Budget heading 04.03.03.03 VP/2006/003/332 Information, consultation and participation of representatives of undertakings GLO.R.I Globalisation and industrial relations. Information and consultation rights in some chemical TNCs Salvo Leonardi, Jurgen Kaedtler, Anna Kwiatkiewicz, Richard Pond (cid:190) Istituto di Ricerche Economiche e Sociali (IRES) – Rome; Italy (cid:190) Soziologisches Forschungsinstitut (SOFI) – Gottingen; Germany (cid:190) Bernard Brunhes Polska (BBP) – Warsaw; Poland (cid:190) Working Live Research Institute (WLRI) – London; UK Rome, November 2007 With the support of the European Commission and the collaboration of EMCEF, FILCEM-CGIL, FEMCA-CISL, UILCEM-UIL 1 Contents Preface First Part A theoretical and comparative framework Workers’ Participation in Enterprise Management. Salvo Leonardi – IRES, Rome Industrial Restructuring and Workplace Democracy in Europe: some outcomes from the Glori fieldwork Richard Pond – WLRI, Metropolitan London University The Industrial Relations in the European Chemical Industry Jurgen Kadtler – SOFI, Gottingen Vocational training programs as a factor underlying workers’ activity Anna Kwiatkiewicz – BPI Polska, Warsaw Second Part The Case Studies Basf and Continental. Social Partnership in the German Chemical Industries in a European perspective Jurgen Kadtler Basf: a case of ‘Negotiated Globalisation’ Jurgen Kadtler Continental A.G. Jurgen Kadtler Michelin Polska S.A. Anna Kwiatkiewicz Zakłady Azotowe Puławy Sa Anna Kwiatkiewicz Solvay Riccardo Sanna Pirelli Salvo Leonardi GlaxoSmithKline - GSK Richard Pond 2 Preface The project GLO.R.I. has been realised within the framework of the budget heading 04.03.03.03, according to the priority about “to monitor, analyse and assess the experience regarding the establishment of transnational representative bodies at enterprise level and the extent to which the objectives regarding information consultation and participation have been fulfilled effectively with such bodies”. Its objective has been: “to improve the social partners expertise, at European level and in comparative terms, through the promotion of an exchange of information and experiences among stakeholders involved in the industrial relations of four European member states”. The project has been promoted and coordinated by IRES and realised on mandate of workers organisations of the chemical and rubber/tyre sectors; the national federations of the Italian chemical trade unions (FILCEM-CGIL; FEMCA-CISL; UILCEM-UIL) and the European sectoral federation: the EMCEF. The countries directly involved in the project have been four: Italy, the United Kingdom, Germany and a new member State, from the Central and Eastern Europe: Poland. The partnership was including the promoter, the Istituto di Ricerche Economiche e Sociali (IRES), the think-thank institute of the main Italian trade unions confederation: the CGIL, and the partners, the Working Live Research Institute (WLRI) – London; UK, the Soziologisches Forschungsinstitut (SOFI) – Gottingen; Germany, the Bernard Brunhes Polska (BBP) – Warsaw; Poland The whole activity has been inspired by in the spirit of the mutual learning and by the purpose of the valorisation of the involvement of national and local social partners, throughout national/local workshops for the choice of the TNCs for the case studies; during the field work and the interviews; with the international final conference (the main event), where more than 50 participants have discussed – in a transnational milieu – the results of the research; its items; its perspective. A debate of a very high profile, with experts with academic backgrounds and important representatives of the sectoral European trade unionism, included – among the others – the General Secretary of EMCEF, Mr. Reinhard Reibsch. From this point of view the practical involvement of employees, workers’ representatives has been a constant feature of the whole project. 3 The GLORI project has been realised in two sectors/branches: the chemical and the rubber- tyre. Two productive realities with strong traditions of industrial relations in most of the countries, with a marked attention on the items of the workers participation; often more than in any other manufacturing branch. Both sectors have seen major changes over the last 20 years as employers have reorganised and restructured and gone through a series of takeovers, mergers and de-mergers in response to competition at both European and global level. In fact, in line with other sectors that operate at a global level, tyres and chemicals face an almost permanent process of restructuring. The European TNCs of the chemical and rubber/tyre sector played a quite crucial role in launching, from the beginning, the experience of the EWC. The GLORI project set out to investigate the role played by EWCs and national forms of consultation (works councils) in the restructuring process by focussing on the tyre and chemicals sectors in Europe. There is thus potential to link EWC activities to bargaining and company representation. The GLORI project has been strongly rooted on the methodology of the fieldwork. At such an aim, a couple of TNCs was selected for each sector/branch and each of the four countries involved in the study. They have regarded eight important TNCs, with an European Work Council established. In fact: “With regard to the micro-economic consequences of collective bargaining, their specific nature means that they can only be studied seriously case by case” (European Commission, 2006). The 7 case study were selected among some of the most internationally known and influential TNCs of the two branches. They were: Basf and Continental for Germany; Z.A. Pulway and Michelin for Poland; Solvay and Pirelli for Italy; GSK for the UK. The study has been a qualitative investigation into the entirety of the processes of communication and interaction that condition and affect the industrial relation system either at national and international level (EWC). With this approach we’ve intended to cover not only formal arrangements, but also informal information and communication networks. The fieldwork was realised during the months of the preparatory phase, and consisted in: (cid:190) Analysis of the documents and literature related to the sector and company, from the different aspects and profiles (business and internationalisation; employment and labour market; industrial relation; EWC; etc.); (cid:190) Interviews in depth with some privileged witnesses, as managers, employees, workers’ reps, trade unions officials, at all the different levels where they normally played their 4 role: plant/company, territorial, national, European (in the cases of the EWC delegates). In average no less than 7 persons, and in some case, even more than 12. Every single case study has been much more than a sketch of the companies selected. It has been a work in depth, where the participatory machinery related to the EWC has been rooted into the wider and long lasting tradition of industrial relations, with a special focus and concern to the most recent development of globalisation and international challenges. In each case study were investigated the general legal frame (legislation and collective agreements of the partner countries) and, even more, its effective functioning in the concrete industrial dynamics within the undertaken, as revealed by certain indicators (frequency and quality of the collective bargaining and participatory machinery; union density), and by the interviewed witnesses (social climate at the workplace level; industrial relations traditions; human resource management style; approaches and cultures of the parties). The final study report is composed by a first part, including four different chapters where horizontal and wider theoretical items are tackled (basic concepts and the theoretical international litterature, the so called acquis communitaiere, the cleavages and international comparisons) and by all the different national case studies, in the second part. Salvo Leonardi Project Manager 5 WORKERS’ PARTICIPATION IN ENTERPRISE MANAGEMENT Salvo Leonardi – IRES, Rome 1. Workers’ participation and industrial democracy In an essay written some years ago, Macpherson outlined the following theoretical distinction between industrial democracy and economic democracy: while the former concerns, above all, the decisions in connection with production (working conditions as well as production methods and targets), the latter concerns, above all, the distribution of social goods for society as a whole1; the distribution of a definite pay but also the distribution of powers and opportunities within the sphere of economics. Although referring to differentiated areas of concern, the proposals in connection to economic democracy and to industrial democracy have assumed, in the long debate they have generated, a common departure point: the enterprise, as well as the market, are inadequate venues, as a general trend, to ensure the workers’ direct participation in the processes that govern production and distribution of wealth. The rise, in the age of liberalism, to absolute sovereignty of private property in the means of production, and of the power of the entrepreneur, has for a long time impeded that the criteria adopted to define civil and political citizenship in modern democracies be also applicable to the economic sphere. As often pointed out, social citizenship and democratic rights have always come to an abrupt halt at the factory gates2. Why? The reason lies in the fact that modern industry (and the capitalist one in particular) is not, for its nature – nor can it be – a democratic organisation in the sense we are used to attribute to this expression3. From a democratic organisation it lacks, first and foremost, the crucial requisite represented by the formal equality of all the members that belong to it. Inasmuch as they are the owners who bear the risk, entrepreneurs – according to classical economic doctrine – have the right, and the power, to determine the goods to be 1 C. B. Macpherson, Rise and Fall of Economic Justice, 1990. 2 The effects of this exclusion are both econmic and political because it leads to a democratic deficit, to what Norberto Bobbio defined in many of his essays as an unaccomplished democracy (“democrazia dimidiata”). On these aspects see pluralist theorists, like – among the others – C. Lindblom, Politica e mercato, Etas, 1979 or R. Dahl, A preface to the economic democracy, Cambridge Polity Press, 1985. 3 H.A. Clegg, Trade Unions as an Opposition which can never become a Government, in “Industrial Democracy and Nationlazation”, Blackwell, 1951; pp. 19-28. 6 produced, and in what quantity, the contents of the work to be performed by others and the organisation of the productive process. From this point of view, labour subordination manifests itself as the exclusion of workers and their subjection to the executive, hierarchical and disciplinary powers of the entrepreneur-employer. It is from this ontological and structural asymmetry of power that the historical discourse on industrial and economic democracy originates; on workers’ participation in enterprise management. Their common objective is to try and balance the typical managerial prerogatives that in an enterprise are differentiated and asymmetric in terms of origins and functions. Both sociological and juridical theories agree in retaining that the unifying character of participation lies in the enhancement of the quality of work by promoting the human and social value of workers, by reducing their alienation4 and by turning them into the active subjects of production, elevating them from the status of objects. Generally speaking, a modern system of industrial relations can give a very important contribution to a good governance5 of a modern industrialised market economy. A well structured industrial relation machinery, based on a good and effective mix of collective bargaining and participatory rights, contributes: (cid:190) to transforming social conflict (workplace disputes) into consensual agreements between the social parties (cid:190) to providing a socially acceptable framework for market and economic dynamics (cid:190) to reducing the uncertainty of strategic decisions (cid:190) to preserving the long-term stability of the political system (cid:190) to fostering the development, social harmony and cohesion of the group High labour standards are necessary to promote productive efficiency, worker efficiency, consumption and employment growth. As a leverage technique in corporate decision-making processes, the significance of workers’ participation lies in those institutional practices and in those procedures that allow workers to collectively exercise a power in intervening on and in balancing the power entrepreneurs have in the running of the enterprise, in other words, in checking the so-called managerial prerogatives. The power to influence does not go to the extent as to directly and 4 Among the many others, Y. Delamotte, Conflict industriel et participation ouvriér, in “Sociologie du travail”, n. 1/1959; P. Blumberg, Industrial Democracy; the Sociology of Participation, Constable, 1967; G. Friedman, Problemi umani del macchinismo industriale, Einaudi, 1971. 5 For Governance we here define the way societies organises and rule themselves in order to make and to implement choices of public interest. 7 immediately weigh on the merit of the entrepreneurial decision though it can affect the legitimacy of its exercise. Such a workers’ participation can assume, and in fact historically has assumed, different degrees of intensity; from a mere information to consultation, to codetermination and even a power of veto. According to EU Directive 2001/86: information means “the informing of the body representative of the employees and/or employees’ representatives by the competent organ of the SE on questions which concern the SE itself and any of its subsidiaries or establishments situated in another Member State or which exceed the powers of the decision-making organs in a single Member State at a time, in a manner and with a content which allows the employees’ representatives to undertake an in-depth assessment of the possible impact and, where appropriate, prepare consultations with the competent organ of the SE”. Consultation means “the establishment of dialogue and exchange of views between the body representative of the employees and/or the employees’ representatives and the competent organ of the SE, at a time, in a manner and with a content which allows the employees’ representatives, on the basis of information provided, to express an opinion on measures envisaged by the competent organ which may be taken into account in the decision-making process within the SE”. According to the two EU Directives 2002/14: information means “transmission by the employer to the employees’ representatives of data in order to enable them to acquaint themselves with the subject matter and to examine it”; consultation means “the exchange of views and establishment of dialogue between the employees’ representatives and the employer”. Beyond all possible formal classifications – information, consultation, joint-decision making, co-determination – the ability to influence each other will depend, besides the balance of power that is established at specific moments of history, also on a number of factors: a) The issues for which workers’ participation is sought; b) The type or class of decision (operative, administrative, strategic) c) The decision level of participation (department, company, group); d) The time when the information is disclosed and consultations begin and if they will focus on problem setting or solving; e) The trade union players involved and the functional prerogatives they are empowered with; f) The degree of formalisation with which these prerogatives become regular, certain, pre- emptive and legally claimable. 8 To tackle the issue of workers’ participation by starting-off with the decision class means taking into consideration the issues that entail workers’ participation. Generally speaking, the acknowledged venues of workers’ participation tend to widen when operative decisions are involved. On the other hand, this is a context where all studies on the new post-Fordian paradigms converge on. Nevertheless, it should also be observed that workers’ participation has increased significantly on “micro”, on specific, aspects of work and on the way it is discharged. On the contrary, when strategic decisions are involved – decisions relating to productive strategies, investments, planning and technical or organisational changes – workers are merely informed. And that, too, in the best of cases. At these levels, the instruments or, more simply, the way workers are involved never really imply the existence of industrial democracy processes. The unilateral management remains unaffected when responsibilities are widened and workers involved but at the mere executive levels, in the workplace. According to a recent research with the EWC members (Waddington, 2006), the information and consultation on crucial issues, like restructuring, mergers or take over, was rarely before decisions were implemented; normally the were not consulted or only after the decision was already made public6. The situation is further aggravated by the increasingly multi-national structure of the modern corporate aggregation (Ramsey and Haworth, 1989), often making it impossible to identify the centres of power where the decisions affecting national/local units are taken. The weakening of the national trait of enterprises diminishes the possibility with which trade unions and political power were able in the Seventies to discuss more advanced forms of industrial and economic democracy (see the British Donovan and Bullock Report; the Scandinavian and German laws on co-determination and economic democracy, the Auroux bills in France; the Italian Unions’ proposals about the “Piano di impresa”). The picture outlined over the past two decades not only in Italy but also at a more general level is that of the demise of the idea on which the Keynesian-Fordist rested and the economic democracy it entailed: the idea, as an Italian sociologist – Enzo Rullani – put it, “that it is possible – that it is necessary – to plan through consensual political means the development of the economy, not only at a macro but also at a micro level, on the basis of a negotiation involving large social interests" (1997; p. 16). 6 J. Waddington, How EWC members see it, in “Mitbestimmung”, no. 8/2006; p. 43. 9 Many international studies show that choices, strategic trends of firms, on microeconomic side, are strongly conditioned by global and integrated patterns, the ‘Globalisation’ indeed, as this process is called in literature, produces clear effects on industrial relations models at the national level (Supiot, 1999; Hoffmann, 2002). It is well known that the increasing presence of transnational companies in different national contexts tends to influence productive and organisational models, which could strongly affect the social and regulative systems set up during long periods of economical development after the Second Word War. Due to functional differentiation of internal organisation and in a complex network of centralising and decentralising tendencies, firm power can be inclined to elude – to “escape” – from the traditional places of industrial relations in two ways: a) downwards through productive and decision making decentralisation of new work organisation and also through the search for direct participation of individual employees or groups; b) upwards through the protection of legal status, through the trans-nationalisation of big holdings. Relocation, at the international level, represent one of the biggest concern of many Western European employees and of their collective organisation (Leonardi, 2001). A key factor in resolving issues is that of timeliness. Advanced models foresee the disclosure of pre-emptive information. Information, in other words, must be issued prior to the executive stage of the project, and it must be clear and comprehensible even for non- experts. According to the Directive 2002/14/EC: “Timely information and consultation is a prerequisite for the success of the restructuring and adaptation of undertakings to the new conditions created by globalisation of the economy, particularly the development of new forms of organisation of work”. The question that must be asked at this stage is the following: which are the indicators workers and their trade union representatives must record to understand that a business project involving them directly is about to be implemented? The question is of crucial importance because in a labour negotiation trade unions must be put in the condition to stress the exact sequence with which the counterpart implemented the change. True, there isn’t a formal element that can define with exact precision the initial moment of a corporate change, making it extremely difficult to oblige the company to provide to the trade union representatives the mandatory information. Consequently, this issue will depend on the employers-workers relationship that exists in each firm. 10