Another current issue is that through management’s tendency to focus on efficiency and flexibility, the use of HRM practices has taken greater importance in Canada’s recent history. The climate of uncertainty and insecurity associated with workplace change pose both threats and new opportunities for unions. The successive waves of downsizing in large private sector corporations and the public sector, the increased emphasis on outsourcing and contracting-out, and the expanding use of temporary and part-time work are eroding the organizational and bargaining strength of the unions. Similarly, growing employer demands for concessions in wages, benefits and work rules are straining the ability of unions to effectively represent their members in defending and advancing worker rights and promoting social justice, equity and fairness in employment. On the other hand, union involvement in change initiatives has the potential to expand their independent role and functions in the workplace and to gain influence at the strategic levels of business decision-making. Thus, regulating the pace and nature of the increased usage of HRM practices and other workplace change is one of the greatest challenges facing unions in Canada.
2.4 Outcomes
Many unions are getting actively involved in the change process by developing their own agenda on workplace change, identifying the elements of change that will benefit membership and strengthen the union, and seeking to implant a support system to guide and coordinate the change process taking place at the local level.
Collective bargaining remains the focus of industrial relations in the public sector, and while the period of significant membership growth is past, unions will likely remain strong. Future challenges which face unions in Canada are to learn from human resource and industrial relations innovations and to develop a joint strategy with HRM practices. Despite the intense competitive pressures from the global marketplace, the future course for Canadian industry depends on the response of the parties to these challenges.
References
Thompson, Mark. “Employment Relations inCanada” in Bamber, Greg J. and Russell D. Lansbury (eds). 1998. “International and Comparative Employment Relations, 3rd Edition” Australia: SAGE Publications, pp. 89 – 109.
3.0 SWEDEN
3.1 Context
Sweden has a total population of 8.9 million of which 4.4 million are in the labor force. Sweden is a welfare-orientated service society with 71 percent of its workforce employed in services and 26 percent employed in industry. At 75 percent, Sweden also has the highest participation rate of women in the workforce among the OECD countries. Sweden has a long history of Social Democratic Governments. Recently, in October 2002 the Social Democratic Party was getting re-elected, and did one of its the best elections in many years.
The Swedish employment relations system as it functions today was established as a model during the 1950-60s, but is based on values that can be tracked back to important agreements made between labor and management in the end of 1930. By the Basic Agreement of 1938 basic values and assumptions were set for the labor-management relationship that affect and set a base for the existing employment relations-system in Sweden. The underlying assumption of cooperation in collective bargaining procedures and consultation set by this agreement, laid the foundations for what we today refer to as the “Swedish Model”. The model itself is based on a cooperation philosophy that labor and management have joint responsibility for wage determination and labor peace, while the government should take responsibility for upholding economic stability and full employment. The Swedish model was facilitated by the economic growth that took place in Sweden from the middle of 1950s due to international establishment of many large Swedish enterprises (such as AGA, Electrolux, Alfa-Laval) The country is highly dependant on international trade since it is exporting a great amount of its natural resources. Sweden joined the European Union in 1995 but has not yet joined the European Monetary Union (EMU).
Issues that have been in the forefront of concern during the last couple of years that has a major impact on employment relations, include industrial restructuring. Both companies within the traditional manufacturing industry and within the telecommunication industries have had to make many redundancy notices since the beginning of 2000 due to economic difficulties. However, the employment levels remain high in other sectors of the Swedish industry and the `open´ unemployment rate remained below 5% at the first quarter of 2002, compared with 5.0 % in 2001 and 5.8% in 2000, according to Sweden Statistics.
3.2 Actors
The unions and employers organizations are in Sweden referred to as the Social Partners. Organizations at both sides are large and well funded by international standards. The Social Democratic Governments has always had tight connection with the labor movement in Sweden.
The three union confederations are the blue-collar Swedish Trade Union Confederation (LO), the white-collar Swedish Confederation of Professional Employees (TCO) and the graduate Swedish Confederation of Professional Associations (SACO). LO is the largest one of the unions with a total of just over 2 million members as at 31 December 2000. According to a study published in spring 2001 Swedish trade unions are facing differing trends in membership. The total membership of Swedish trade unions as a hole continued to decline in 2000, with overall union density down to 79% from 84% in 1994. Losses were recorded among the affiliates of the blue-collar LO confederation, while the white-collar TCO and especially the graduate SACO, representing professional staff, experienced small increases. Recently published research indicates that unions and the labor movement as a whole are failing to attract younger workers, especially younger women which could be one explanation for the declines. Another reason for decreasing membership rates, according to the report, is the fact that more and more workers choose only to join unemployment insurance funds (Arbetslöshetskassan), and not the trade unions with which the funds have traditionally been associated which traditionally has been the normal pattern, known as direct membership of unemployment insurance funds.
There are four employer confederations in Sweden of which the Swedish Employers’ Confederation (SAF) is the main organization organizing private employers.
On the employers' side, the main event in during the last ten years was the merger of the main central private sector employers' and industry organizations. In 2001 SAF and the Federation of Swedish Industries (SIF) merged and by that created the Confederation of Swedish Enterprise (Svenskt Näringsliv). This new organization represents some 46,000 firms in 52 member associations. The new organization has stretched out its role as a business representative and partner and not as a central bargaining partner towards the unions. This is an extension of a continuing development of decentralization starting out in Sweden during some years of crisis in the 1980s. Since then the Swedish employers have tried to strengthen the local bargain power and in line with this SAF 1991 announced its withdrawal from its role as central bargain partner.
As part of the philosophy underlying the Swedish Model the role of the Swedish Government is to provide economical stability and full employment and keep out of direct involvement in labor-managements issues. Still the Swedish government has a main influence on employment relations trough its political role and by introducing new regulation that creates a framework for the employment relation system in Sweden. During 1970s many new laws concerning equal rights and employment involvement in business decisions – known as industrial democracy – were introduced which have had an impact over current employment relations. The role of the Swedish government has been relatively constant throughout the last decades. The Social Democratic values are still incorporating the ones of labor interests and it is still keeping up is close ties with the labor movement, even if the economical situation in Sweden have, and still has, made it hard for the government to keep up the underlying principle of full employment and economic stability in the Swedish model.
3.3 Processes
Sweden has two levels of collective bargaining, the national/sectoral level and the local level. The Swedish system has traditionally been characterized by a high degree of centralization in decision making when it comes to accepting collective agreements (including pay-issues) and decisions about strikes. Even trough every union at every different level has its own statues, unions at local levels often gives their mandate to the central union to bargaining on its behalf. During the bargain round of 2001, around 200 national sectoral collective agreements were concluded. Since the mid 1980s there has been a trend of decentralization in the bargain system and collective agreement settings in Sweden. More and more power has been transferred to the local level of bargaining. Despite this development, the coverage is of the national agreements still remains relatively high. 90% of workers in the private sector are covered by collective agreements. This high figure is partly explained by the fact that employers in general still accept collective bargaining as a rational means of setting the terms of employment.
3.4 Outcomes
The Swedish employment relation - system has not remained unaffected of the changes that been taken place in Sweden and in the world since the establishing of the Swedish Model in mid 1950s. Since the mid-1970s different forms of industrial and economical democracy have developed which have affected the role of unions and its power. During the 1980s a new collective bargaining structure emerged. The dominant centralized system that has been dominating the social partnership during the 1960s and 1970s was replaced by a more fragmented and decentralized bargaining structure. Crucial for this development has been the decision of the main central employer organization (SAF) to withdraw from the central bargaining process in 1991. This have affected and to a certain extent also reduced the power of the central unions. Introduction of profit-sharing arrangement and employee stock-owner membership during the 1970s has also contributed to decentralize decision makings and to an increased emphasis on the enterprise levels. The negative economical trends during the last decade and increased inflation problems have put the Swedish model of cooperation under pressure during the last decades, even if its the basic values of cooperation and joint interests of efficiency and rationalization still exists between the social partners and the government which for example have made easier the implementation of new technology in Sweden during the last decades.
References
Hammarstrom Olle and Tommy Nilsson. “Employment Relations in Sweden” in Bamber, Greg J. and Russell D. Lansbury (eds). 1998. “International and Comparative Employment Relations, 3rd Edition” Australia: SAGE Publications, pp. 224 – 248.
Reports from the EIRO:
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“Small Companies Resist Collective Agreements” Sweden, 28 March 1998.
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“Overall Union Membership Declines” Sweden, 28 June 2001.
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“2001 Annual Review for Sweden” Sweden, 21 March 2002.
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“Varying Trends in Union Membership” Sweden, 8 May 2002.
4.0 AUSTRALIA
4.1 Context
Australia is an island continent with 20 million inhabitants. It is highly dependent on natural resources and rural products, and being an island, it also relies heavily on international trade, with imports being over 20% of its $400 billion GDP. Unemployment currently sits at 6.2%, and labor force participation at 74%. The current political environment is stable, with the ruling Liberal-National coalition having been in power for six years, and it appears that their reign will be for at least another 4 years, as the Labor Party is currently struggling under the leadership of Simon Crean.
Australian society is similar to that of most Western countries, with capitalistic and individualistic tendencies prevalent across the nation. However, the extent of individualism may not be as far-reaching as in the United States, as Australians have a bond of ‘mateship’ with their fellow countrymen. This leads to a smaller distance between employees and their managers, such that the working relationship tends to be more open and formal than in other Western countries such as Britain with its class system.
Historically, Australia was established in the late 1700’s by the British as a penal colony, however a move to independence occurred as the new immigrants saw the opportunities that were on offer. The country became federated in 1901, with different powers given to federal and state governments. The State governments were given power under Australia’s constitution to legislate the majority of industrial laws, whilst the federal government was only empowered with respect to conciliation and arbitration to prevent and settle industrial disputes extending beyond the limits of any one state. Whilst this setup is still the case, each of the 6 states have accepted quite uniform laws with regards to industrial matters.
4.2 Actors
During the late 1980’s and early 1990’s, the Labor Party was in government, and many pro-union policies helped the unions to reform and restructure to be able to serve their members more and have more influence in workplace bargaining. There is a unique system in Australia of industrial awards. Under this scheme, the government of each state historically set out minimum employment conditions which could be negotiated over by unions, but not under. The federal government also has the ability to prescribe federal awards. Australia also has a unique system of compulsory arbitration. Under the arrangement, disputes between two parties must be brought to the AIRC (Australian Industrial Relations Commission) if they can’t be settled between the parties. The decisions of the AIRC are binding on all parties.
The Australian Council of Trade Unions is the only union confederation in Australia. Under it’s auspices lie unions representing different industries – for example the Maritime Union of Australia (MUA), the Shop, Distributive and Allied Employees Association (SDA) and the CFMEU (Construction, Forestry, Mining and Energy Union) being the most notable unions. Within the ACTU structure, there are some unions that are more militant (for example the MUA), and some that are more passive (for example the SDA).
The employers’ side is more fragmented, with a number of associations representing employers in different industries. The largest of these is the Australian Chamber of Commerce and Industry, which was formed out of the Metal Trades Industry Association and the Australian Chamber of Manufacturers in the 1990’s as a response to the restructuring of the unions at the same time, and the Business Council of Australia is also a high-profile employer association.
4.3 Processes
Union power has changed dramatically over the years. Union density (a measurement of the number of employees who are part of a union) has declined substantially from 65% in 1953 to 51% in 1976 and down to 25% this year. This seems to be a global trend and has been brought about by changes in the make-up of the labor force, with more casual and part-time workers. However there is also a trend in Australia away from unions as they appear to be losing their relevance to a lot of workers, particularly in tertiary industries (for example retail and services). With the political shift to the right, there is a tendency towards ‘union bashing’ and the political ties of unions to the Labor Party have come under fire in recent times (many former leaders, as well as the current Labor Party leader, have been former ACTU presidents). Also, the extremism of some unions evidenced in the MUA/Patrick Stevedores dispute a few years ago, where Australian’s were shown images of union members violently picketing and damaging property in a response to Patrick trying to move to a less unionized work force have damaged the reputation of unions.
However, unions are trying to make themselves more relevant by providing a number of benefits to members. Due to the large negotiating power of thousands of members, unions can provide significant benefits in the way of discounted goods and services. An example is the movement of unions in the early to mid 1990’s to encourage the uptake of personal computers in Australian households. Many unions encouraged their members to purchase computer systems and provided excellent discounts, regular training and extended support. Although this is out of the scope of industrial relations, it showed that unions were concerned about their employees in general, and not just in the work-force. Obviously the union also provides benefits within the work-force, such as greater bargaining power (despite the shift towards enterprise bargaining), dispute resolution (if employers are treating their employees badly, the union is often the first port of call), and negotiated conditions. The influence of unions has decreased in recent years due to the change in politics, and also the negative images that are painted by Australian media. The media tends to focus on the more militant and extreme unions, and regularly partakes in union bashing. This may be explained by the fact that two very powerful businessmen practically own all of the media outlets in Australia, and it is well-known that Rupert Murdoch and Kerry Packer are anti-union, and want to cozy up to the government in order to influence legislation relating to media ownership.
Finally, as union relevance declines in Australia, there is a movement towards union alternatives. Collective bargaining on a workplace level is becoming more prevalent, with individuals often negotiating on their own behalf with employers over working conditions and terms of employment. Furthermore, the rise in HRM practices has lessened the need for unions, especially in the service sectors where mostly white-collar workers are concerned. Within blue-collar industries, the unions are still strong, however businesses are trying to take advantage of new legislation which allows them to employ non-union labor. Through collective bargaining and individual negotiation, employers are trying to find their way around unions and are providing viable alternatives to their employees.
4.4 Outcomes
In summary, the changing political and social landscape has meant that unions have suffered a significant decline in power over the past 30 years, and this has been at an increasing rate especially over the past six to seven years. With union density declining, more viable alternatives being offered by employers, and the reduction in union influence due to the negative picture painted of them in the media, union power in Australia has declined significantly, despite attempts by the unions to offer more benefits and attempt to be more relevant. Although this is a global trend, unions still play an important role in Australia’s employment relations landscape, and they will be around for a long time, especially in the blue-collar and public sectors.
References
Davis, Edward M. and Russell D. Lansbury. “Employment Relations in Australia” in Bamber, Greg J. and Russell D. Lansbury (eds). 1998. “International and Comparative Employment Relations, 3rd Edition” Australia: SAGE Publications, pp. 110 – 143.
Kemp, Murray C, Ngo van Long, Kazuo Shimomura. 1991. “Labour Unions and the Theory of International Trade” Amsterdam: North-Holland.
Petzall, Stanley B, Keith Abbott and Nils Timo. 2000. “Australian Industrial Relations: in a South East Asian Context” Victoria: Eruditions Publishing.
Svensen, Stuart. 1997. “One Big Union: A History of the Australian Workers Union” Industrial Relations Journal, Sep 1997, volume 28, issue 3, pp 246 – 248.
Australian Bureau of Statistics,
5.0 DISCUSSION
Over the past thirty years, union power has changed over the three countries that have been examined in this paper. There are a number of reasons for this, and in the following discussion we will focus on four factors that we believe go some way to explaining these changes. These factors are: union density, alternatives to unions, political changes, and globalization and decentralization.
5.1 Union Density
Throughout the analysis of Canada, Sweden and Australia, it appears that union density has changed in these three countries, but in different ways. Unions in Sweden and Australia have experienced decline in membership over the past thirty years, however Canadian union membership has been relatively stable, but within Canadian unions, the make-up of members has changed significantly. One of the main reasons for these changes is that unions have experienced trouble attracting youth, women and minority groups. In both Sweden and Australia, unions seem to have lost relevance to young people, and both Australian and Canadian unions are struggling to draw women and minority groups. Whilst there have been programs aimed towards women across all three nations, these have generally been less than successful in gaining new female members. There have also been changing public attitudes towards unions. For example, in Australia the media has promoted the militant side of unionism, which has caused a shift in public perception away from the unions. A further reason for the reduction in union density has been the development of a more flexible workforce; with the increase of part-time, temporary, contract work across all three nations: an explosion in part-time and casual jobs across all three nations has meant that new employees are choosing not to join unions who have traditionally appealed to blue-collar, full-time workers. Growth in the private and service sectors has also meant that unions have lost their relevance to a wide number of employees due to their traditional stance: the white-collar workforce tends not to be unionized as heavily as blue-collar industries. Unions need to address this issue of relevance, and it will be further discussed in our recommendations and conclusions.
5.2 Alternatives to Unions
The increase in the white-collar workforce as a result of the shift to the services industry has meant that Human Resource Management (HRM) practices have become increasingly important (especially in Canada and Australia) and provide in many instances a viable alternative to unions. As unions in these two countries tend to be separated from management, there is more incentive for management to deal directly with employees in negotiating working conditions and employee benefits. The use of HRM principles has greatly increased over the past twenty years, and especially in Australia has been a major cause of union decline. However, in Sweden, unions are more integrated with management, as management and labor act together in a cooperative manner: the voice of employees is heard in the upper levels of management through union involvement in mandatory works councils. Within Sweden, companies are integrating HRM practices together with unions in the workforce in order to provide an eclectic mix of unionism and human management. Here, HRM tends to be complementary with unions and work councils, which means that this relationship will be one of co-existence, whilst in Canada and Australia, HRM is presented as a substitute to unions. The difference in approach between Sweden and the other two countries can be explained by the already high extent of union membership.
5.3 Role of Unions in Government
Moving onto a more macro-economic level, political changes in the landscape of Canada, Australia and Sweden have also had an impact on union power. Since the 1996 election of the Liberal Party in Australia, there have been significant legislative changes that effectively dilute the role of unions in the employment relationship, which has contributed to the decline of union power in that country. Canada has a more constant political slant, with the Liberal party being the only real alternative in the country. This has been the case for a significant number of years, which has meant that legislation and policies have been fairly consistent over the past thirty years, which has encouraged fairly stable levels of union membership. In Sweden however, the government is more ‘leftish,’ and is fiercely pro-union. This has contributed to the sustainability of high union density and union power in that country. Although the political history of these three countries is different, one thing is standard across the nations and – unions don’t have as much influence on the government as they have had. Whilst in the past unions may have had a greater say in the formation of macro and micro economic policy and legislation, this has changed due to globalization, the loosening of trade barriers and the influence of other stakeholders. Today it is quite evident that unions do not have as much say in the cabinets of governments as they have in the past.
5.4 Decentralization Due To Globalization
The increase in globalization across the industrialized nations of the world has meant that companies need to be more flexible and adjust to changes quickly. This has encouraged the growth of decentralization of collective bargaining across the nations of Canada, Sweden and Australia. The increased focus on bargaining at the enterprise level is displayed in all of these countries, and it has diluted union power despite the bargaining mechanisms used in each country. For example, the works councils in Sweden require enterprises to be responsive to individual employees, and new legislation in Australia has encouraged firm-level collective bargaining and has led to its prominent use in the employment relationship. The role of the union in the workforce has also changed as a result of decentralization – in Sweden works councils are proactive in that they must be consulted every time a major issue is discussed, whilst in Canada and Australia, there tends to be a different approach whereby unions are reactionary: as enterprises bring in workplace changes, unions then appeal to remove those changes. In this area the role of unions differs between countries.
6.0 OUR RECOMMENDATIONS
The evidence presented in this paper shows that the power of unions across the nations of Canada, Sweden and Australia has changed over the past thirty years, yet is a result of more than one factor. The major influences on the level of union power we think have been the push towards globalization, the development of a more flexible workforce, a large shift from the manufacturing to the service industry, changing political landscapes, more viable alternatives to unions, and the decentralization of bargaining. Unions have lost their appeal to many of today’s workers, and although we believe they will never die, unions must refocus themselves in order to be more relevant and effective in achieving their goals.
Firstly, unions must change their practices and structures to address the issue of relevance. In order to become more appealing to white-collar workers, women, youth, minorities and part-time and casual workers, unions must discover what these groups are looking for in an employment relationship, and position themselves to fulfill the needs and wants of these stakeholders. For too long, unions have been focused on full-time blue collar workers, and today’s environment calls for a radical shift in thinking.
The second issue for unions that needs to be addressed is the rise of HRM practices in the workforce and how unions should respond. Should unions compete with HRM practices, cooperate with them, or concede to them? Through our analysis, we have found that the Swedish model is successful in balancing the interests of unions and HRM in a relationship of cooperation. The reason this happened initially is because of the values of cooperation inherent in Swedish society, and its success has been perpetuated by the high level of union density. Thus, our solution to the question of competition, cooperation or concession to HRM, based on the Swedish experience, is to for unions to cooperate with HRM practices. Whilst the notion of cooperation is a worthy one, there is a problem of implementation in Canada and Australia. Coexistence has worked in Sweden due to high union density in the country, however compared to Sweden, Canada and Australia have lower union densities, and also their society’s culture is not as cooperative as in Sweden. However we would recommend that unions at least attempt to adopt the strategy of cooperation in order to reposition themselves and increase their influence.
Thirdly, as the world gets smaller and smaller due to globalization, we think unions should embrace this phenomenon rather than trying to prevent it, and ‘go global’ themselves. Labor already has a voice through the International Labor Organization (ILO), and this could be the beginning of the firs major international union confederation. As unions have traditionally focused on the national and industry level, and the changing environment has called for a more global outlook, unions could benefit by themselves becoming more concerned on an international scale. There are a number of ways to do this. Firstly, unions can strengthen their collaborative ties with other unions. This could be facilitated through greater international cooperation via a variety of labor organizations. The ILO currently oversees labor relations and employee rights by providing a forum to employers, unions and government. Unions could take a greater role in this, and increase their global influence by extending their collaboration outside the borders of their own countries. Secondly, unions should provide a stronger linkage between international trends and aspects of labor to domestic labor relations. Again, the support of an international union representation would be beneficial in this goal. Finally, due to the competitive pressures that have been emerging, unions must be able to find suitable ways to establish a system in which employees can benefit from, but at the same time being able to have a competitive position in, international markets. Unions have a greater ability than company’s HRM policies to provide a coordinated response to globalization as they have organization-, industry- and nation-wide influence.
7.0 CONCLUSION
In conclusion, our report has shown that in the past thirty years, union power has significantly changed across Canada, Sweden and Australia. There are a number of reasons for this, such as the factors described above – globalization, decentralization of bargaining, political changes, a shift in employment to the service sector, the increased flexibility of the workforce, and more alternatives to unions. Although it is obvious as to how these factors have changed, the type of change (whether an increase or decrease) to union power is near impossible to quantify, as there are no measurable variables of union power, and the definition of union power differs across various countries.
Many of the factors discussed are common to various degrees across all three economies, and this presents a compelling argument for convergence of labor relation conditions. Whilst the argument for convergence between Canada and Australia is quite strong, Sweden is fundamentally different due to the cooperative model used in that nation. Nevertheless there are similar issues – for example, all three nations are at a comparable level of industrialization and globalization, and have experienced a shift to the service sector and increased flexibility of the workforce. ‘Ultimate’ convergence – where there is just one model for unions across these three countries, or even across the planet – is highly unlikely, as there will always be national differences due to culture, society, government, economics and technology.
Whilst changes to union power have created significant issues for unions across Canada, Sweden and Australia, it is likely that unions will never go away. They will probably always constitute a labor voice as they are fundamental actors in these economies (particularly in Sweden), however we believe they need to change their focus. A number of recommendations have been put forward in this report, such as becoming more relevant to the flexible workforce, cooperating with HRM, and embracing internationalization by ‘going global’ themselves.
Due to globalization that is prevalent in today’s environment, and the high degree of industrialization and democratization in the countries examined, if unions want to survive and have an influence on today’s world, we think they must change their role. This will present significant challenges, however by showing strong leadership in adapting to the changing environment, unions can remain relevant to the workforce, and by expanding their collaboration between countries and with international labor institutions (such as the ILO) we believe unions will remain healthy into the future.
