhe shlfL ln consLralnLs aLLrlbuLable Lo lncreased compeLlLlve
pressures ls pushlng lndusLrlal relaLlons arrangemenLs ln Asla ln Lhe same dlrecLlon as lL has done
ln Lhe WesL whlch suggesLs Lhe posslblllLy of convergence



MosL Aslan and aclflc economles have very slmllar and generally qulLe advanced leglslaLlon
esLabllshlng mlnlmum Lerms and condlLlons of employmenL for workers ln Lhe formal secLor CfLen
Lhls reflecLs an lnherlLance from former colonlal admlnlsLraLlons 8uL much of Lhls leglslaLlon has
LradlLlonally been relaLlvely narrowly focused and resLrlcLlve 1hls does noL reflecL a vlew LhaL l8 ls
noL lmporLanL Lo naLlonal economlc developmenL lL ls more a lack of undersLandlng LhaL l8 can make
a creaLlve conLrlbuLlon Lo reallse Lhls developmenL Lhrough approprlaLe pollcy and leglslaLlve
frameworks and aLLlLudes 1here ls also a very wlde varlaLlon ln Lhe exLenL Lo whlch compllance wlLh
labour sLandards and proLecLlon laws has been achleved around Lhe reglon 1hls ls because Lhe labour
lnspecLlon educaLlon and enforcemenL funcLlons along wlLh oLher funcLlons ln many MlnlsLrles of
Labour have remalned weak and underdeveloped 1herefore for many workers ln Lhe reglon Lhe
proLecLlons provlded ln leglslaLlon have noL been guaranLeed ln pracLlce
l8
ln Lhls area Lhe dlfferences ln pollcles laws lnsLlLuLlons and pracLlces are qulLe marked across Lhe
reglon as Lhe followlng lssues lllusLraLe
- 8argalnlng
ln Lhe pasL boLh cenLrallsed and decenLrallsed approaches have been followed buL Lhe slLuaLlon ls
now changlng AusLralla new Zealand and Slngapore (and korea and 1alwan/Chlna unLll Lhe
democraLlzaLlon perlod) have LradlLlonally had cenLrallsed collecLlve bargalnlng arrangemenLs
applylng wage lncreases on an economywlde basls (alLhough Lhe acLual mechanlsms Lo achleve Lhls
varled from one counLry Lo anoLher) ln mosL oLher counLrles more decenLrallzed bargalnlng
arrangemenLs have applled aL Lhe lndusLry and/or enLerprlse levels
uurlng Lhe pasL decade Lhe Lrend has flrmed subsLanLlally ln favour of a more decenLrallzed
approach Lach of AusLralla new Zealand and Slngapore have abandoned cenLrallzed wage flxaLlon
ln favour of more flexlble bargalnlng arrangemenLs recognlslng Lhe dlfferenL compeLlLlve
clrcumsLances faced by lndlvldual lndusLrles and enLerprlses
ln a number of counLrles ln LranslLlon (eg Chlna and Mongolla) leglslaLlon ls sLlll belng developed or
has Lo be developed (eg Lao u8) Lo provlde a framework for collecLlve bargalnlng Also
employers and workers ln Lhese and oLher counLrles ln LranslLlon lack knowledge of Lhe concepL and
pracLlce of collecLlve bargalnlng and pracLlcal skllls ln negoLlaLlon Moreover Lhelr represenLaLlve
organlzaLlons are sLlll Loo underdeveloped Lo provlde Lhe level of advlce lnformaLlon and Lralnlng
requlred Lo ensure effecLlve bargalnlng (and lndeed supporL ln relaLlon Lo oLher areas of l8)
- unlon sLrucLures
1rade unlon federaLlons naLlonal secLoral/lndusLrlal and/or reglonal have developed as Lhe mosL
common feaLure of unlon sLrucLures ln Lhe reglon (eg !apan lndla Malaysla hlllpplnes and
1halland) A number of counLrles have only one Lrade unlon federaLlon (eg Chlna and Slngapore)
mosL counLrles have aL leasL Lwo or Lhree whlle ln aklsLan Lhe hlllpplnes and 1halland Lhere are
conslderably more ln lndla Lhere ls a mulLlpllclLy of unlons aL Lhe naLlonal sLaLe and lndusLry level
1here ls also an lncreaslng lncldence of lndependenL unlons aL Lhe enLerprlse level ln LhaL counLry noL
llnked Lo any naLlonal federaLlon ln addlLlon ln some counLrles (eg counLrles ln LranslLlon) Lhere
may be naLlonal federaLlons buL elLher no or only llmlLed lndusLry level Lrade unlon sLrucLures 1hese 13
federaLlons wlLh Lhe excepLlon for example of lndla Srl Lanka and Slngapore do noL appear Lo
have had a slgnlflcanL lnfluence on naLlonal pollcymaklng and lmplemenLaLlon
1he scenarlo ln Lerms of unlon represenLaLlon ln Lhe workplace has agaln varled ln mosL counLrles ln
Lhe reglon only one unlon ls legally recognlsed for bargalnlng purposes some counLrles encourage
enLerprlse unlons (eg !apan and Malaysla) and oLhers allow mulLlple unlons (eg AusLralla and new
Zealand)
- 1he scope of bargalnlng
1here have been conslderable dlfferences beLween counLrles ln Lhe sub[ecL areas of collecLlve
bargalnlng lndla for example enables Lhe parLles Lo bargaln over any lssue of muLual concern AL
Lhe oLher exLreme are counLrles llke Slngapore and Malaysla whlch do noL allow bargalnlng ln
relaLlon Lo maLLers falllng wlLhln Lhe area of socalled managemenL prerogaLlve (eg Lransfers
promoLlons redundancles eLc) A number of counLrles also requlre cerLlflcaLlon of collecLlve
agreemenLs whlch may be sub[ecL Lo cerLaln precondlLlons (eg AusLralla Malaysla and Slngapore)
ln recenL years some counLrles (eg AusLralla and new Zealand) have been provldlng greaLer
freedom Lo Lhe lndusLrlal parLles Lo deLermlne Lhelr own bargalnlng agenda
- 8esLrlcLlons on lndusLrlal acLlon
1he number of sLrlkes has been sLeadlly decllnlng across Asla and Lhe aclflc durlng Lhe pasL Lhe pasL
10 13 years (wlLh Lhe excepLlon of korea and 1alwan/ Chlna ln Lhe afLermaLh of democraLlzaLlon)
1hls does noL however mean LhaL Lhe lncldence of lndusLrlal dlspuLes has shown a slmllar reducLlon
ln facL ln some counLrles Lhe level of such dlspuLes has lncreased (eg Malaysla and Lhe hlllpplnes)
alLhough noL Lo a slgnlflcanL exLenL 1here ls also evldence of an lncreaslng lncldence of lndusLrlal
dlspuLes ln some forelgnowned or managed enLerprlses ln some counLrles (eg Chlna and vleLnam)
lL mlghL also be noLed LhaL Lhe decllne ln Lhe lncldence of sLrlkes ln lndla was accompanled by a sLeep
rlse ln Lhe lncldence of lock ouLs
MosL counLrles ln Lhe reglon sLlll lmpose varlous resLrlcLlons on sLrlkes and oLher forms of lndusLrlal
acLlon for Lhe purpose of faclllLaLlng unlmpeded economlc developmenL 1he mosL common forms of
resLrlcLlons lnclude prohlblLlons ln relaLlon Lo lndusLrlal acLlon lnvolvlng essenLlal servlces and Lhe
publlc secLo