Comparative analysis of Industrial Relations in UK,USA, Japan, Germany and Sweden

By DEVAN GOPAL

Industrial Relations in Japan

Main Features
Kaisha system : System of workers participation(where individuals are involved in decision making) Ringi Sido: Method of decision making Group decision making where a proper decision making sequence is used Seamonds triangle of Discretion : In Strategy formulation, discretionary power of different level of management

 Trade unions
The Japanese Trade Union Confederation (Rengo) The National Confederation of Trade Unions (Zenroren)

Level of wage negotiations

Wage negotiations named Spring Wage Offensive take place each spring as a concerted effort of most labor unions.

Minimum wage
Minimum wages are determined through the investigation and deliberation of the Minimum Wage Council, and differ across regions and sectors.

Employers' associations
The Japanese Federation of Employers Associations (Nikkeiren) is the main employers association.

Promotion of employee participation in profits and enterprises results (Pepper) Employee participation in company results has been increasing and new benefit structures have been emerging, e.g. a stock option scheme
Formal / official arbitration The Labour Relations Commission provides conciliation, mediation and arbitration for labor disputes. The Prefectural Labour Relations Commission carries out initial examination and the Central Labour Relations Commission manages re-examination Mediation, Conciliation and Arbitration voluntary The Labour Relations Adjustment Law provides for a system of addressing disputes between labor and management including conciliation, mediation and arbitration with a strong emphasis on the voluntary settlement of labor disputes

General description / Legal framework The Japanese constitution guarantees fundamental rights: Freedom of association, Freedom of collective bargaining Freedom to act collectively (Art. 29) The Trade Union Law defines trade unions (Art. 2) and unfair labor practices (Art. 7). The Labour Relations Adjustment Law provides labor dispute settlement procedures
Maximum duration of probationary period During the probationary period, workers that have been employed for more than 14 days must be provided at least 30 days advance notice by the employer in case of dismissal

Regulations on individual redundancy Firms are allowed to dismiss workers with 30 days of notice. Management must demonstrate "just cause" before discharging employees Limitations on working time Special regulations governing the protection of female workers in terms of overtime, rest-day work and work at night have been abolished

Industrial Relations in Sweden

Some charctersitcs features of work place bargaining in Sweden

There is no uniform structure for workplace bargaining. Process is largely fluid and flexible one rather than well defined and highly structured. Workplace negotiation is more informal and unwritten. Scope of bargaining is limited in terms of issues. Most common issues are Wage and salary.

Relationship between workplace bargaining and strikes:

The strikes in Sweden metal working Industry was used as means to force the management to either concede higher wages or to extend the scope of workplace bargaining, especially manning ,hiring/firing issues.

The management rarely brings in third parties to assess in negotiation. In Sweden rates of pay, other conditions of employment of the majority of wage and salary earners are settled by collective agreements.

 The employees in Sweden are highly unionized :95% of manual workers, 70% white collar workers employed in manufacturing industry belong to trade unions.
Collective bargaining in Sweden is still basically decentralized affairs which in practice leaves a good deal of room for negotiation of agreements both at the level of Industry and in individual firm method.

Industrial Relations in Germany

Main features of structure and functions of IR in Federal Republic of Germany

The trade unions are mostly organized at industry level. Certain rights have been established enabling every employee to participate through his elected representatives at plant level in some areas of management activity.

The trade unions institutionally are not present within the undertaking. Their influence is indirect; operating mainly through personal link between works council members and union members on account of the fact that many Works Council members hold union office.
Management has to report to the works council about the economic situation of the undertaking every three months.

 Collective Bargaining: In Germany, under Collective Agreements Act, the validity of a collective agreement is not conditional upon govt. approval. The German Statute law has nothing to say regarding the actual process of collective bargaining or settlement of disputes arising in that connection. Rules in this respect have largely been worked out by court decisions mainly by Federal Labor Court and Federal Constitutional Court. The DGB and BDA organizations have special departments concerned with collective bargaining matters from which their affiliates can obtain information and advice.

 Labour Participation in Management:(Codetermination)

All the companies in coal, iron and steel industries with over 1000 employees are subject to codetermination law of 1951. All other companies with 500 to 2000 employees are subject to Workers Constitution Act of 1952, and those with over 2000 employees (except coal, iron and steel) must adhere to the Co-determination Act of 1976. General Feature of Co-determination; The system is based on three main institutions Works Council Supervisory Board Labour Directors on the management boards Legal rights and obligation of the work councils: The right to co determination The right to consultation and participation. The right to information.

 General description / Legal framework: The German constitution, the Basic Law (Grundgesetz), guarantees
Right to free collective bargaining Freedom of association (Art. 9, Section 3;) There is no uniform regulation under German labour law:

No statutory minimum wage Nor a statutory right to strike.

The task of the trade unions and the employers' organisations: To lay down the conditions of employment in comprehensive collective agreements and To adjust agreements to the prevailing economic and social developments.

 Limitations on working time: Statutory limit: 48 hours/week.

Maximum duration of probationary period: In general, no more than 6 months. 14 days' notice required during the probationary period . Regulations on individual redundancy: The period of notice is 1 to 7 months. It may be shortened or extended by collective agreement or extended on the basis of individual contracts. Notice may be given only for objective reasons. The average redundancy pay is 13 weeks' pay.

Industrial Relations in United Kingdom

 Employers' associations The Confederation of British Industry (CBI) is the main representative body of employers. Its membership includes both firms and industry-based associations. Trade unions The Trades Union Congress (TUC) is the umbrella organisation of the trade unions. The TUC has no power to bargain directly with employers; its main functions are the representation of the trade union movement as a whole and trade union education. There are over 200 registered unions in Britain, roughly 70 of which are affiliated with the TUC. Level of wage negotiations Wage determination in the UK has always been more decentralized than elsewhere in Europe.

 The legal framework of IR in UK: The improvement in the functioning and status of organizations of workers and employers Protection of Trade unions members and officials. Regulation of terms and conditions of employment. Streamlining the procedure for settlement of trade disputes. Provision to strengthen the process of collective bargaining The govt. passed the Trade union act in 1871 to recognize trade unions and their acts as legal.

 The legal position was further strengthened by a series of Acts and these being:
The Conspiracy and Protection of Property Act, 1875 The Trade disputes Act, 1906 The Trade Union Act, 1913 The Trade disputes and trade Union Act, 1927 The Trade Union and Labor relations Act, 1974 The Employment Protection Act, 1975

Along with the trade unions, the govt. has also provided for statutory recognition of employers association as legal corporate bodies under the Trade union and Labour Relations Act, 1974. Under this Act Associations have the same right as Trade unions.

 Security of Employment; Discharges, dismissal or redundancy serves as the potential cause of trade disputes. The Act governing security are: Contracts of Employment act, 1963 and 1973 The redundancy Payments Act, 1965 and 1969 The Trade union and Labour Relations Act,1979 and 1976 The Employment Protection act ,1975

Settlement of Trade The Govt. has enacted laws if the parties dont settle their disputes by collective bargaining. In 1896 the conciliation act was passed to establish the conciliation procedure. In 1919 another law providing voluntary arbitration through a statutory industrial court was passed.

 Mediation, Conciliation and Arbitration voluntary: The ACAS (Advisory, Conciliation and Arbitration Service ) is the main body involved in conciliation and arbitration. Formal / official arbitration: The CAC (Central Arbitration Committee) originally had a wide range of powers. Most of its functions, however were abolished in the 1980s. Now its role is limited to voluntary arbitration that is not binding but usually accepted. Industrial Tribunals: Tribunals normally consist of 3 members: a lawyer as chairperson, a representative of employers and a representative of employees. Industrial tribunals have jurisdiction only in so far as it is specifically given to them by Parliament.

Regulations on individual redundancy:

The statutory minimum period of notice is 1 to 12 weeks depending on the duration of employment. If the length of continuous employment is less than two years, the period of notice is one week. For each additional year of service, it increases by one week up to a maximum of 12 weeks.

Industrial Relations in USA

 Employee involvement There is a ban on non-trade-union representation in the workplace to prohibit companies from setting up company dominated labour organisations and thus excluding trade unions from their companies. Employers' associations Since collective bargaining typically occurs on a company-bycompany basis (or even on an establishment-by-establishment basis within an individual company), there is no nationwide group representing employers in collective bargaining. Trade unions There is a nation-wide organization of unions --- the American Federation of Labor - Congress of Industrial Organizations (AFL-CIO) --- as well as state-level versions of the AFL-CIO that represent unions in government affairs protection

 Minimum Wages: Federal law sets a minimum wage covering most employment. Some states have higher minimum wages, and the number of states with higher minimum wages generally increases if the federal minimum wage is left unchanged for three or more years
Level of wage negotiations Decentralized system, with negotiations typically occurring between the "local" of a national union and an individual employer. Craft union "locals" may negotiate with representatives of a local employer organization .

 Mediation, Conciliation and Arbitration - voluntary Federal Mediation and Conciliation Service (a federal government agency created in 1947) and several state-level mediation and conciliation services provide contract negotiation mediation, preventive mediation, arbitration services, and alternative dispute resolution on a voluntary basis to union and employer negotiators and to union and management parties of a labor dispute.
Formal / official arbitration Mandatory arbitration is rarely imposed.

General description / Legal framework

The federal government provides a statutory framework for contracts between employers and employees.

The federal government also sets the statutory minimum wage, although state governments are free to establish a higher minimum wage. Under federal labor law, non-management workers who are employed more than 40 hours per week must be paid at an overtime rate of at least 150 % of their standard pay for hours in excess of 40 hours. There are no federal and few state laws providing protection against worker dismissal

Trade Union Density

100 91.1

% of wage and salary earners being union members

90 80 70 60 50 40 30 20 10 0 GER JPN SWE Countries UK USA 28.9 24 14.2 32.9

Bibliography
Mamoria and Mamoria, Dynamics of Industrial Relations, 14th revised edition, 2002, Himalya Publishing House, Mumbai. Bhatia, S.K., International Industrial Relations, 2nd edition, Deep and Deep Publications, New Delhi. Ahuja, K.K., Industrial Relations, theory and practice, 1st edition,1988,Kalayani Publishers ,New Delhi. Gower, European Labour Relations Gower publishing, England, Volume I,2001

Gower, European Labour Relations Gower publishing, England, Volume II,2001

Niland R. John, Lansbury D. Russell, The future of Industrial Relations-Global change and challenges, Sage publications,1994

On Line Sources
Carley Mark, Industrial relations in the EU, Japan and USA, 2003-4, European industrial relations observatory on-line, published on 10-03-2005 (www.eiro.org) International Reform Monitor's data-base on Industrial Relations (www.reformmonitor.com)

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