Lorenzo
Bordogna*
and Gian Primo Cella**
Admission, exclusion, correction : the changing role of the state in industrial relations
Summary We suggest in this paper that all the models more
of industrial relations, and not just the ’statist’ ones, have been characterised throughout their history by complex and
sometimes troublesome relationships with the state. These models have always been conditioned, and in a certain sense shaped, by the latter’s more or less direct intervention at the moment of their formation and as they have expanded or declined.
The difficulties that have often arisen in the relationships between state and industrial relations are to a large extent due to the fact that political regulation and regulation through industrial relations only partially overlap in their goals and contents. More frequently they compete with each other and have methods and logics that tend to diverge. Whereas decisions are taken by majority principle in the political sphere, in industrial relations they can only be taken unamimously — and especially so in collective bargaining, where approval by both parties, however minimal, is indispensable for reaching agreement and neither side can ever surrender entirely.
specifically, it is suggested that state intervention as a whole may assume the form of — or be interpreted as — four different types of tasks or activities, with reference to the industrial relations actors as well as to goals and issues: tasks of admission or promotion, exclusion, correction and definition. And it is also pointed out that the various models of industrial relations (pluralist, neo-liberal, neo-corporatist, statist) are mainly differentiated by the prevalence of one or other combination of them, as it is shown by the brief review of the different periods/models of industrial relations in the post World War II era, with special reference to European and North More
American countries.
*
**
14
Gian Primo Cella: full professor of Economic Sociology and head of Department of Sociology, University of Milan e-mail:
[email protected] Lorenzo Bordogna: associate professor of Sociology of Organisation, Department of Social Studies, University of Brescia e-mail:
[email protected]
Résumé
article, les auteurs affirment que tous les modèles de relations de travail, et pas uniquement les plus «étatistes», ont été caractérisés tout au long de leur his-
Dans non
cet
toire par des relations complexes et parfois difficiles avec l’Etat. Ces modèles ont toujours été conditionnés, et dans un certain sens sculptés, par l’intervention plus ou moins directe de ce dernier au moment de leur formation et lorsqu’ils se sont développés ou perdu de leur importance. Les difficultés qui sont souvent apparues dans les relations entre l’Etat et les relations de travail sont jusqu’à un certain point dues au fait que la régulation politique et la régulation par le biais des relations de travail se chevauchent uniquement partiellement au niveau de leurs objectifs et de leur contenu. Plus fréquemment, elles sont en concurrence l’une avec l’autre et ont des méthodes et des logiques qui tendent à présenter des différences. Alors que les décisions sont prises par le principe de la majorité au niveau politique, sur le plan des relations de travail, elles peuvent seulement être prises à l’unanimité , tout particulièrement lors des négociations collectives, où l’approbation par les deux parties - si minime soit-elle - est indispensable pour aboutir à un accord et où aucune partie ne peut jamais renoncer com-
plètement. De manière plus spécifique, il est suggéré que l’intervention de l’Etat dans son ensemble peut prendre la forme de - ou être assimilé à - quatre types différents de tâches ou d’activités, avec une référence aux protagonistes des relations de travail de même qu’aux objectifs et thèmes : tâches d’admission ou de promotion, d’exclusion, de correction et de définition. Il est également souligné que les différents modèles de relations de travail (pluraliste, néo-libéral, néo-corporatiste, étatiste) se différencient principalement par la prédominance de l’une ou l’autre combinaison de ceux-ci, tel que le montre le bref aperçu des différents modèles /périodes des relations de travail de la période suivant la Seconde Guerre mondiale, en se penchant tout particulièrement sur les pays d’Europe et d’Amérique du Nord.
Zusammenfassung Alle Formen von industriellen Beziehungen, also nicht nur die "dirigistischen", zeichneten sich im Verlauf ihrer Geschichte durch komplexe und mitunter konfliktreiche Beziehungen mit dem Staat aus. Dabei wurden sie beeinflusst und in gewisser Weise auch geformt durch die mehr oder weniger direkten Interventionen der Staatsmacht zum Zeitpunkt ihrer Gründung oder im Verlauf ihrer späteren Entwicklung, bzw. in Zeiten ihres Aufstiegs oder Niedergangs.
15
wichtiger Grund für die damit verbundenen Schwierigkeiten zwischen Staatsmacht und den Systemen industrieller Beziehungen war, dass sich politischstaatliche Regulierung und die Regulierung im Rahmen industrieller Beziehungen nur teilweise in ihren Zielen und Inhalten miteinander decken. Häufiger waren sie in einem Wettstreit miteinander, wobei Methoden und die dahinterstehende Logik divergierten. Während in der Politik Entscheidungen auf Mehrheitsbeschlüssen basieren, können sie im Rahmen von industriellen Beziehungen, und insbesondere bei Tarifverhandlungen, nur einstimmig beschlossen werden. Dort ist wenigstens eine minimale Annahme von Entscheidungen auf beiden Seiten unverzichtbar, um zu einer Vereinbarung zu kommen, keine Seite kann sich vollständig und ohne ein Zugeständnis der anderen Seite geschlagen geben.
Ein
Was die verschiedenen Formen staatlicher Intervention angeht, so unterscheiden die Autoren vier verschiedene Formen, die sich auf die Akteure in den industriellen Beziehungen und die Ziele und Themen beziehen: Anerkennung oder Förderung, Ausgrenzung, Zurechtweisung und Definitionsmacht. Die verschiedenen Modelle
industrieller Beziehungen (pluralistisch, neo-liberal, neokorporatistisch, dirigistisch) unterscheiden sich untereinander, so die Autoren, durch das Vorherrschen der einen oder anderen Kombination, wie der kurze Überblick über die Systeme industrieller Beziehungen nach dem 2. Weltkrieg zeigt. Hauptaugenmerk gilt dabei Europa und Nordamerika. 1. Role of the state and industrial relations:
continuity
and
change
In the history of industrial societies, the relationships between the state and industrial relations have not always been easy. Certainly the most dramatic or tense episodes have occurred when industrial relations have been broken down or indeed terminated under authoritarian (or totalitarian) political regimes of right or left, and in situations when regimes oriented towards market individualism have provoked or challenged them. However, these relationships have not been problematic in these periods alone: difficulties arise in normal circumstances as well, because confronting one another, and sometimes in outright conflict, are two forms of regulation which only partly overlap in their goals and contents, and indeed often compete, if not stand as alternatives, in their methods and logics. The goals of economic and also political ’order’ are to some extent shared by state (or political) regulation and the regulation through industrial relations. And so too are certain contents, for example those concerning the uniform protection of weaker components of the labour force, or limitation of the most distorting effects of competition on pay levels and working conditions.
But their methods and logics tend to diverge. In the political sphere - which supervises state intervention - decisions are taken by majority, albeit in order to fulfil a 16
purported general interest. In industrial relations, as in all pluralist relations, decisions are taken unanimously. This happens in collective bargaining, where the interests of neither party can ever entirely surrender, and the agreement is reached only with the approval (even if minimal) of both parties. And in this form of regulation, method tends to prevail over contents, and over goals. What matters most is the possibility to negotiate, and re-negotiate. It is on this basis, for example, that over the last fifteen to twenty years it has been possible in numerous European and North American countries to reach agreements which have effectively worsened the pay and working conditions of employees (so-called ’concession bargaining’). The trade unions have subscribed to these agreements because they confirm the bargaining method, as well as minimum conditions of equity and the unions’ survival as collective actors (cf. Crouch 1997). But the unions would have been loath to accept, indeed would have fiercely opposed, similar measures if they had been introduced by the state. It is this divergence of method that gives rise to some of the most pronounced difficulties in the relationship between state and the industrial relations system. Even democratic political regimes sometimes express dissatisfaction or annoyance with the obstacles raised by industrial relations - precisely because of the ability of the social partners to entrench themselves behind the principle of collective autonomy - against the achievement of political objectives. On other occasions, it has been parliamentary assemblies that have reacted against collaborative (or ’corporatist’) excesses in trilateral agreements between governments and social partners.
particular institutional circumstances (those of more ’organised’ pluralism) the state explicitly exploits this potential of the industrial relations method, relying on the involvement of the large-scale, encompassing collective actors (employers’ associations and trade unions) to achieve political ends (for example, anti-inflationary targets or poliIn
cies of fiscal stabilisation). In these cases, the collective actors and the method of collective negotiations change from being potential causes of ’disorder’ into resources for political order (cf. Schmitter and Streeck 1985). It is these cases that display the most cooperative arrangements between the state and the industrial relations system, those which many observers (also in this issue of TRANSFER) define as ’neo-corporatist’. is of extreme importance for industrial relations in any circunstances : when the intention is to restrict or obstruct them, when it is to correct or adjust them, and finally when the aim is to promote them. This will become clearer if we examine the components and the most typical (and sometimes concealed) meanings of industrial relations.
However, action by the
state
17
Industrial relations can be viewed as an autonomous form of regulation of potentially conflicting interests which arises from a complex combination of representation, efficiency and equity. Accordingly, this regulatory method rests on principles and forms of interest representation (of especial importance for labour, but not irrelevant to companies either) which should generate negotiated solutions, temporary and sometimes unstable, but nevertheless characterised by a minimum of efficiency (in the sense that conflict after regulation should be less than what it was before) and equity. As Adams (1993) points out - following one of the fathers of industrial relations, Jack Barbash - the relationship between efficiency and equity is of especial importance, given that various issues central to the practice of industrial relations - from minimum wages to the extension and erga omnes validity of collective agreements - can be related to it. It is this
complex nature of industrial relations that makes them socially more acceptable than pure and simple regulation through the market. The latter may sometimes be more efficient, but it cannot provide any guarantee of equity or interests representation. And an absence of representation considerably reduces opportunities for the mediation or settlement of disputes in order to avert their damaging economic or social consequences. Yet it is this multiplicity of elements, as well as the autonomy intrinsic to industrial relations, which requires - or provokes - varying degrees of direct or explicit intervention by the state; intervention which may be ’favourable’ to industrial relations, but also alternative or even hostile to them. It is the state that keeps industrial conflict within non-disruptive limits, especially in sectors (like public services) of greater public interest, by means of legislative intervention, mandatory conciliation, or judicial action, but also by resorting to direct repression (as in authoritarian regimes). It is the state, operating through government intervention, which adjusts or redefines the objectives pursued by the parties should they impinge on the economic or political order. It is the state that provides (or withdraws) some of the prerogatives necessary for the survival of representation or for its expansion, in order to keep irresistible tendencies towards free-riding under control. It is indirect intervention by the state that makes bargaining relations more efficient, fostering the creation and working of institutions for the mediation or conciliation of disputes. Finally, it is legislative intervention that increases the equity of regulation by extending the validity of agreements, or by providing minimal protection for weaker or less represented segments of the labour force.
All industrial relations models, therefore, and not just the more ’statist’ ones, are shaped more or less directly by state intervention - when they are created and as they expand or decline. From this point of view, there are no entirely ’voluntarist’ models 18
of industrial relations, either in Europe or in North America. Intervention by the state, as a whole, has performed tasks of admission (or promotion) exclusion, correction, and definition with respect to regulation through industrial relations, and these are actions with obvious consequences for the logic and practice of industrial relations. It is the varying mix of these tasks - within the ambit of relatively stable institutional paths (North 1990) - that distinguishes among national styles of intervention in different historical periods. Tasks of admission (or promotion) are performed by the state when it reduces, or eliminates, barriers against unionisation or collective bargaining in particular industries or sectors, and when it promotes the role and growth of trade unions. An example of the former type of admission is President Kennedy’s Executive Order 10988 of 1962, which, although to a limited extent, opened the federal administration to a system of joint regulation of the employment relationship similar to the collective baragaining system operating in the private sector, and for which a precedent was the Whitley System introduced in Britain after the First World War. Well-known examples of the latter type are the 1935 Wagner Act of the Roosevelt presidency and the Italian ’Workers’ Statute’ of 1970. Further kinds of admission, albeit ones with ambivalent effects on trade-union representation, are measures which extend the validity (erga omnes) of collective agreements (as in France since 1950) or the more recent Europeanlevel agreements or directives. It was these types of admission which characterised, often in indirect form, the so-called ’Keynesian era’ (see section 2).
prohibiting of unionisation or participation in collective bargaining by particular categories of employees (like the German Civil Servants, Beamte) and the restricting of strike action (be it a right or a freedom) and lock-outs. Impediments may be placed on industrial action by fixing particularly stringent conditions for its proclamation (an example is the British Trade Union Act of 1984), by legally specifying sectors in need of particular protection (as in the 1990 Italian law on strikes in essential public services) and the imposition by the judicial system of particular criteria of fairness on industrial action (like the German principles of proportionality and Sozialaddquanz). Exclusion tasks
concern
the
Correction involves the prohibiting (through legal intervention or trilateral ageements) of particular contractual provisions or mechanisms (like automatic wage indexation in numerous European countries: recently in Holland and Italy, for example) and the compulsory compliance of collective agreements with legally imposed directives (on working hours, for example, at both the national and European level). Corrective action also includes the mediation of disputes by public agencies, up to forms of more or less mandatory arbitration (as recently in Scandinavia: see Stokke in this issue of TRANSFER). 19
tasks concern cases in which the state - especially through government action - more or less exhaustively defines the goals to be pursued by the social partners. Such definition, at least in liberal-democratic systems, usually takes place through collaborative-cooperative practices (ranging from incomes policies to concertation agreements). Through this definition of goals (of economic growth or financial stabilisation) the preferences and choices of collective actors are placed in a relationship of &dquo;strategic interdependence&dquo; (Streeck and Schmitter 1985).
Definition
Obviously, the diverse models of industrial relations (Cella and Treu 1998) are not compatible with every type of activity by the state. Pure pluralist models, for example, are usually accompanied by corrective action, and by relationships between the and the industrial relations system oriented to forms of tolerance and laissezand they are also attended to a certain extent by admission and promotion. Models based on organised pluralism, and neo-corporatist ones even more so (see section 2) mainly involve activities of admission and promotion geared to cooperation and collaboration, but also - especially in the neo-corporatist models of recent years - to correction and the definition of goals. The neo-liberal challenge against industrial relations (see section 3) is mainly exclusive in character, as well as being partly corrective, in order to seek to repress or restrict the method itself of industrial relations. state
faire,
We now turn to examination of the relationships between the state and industrial relations in the course of the last half century. Analysis of these trends will shed valuable light on the specific situation in the last years of the 1990s.
2. Promotional and corrective intervention in ratist models
pluralist and neo-corpo-
Analysing the state’s role in industrial relations in terms of historical phases, without any further qualifications, inevitably gives rise to distortions. A large part of the literature has reacted to the convergence theories that flourished in the late 1950s and
1960s (see, e.g., Kerr et al. 1960) by highlighting the differences among the models of economic and social regulation that have characterised post-war development in the advanced market democracies - and also the role played by the state in those models (Berger 1981; Goldthorpe 1984; Bordogna and Provasi 1984). Commentators have dated the causes of these differences far back in time - to the final decades of the last century, if not even further in the past - and regard them as already consolidated by the end of the First World War (Crouch 1993). However, alongside national differences, which will be discussed below, it is also possible to discern a num-
early
20
important shared features which identify the various historical phases and distinguish among them, thereby enabling one to grasp the main changes that have
ber of
occurred in state intervention in industrial relations. In the systems of organised pluralism and in the neo-corporatist ones, that arose in certain countries (like those of Northern Europe) during the 1930s but which spread mainly in the first decades after the Second World War (the so-called Trente Glorieuses), the role of the state in industrial relations can be interpreted - to use the terminology introduced in the first section - as promotional intervention (in which admission activities predominated) combined with correction and definition.
Promotional intervention was manifest first, and perhaps also prevalently, in ’indirect’ form. It was closely connected with the two fundamental aspects of the Keynesian management of the economy distinctive of many Western advanced democracies during this period (Goldthorpe 1983; Bordogna and Provasi 1984). These aspects were, firstly, the &dquo;end of laissez-faire&dquo; and the assertion of government responsibility for regulating the overall levels of economic activity in order to achieve growth and full employment; and secondly, a public intervention in the economy which, although substantial in certain countries and in certain areas of activity (nationalisations, welfare) so much as to justify Shonfield’s doubts as to whether it was still possible to talk of capitalism without qualifications (Shonfield 1965) - was not such as to be incompatible in principle with mechanisms for the private allocation of resources and the prerogatives of individual economic operators, operators on whose decisions utlimately depended, in Keynes’ words (1936-64: 379) &dquo;what in particular is produced, in what proportions the factors of production will be combined to produce it, and how the value of the final product will be distributed between them&dquo;. This was therefore intervention which, to use Fred Hirsch’s (1976: 126) apt expression, could guarantee &dquo;full employment and John Stuart Mill too&dquo;: full employment ensured by ’central control’ of the economy, but without abolishing the conditions for freedom of enterprise, and indeed with much use made of the market itself as an instrument of control (Goldthorpe 1983). Whence derived the state’s role of ’indirect promotion’ (and admission) in industrial relations. It was promotion in that the overall purpose of government economic policies was such as to create a context favourable to the development of industrial relations in at least two of their main components: representation and collective bargaining. The former benefited not only from full employment policies but also from widespread welfare measures: two factors which attenuated the vulnerability of workers to the ’discipline’ of the market. As for the latter, the enlargement of the size of the ’cake’ as a result of the state’s economic intervention transformed the lacerating distributive strife of the inter-war period into the no longer zero-sum logic of bargained participation by the 21
classes in the benefits of economic growth and mass market. It was indirect because, at least in its original Keynesian design (Goldthorpe 1983; Skidelsky 1979) it did not involve direct administrative intervention in the allocation of resources and in the distribution of income, since these were still determined by the free play of market forces. And this was the case despite the considerable differences among countries stemming from more or less constraining and prolonged commitment of their governments to full employment, from the political and ideological attitudes of these governments, or from the power relations prevalent in the labour market or the political-electoral arena. One notes, moreover, that these promotional effects made themselves felt, perhaps with some delay, also in those countries whose governments and employers’ associations pursued policies on other issues which excluded organised labour from the political and industrial relations arenas - examples being Italy in the 1950s, and perhaps also France and Germany in the same period.
working
However, the promotional role of
state intervention in organised pluralism sysin tems, and especially neo-corporatist ones, was not solely the indirect outcome of Keynesian economic policies, however important they may have been. In several cases, state intervention took the form of direct support - legislative or political - for the actors and method of industrial relations, and especially for collective bargaining. An example is provided by the already-mentioned Wagner Act in the USA, which, although it was adjusted and attenuated after the war, brought fundamental change to American industrial relations; or one may cite the laws on collective agreements and on co-determination (1951-52, 1972 and 1976) in the German Federal Republic, the Workers’ Statute in Italy (1970) or again the Swedish legislation of the mid-1970s which allowed collective bargaining on managerial prerogatives hitherto excluded by the basic agreement of 1938. Or finally (although the list could continue) the introduction of mechanisms or rules which extend the validity of collective agreements to areas in which collective bargaining is absent and union density is low - as in France or in Spain and Portugal after the advent of democracy (Traxler 1994). However it should be pointed out that this latter type of intervention, since it increases the coverage of collective bargaining by law or administrative means, might indirectly discourage unionisation, and therefore could have somewhat ambivalent effects on industrial relations (see section 1 ).’
1
to some authors, similar effects can be detected in the United States during the 1960s and 1970s, following legislation which extended individual employment rights. Fear of these consequences may account for the resistance raised by the Danish unions against the implementation by law of EU directives (see the article by Lind and Knudsen in this
According
issue). 22
One notes, moreover, that in systems of organised pluralism and neo-corporatism it is the bargaining structure itself - with the pivotal role almost invariably played in it by industry-wide bargaining - which is often conditioned by the plurality of state interventions in industrial relations. The clearest example of this is probably provided by the German case, where sectoral bargaining is sustained, firstly, by the Collective Agreements Act and its subsequent interpretations by the Federal Labour Court, which attribute the capacity to conclude collective agreements only to unions organised above the company level, and secondly by the rules on employee representation, which forbid company-level bargaining on wages by works councils (Weiss 1992; Traxler 1994). Another example, perhaps a less evident one, is provided by Italy, where intervention by the courts (ex art. 36 of the Constitution) to extend minimum contractual wages to the employees of companies not affiliated to the employers’ organisations refer to the minimum wage rates fixed by industry-wide collective agreements, thereby indirectly recognising the driving role of this bargaining level. Also corrective-selective intervention by the state in industrial relations in this period was closely connected with Keynesian-type macroeconomic policies to manage aggregate demand. It derived from the need to curb the potential inflationary consequences of these policies due to their promotional effects on industrial relations, as discussed above. The importance of this type of intervention - with correction and definition tasks by the state - is particularly evident in neo-corporatist systems, since these, unlike strictly pluralist ones, emphasise the political rather than market component of the Keynesian compromise (Lindblom 1977; Bordogna and Provasi 1984). In this situation where the political commitment to growth and full employment is more forceful and enduring - the problem of curbing workers’ demands and militancy (principally, but not solely, as regards non-inflationary wage dynamics) may be addressed through definition by the state of the goals to be pursued (or pursuable) by trade unions. This definition might also involve the selection of actors (and not only on the workers’ side) and it was performed through a variety of collaborative-cooperative practices (incomes policies, concertation agreements) based on an institutional infrastructure marked by varying degrees of development and consolidation. In some countries these were occasional and mainly ad hoc agreements; in others - Norway, Denmark, and to some extent Sweden - they involved national institutions which allowed or compelled the social partners to take part in the decision-making process of economic policy (mainly on wage issues, but also on various other aspects of the labour market) up to very stable arrangements, like the Austrian Paritatische Kommission, which sustained a form of &dquo;generalised political exchange&dquo; (Crouch 1993). In yet other cases, the state definition of goals took the form of direct control by the government or by law: for example again as regards wage dynamics - in Holland or Belgium during the 1950s or ’60s, and again in Belgium during the period 1976-86, when wage-freeze measures were occa-
23
sionally enforced. Besides the selecting of actors and the defining - or participation in defining - the goals pursued by the parties, the corrective-selective role of the state in industrial relations may also be significantly sustained by its more or less mandatory intervention to conciliate disputes, up to forms of arbitration. This power enables the state to exercise a &dquo;credible threat&dquo; over the social partners’ actions, thereby inducing them to behave in ways that they would otherwise not consider; and it is a resource that, as we shall see, acquired great importance in some Nordic countries during the 1990s, when other aspects of neo-corporatist systems were showing increasing signs of weakness
(Stokke in this issue; Elvander 1997; Stokke et al. 1997; Ibsen 1997).
In general it was the entire set of correction and definition activities by the state in industrial relations that gained in importance during the 1970s, especially in the countries that had adopted the neo-corporatist model - or in other words, when the features of order and growth initially secured by the Keynesian compromise began to give way, for endogenous and external reasons, to systemic imbalances and instability. On the other hand, the state’s promotional role was scaled down almost everywhere, and in certain countries, especially the United Kingdom, state intervention shifted decisively, and in a certain sense paradoxically, towards deregulation - as we shall see in the next section.
3. Exclusion and correction: the neo-liberal assault
on
industrial relations
importance of state intervention for industrial relations has been demonstrated, paradoxically, by the events surrounding the neo-liberal offensive mounted during the 1980s - mainly in the Anglo-Saxon countries, but also to some extent in other European countries and in several economic and political areas of Latin America. The paradox was that deregulative goals were pursued by means of forceful legislative intervention of a restrictive and limiting type. Something similar would also occur in the privatisation processes that, in the same period, involved the entire set of state-managed economic actvities in almost all the countries of the world (Wright 1995). The paradoxes of intervention designed to reduce the public sphere precisely by means of pressing political initiative were not new to liberal policy, which was not greatly changed by addition of the prefix ’neo’. This had already been pointed out by Karl Polanyi in The Great Transformation (1944) when he stressed that the free market was constructed through political interventions very distant from the principles of laissez-faire. The
somewhat
The difficulties of the pluralist models of industrial relations (especially, but not only, the pure, traditional ones) were at the origin of the neo-liberal offensive. The effi24
of regulation through industrial relations was greatly reduced now that the economic conditions that had permitted the triumphs of the Keynesian era were disappearing. The newly-elected governments in the United States and the United Kingdom launched an offensive against industrial relations - an offensive which, in many respects, looked less to the future than to the past of liberal individualism. The neo-liberal reaction was directed with particular vehemence (see Pierson 1994) not only at the ’disorder’ created by pluralist industrial relations, but also against more participative and collaborative arrangements.
ciency
The strengthening of central representation by the large interest groups (the unions but not only these) and increased state intervention were accused of having given rigidity to the system, rather than stabilising it, of reducing incentives for innovation and productivity, of encouraging waste and inefficiency by guaranteeing excessive equality in the distribution of income and job opportunities. The effects - argued neo-liberal thought and practice - had been the ’institutional sclerosis’ observable in the tendency of large organisations to reduce the speed of change and innovation, as well as to block the necessary process of conversion and restructuring of production, in order to protect their members’ privileges. And they were also evident in the slowness of decision-making within these organisations and in the excessive social demands made by them (see Goldthorpe 1984). In this situation, the industrial relations system was regarded as &dquo;the villain of the
piece&dquo;. The adjustments introduced by the neo-liberal assault worked in the reverse direction to the institutional involvement of the large interest organisations within a collaborative-participatory system. They sought to reduce the power of the collective organisations that had grown up in the previous climate of pluralism, pursuing strategies to curb or exclude these organisations, and to deregulate the employment relationship by extending the range of market regulation without institutional mediation. The policies adopted by neo-liberalism (exclusion and corrective activities in a deregulatory direction) differed in intensity among countries, and employed a variety of instruments: from direct initiative by employers in the market arena to (legislative, fiscal, monetary) action by the state against both parties in order to encourage behaviour more consistent with the ’free’ working of the market.
The most clear-cut varieties of neo-liberalism - in the United States and especially in the United Kingdom - deliberately set out to restrict the influence of the trade unions and the industrial relations institutions that had flourished in the decades of pluralism. To use the terminology introduced earlier (see section 1) exclusion 25
and correction predominated - taking a variety of forms: curtailment of tradeunion prerogatives, a shift from ’promotional’ policies to restrictive or abstentionist ones, with the indirect extension of the employers’ powers in administering the employment relationship; encouragement of the individualisation of industrial relations (by supporting referenda, or reducing forms of union security) ; the marginalisation of tripartite institutions at various levels; the decentralisation of collective bargaining, while also limiting its scope to traditional economic matters.
parallel, neo-liberal policies sought to abolish or attenuate the protections traditionally provided by labour law, or else they endeavoured to restrict its coverage by broadening the sectors of the labour market to which it did not apply: small production units, atypical or precarious employment relationships. In
The
array of legal measures introduced by the British Conservative the 1980 Employment Act, the already-mentioned 1984 Trade governments Union Act, and the 1993 Trade Union Reform and Employment Rights Act - are emblematic of the tasks of exclusion and correction assumed by the state. As one of the most recent and valid reconstructions of British industrial relations has pointed out: &dquo;The key provisions of these complex and interlocking measures can be seen as having a number of complementary objectives: the legal restriction of industrial action; the eradication of the closed shop; the regulation of internal union government; the dismantling of statutory support for collective bargaining; and the curtailment of individual employment rights&dquo; (Edwards et al. 1998: 13).
impressive
This demonstrates the complex nature of the method of regulation of industrial relations: a method which to be downsized requires the taking of multiple mea-
against its components: the expression and recognition of industrial conflict, representation, efficiency, and equity. Also the latter, and apparently covert, element needs appropriate action. It is no coincidence that the neo-liberal governments gave a markedly ethical characterisation to their initiatives, although this was an ethic that harked back to the period of possessive individualism discussed sures
in such
Macpherson (1962). When measures were restricted correction, partial in character, as in other European countries, the industrial relations system was affected in its logic and workings to only a minor extent. There ensued the period of flexibility in the regulation of employment relationships, but without the upheavals provoked by the combinato
masterly or
fashion by when they
were more
tion of exclusion and correction. Thus revived were a number of collaborativeparticipative potentialities which had seemed irretrievably lost (as well as section 4, see also the article by Schmitter and Grote in this issue). 26
4. The
rediscovery
of the
potentialities
of industrial relations
It may come as a surprise to find that the neo-liberal deregulatory project did not give rise to the outcome that one might reasonably have expected, and which was feared by many protagonists. It is not that in Great Britain the onslaught by the state against most of the conditions that made the very existence of industrial relations possible with exclusion and limitation measures in the specific area of trade-union law and more generally in economic and social policy - did not have substantial effects. But, although deregulatory initiatives were targeted on some or other aspect of industrial relations almost everywhere, the almost unanimous opinion in the literature is that the UK, with its systematic assault on all the components (representation, collective bargaining, conflict and industrial action) of the industrial relations system, was the exception rather than the rule in Europe. It was some sort of ’champion’ of industrial relations probably destined to remain such, and from which other countries differed, not because they were laggardly in setting off along the same path, but because they were oriented in a different direction. Testifying to this is the strong revival of concertation practices and social pacts in a large number of European countries at the end of the 1980s, as well as during the current decade (for a broad but not exhaustive survey see Fajertag and Pochet 1997; see also Schmitter and Grote in this issue, and Femer and Hyman 1998). One should not conclude, however, that this is a matter of simple continuity with the models of organised pluralism and neo-corporatism considered above. Compared with these experiences, intervention by the state in industrial relations displays important new features, ones mainly to do with the economic challenges now facing the advanced Western democracies, and especially those of Europe. These are challenges that combine the traditional aspects of the macroeconomic management of demand - but now geared to ensuring price stability and the soundness of public finances rather than growth and full employment - with the need to ensure the virtuous supply-side microeconomic behaviour required by the new conditions of international competition and by the impossibility of resorting (following the advent of monetary union) to devaluation against rival economies in order to restore competitiveness lost on the labour market. Economic globalisation and European monetary union have similar and cumulative effects as regards the problems being discussed here, and they mark the weakening of that Keynesian context which since the 1940s had fostered the development of the industrial relations system and strengthened workers’ organisations: a context, by way of simplification, made up of microeconomic rigidity and macroeconomic flexibility which enabled ’unvirtuous’ behaviour in the labour market and industrial relations to be handled by means of the politically non-divisive instruments of currency devaluation and budget deficits. That context 27
has now substantially changed, especially in the EMU countries, where devaluation has been abolished and budget flexibility radically restricted by the criteria of financial discipline defined in the Maastricht Treaty and further strengthened by the Pact of Stability and Growth signed in Amsterdam in the summer of 1997. However, it would be an error to consider these criteria as the primary source of difficulties for industrial relations in Europe, given that they are instead instruments to combat opportunistic behaviour and problems of moral hazard, which would in any case be strongly penalised by the ’markets’ and whose costs would be off-loaded onto the virtuous partners. Prior to agreements on EMU, it was the liberalisation of the financial markets that imposed the soundness of public budget policies, while the need to attract and hold investments, as well as to withstand competition, requires rigorous behaviour at the microeconomic level, beginning with labour-market rules and behaviour (but not only these). Hence derive the new features of the state’s role in industrial relations. Firstly, its promotional role has weakened, both in its indirect but crucial form tied to economic growth and full employment policies, and in that more directly tied to what in the introductory section we called admission activities. Predominant instead are the activities of correction, definition and selection - of actors and goals - intended to ensure that the institutions and outcomes of the national labour market are consistent with the new rules of the game, mainly but not only as regards wage moderation through various forms of incomes policies. Even when measures are targeted on representation, or seek to extend collective bargaining to areas hitherto excluded - for example in the public sector of many European countries in the 1990s - the promotional intent has remained well in the background, or indeed has been entirely absent. Predominant instead have been the selection/simplification of actors and the correction/adjustment of goals and behaviour (in order, for example, to link public sector outcomes to those of the private sector exposed to market constraints; see Bach et al.,
forthcoming). The same applies to the flexibilisation of the labour market and of industrial relations. Whereas in the United Kingdom this goal has been pursued mainly through the massive use of exclusion measures by the state, in many other European countries the state has sought to correct excessively rigid protections - which are hard to sustain in the new situation - by means of agreement and concertation between the social partners, rather than by means of exclusion, and often flanking them with tax concessions and relief on social contributions. This has happened, for example, in Holland since the early 1980s, and especially in the 1990s, where a policy of wage restraint combined with reduced working hours, and strong incentives for part-time work (almost to the point of creating what Visser has called a situation of &dquo;part-time full employ28
ment&dquo;) have been pursued by reducing taxes and social charges (Visser 1998). But examples can be found in other countries as well: Spain, for instance, Denmark, or where in recent years flexibilisation measures have been introduced, and regulated, by means of state-supported concertation between the social partners, or even by means of a mix of legislation and social concertation. Cases in which this latter technique has been utilised are both the introduction of atypical employment contracts (e.g. temporary and part-time work, fixed-term contracts)’ and the possibility for employers to obtain at local level more flexible working conditions and lower labour costs than the standards fixed at national level (through the so-called &dquo;contratti d’area&dquo; and &dquo;patti territoriali&dquo;). In Germany and Holland, forms of flexibility in company-level work rules - especially with regard to working hours - have been introduced directly by the social partners mainly through the use of opening clauses in industry agreements (see the Dutch and German cases in Femer and Hyman 1998). even
Italy,
at the same time
short, unlike the British case, during the 1990s many countries have seen state intervention - mainly taking the form of correction and selection activities - in industrial relations designed to encourage collaboration and participation, but nevertheless by means of measures to a certain extent innovative with respect to those of the 1960s and 1970s. The aim of these measures has been not only the traditional one of curbing wage dynamics by means of incomes policy, but also the introduction via concertation of various forms of flexibility in the labour market and the employment relationship that in the United Kingdom have been largely pursued through exclusion. In
To
conclude, this process has perhaps unexpectedly enhanced the value of the industrial relations method and of social concertation - often promoted by state and government intervention - as an effective instrument of economic and social regulation, an instrument which has also received an authoritative confirmation of its value at the European Union level by the full inclusion of the Maastricht Social Protocol in the Treaty of Amsterdam, and therefore by the recognition of the partial primacy of the role of social dialogue on certain matters over (or within) the legislative process.
2
A provision currently being examined by the Italian parliament - the so-called "Statuto dei Lavori"- recognizes various types of atypical employment contract, while at the same time providing some protection for them, although this protection is obviously less rigid than that granted to employees with a standard, permanent employment contract. In the terminology used here, this is intervention consisting of both admission and correction. 29
5.
Summary and concluding
remarks
We conclude this brief analysis by reiterating that all the models of industrial relations, and not just the more ’statist’ ones, have been characterised throughout their history by complex and sometimes difficult relationships with the state. These models have always been conditioned, and in a certain sense shaped, by the latter’s more or less direct intervention at the moment of their formation and as they have expanded or declined.
The difficulties that have often arisen in these relationships are to a large extent due to the fact that political regulation and regulation through industrial relations only partially overlap in their goals and contents. More frequently they compete with each other and have methods and logics that tend to diverge. Whereas decisions are taken by majority principle in the political sphere, in industrial relations they can only be taken unamimously - and especially in collective bargaining, where approval by both parties, however minimal, is indispensable for reaching agreement and neither side can ever surrender entirely. This difference of method is at the basis of some of the greatest difficulties in the relationship between the state and the industrial relations system. Even in democratic regimes, the pursuit of specific political goals may conflict with the dynamics of industrial relations, and precisely because of the ability of the social partners to entrench themselves behind the bulwark of collective autonomy. On other occasions, parliamentary assemblies may react against tripartite agreements be-. tween the government and the social partners when the excessive ’corporatism’ of these agreements is deemed to undermine the sovereignty of legislative power and of democratically elected political representatives. On yet other occasions, especially in institutional contexts of more ’organised’ pluralism, the industrial relations method and the involvement of the large-scale collective actors are important instruments for the pursuit of political ends (for example, curbing inflation or financial stabilisation) and they change from being potential causes of ’disorder’ into valuable resources for political order and for effective government action. We accordingly maintain that action by the state is always of extreme importance for the industrial relations system, when it seeks to curtail or obstruct it, when it seeks to correct it, as well as when the intention is to promote industrial relations.
specifically, we suggested in the introductory section that state intervention whole may assume the form of - or be interpreted as - four different types of task or activity, with reference to the industrial relations actors as well as to goals and More as a
30
issues: tasks of admission or promotion, exclusion, correction and definition. There is no inherent chronological sequence in these activities, and they are not in principle mutually exclusive. Indeed, we have pointed out that the co-presence of several of them is the rule rather than the exception, and that the various models of industrial relations are mainly differentiated by the prevalence of one or other combination of them.
Thus, whilst pluralist models
are distinguished by the prevalence of correction or exclusion activities combined in part with admission and promotion, it is these latter features that have predominated in models of organised pluralism, and even more so in neo-coporatist ones, although in this case they have been flanked by the correction/selection of actors and the definition of goals. By contrast, the neo-liberal offensive against the industrial relations system conducted with especial vigour in the United Kingdom during the 1980s and early 1990s mainly involved exclusion, and to a lesser extent correction, the aim being to constrict the key components of industrial relations: representation, collective bargaining and industrial action. The previous observations could be simply summarised as in Table 1.
Table 1 .
Types of state intervention in I.R. models
Legenda: * : lowest intensity ***: highest intensity
31
This confirms that these activities do not follow an inherent temporal sequence, and that a solution to the difficulties that arise in the relationship between political regulation and industrial relations may also lie in massive intervention by the state, taking the form of exclusion activity designed to restore an almost pre-pluralist context. On the other hand, events in the majority of European countries in recent years, and the experience of the European Union itself, show quite clearly that political regulation may successfully employ the industrial relations method, involving the large and encompassing collective actors as a resource to achieve more effective government action in the new circumstances of economic globalisation. This orientation is coherent with collaborative-participative models already widespread in the 1960s and 1970s, but today innovated by the more forceful presence of the correction and definition of actors and goals, and in part also of exclusion (see the regulation of conflict in the public services, or the more frequent recourse to the public mediation and conciliation of collective disputes) in order to facilitate both the pursuit of traditional macroeconomic goals and the concerted reform of labour-market rules and institutions at the micro level.
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