MGTO 630C Staffing and Managing Human Resources

1. Please note: This is only a preliminary version of the file that will be shown in class. Depending on the flow of in-class discussion, we may not be able to discuss all the overheads in this file. MGTO 630CStaffing and Managing Human Resources Dr. Christina Sue-Chan Labour - Management Relations Chapters 10 - 11 Saturday, March 22, 2003

2. By the end of the performance management module, you should be able to • Be familiar with some of the international standards / codes of conduct governing labour / industrial relations • Develop insight into joint consultative committees as a mechanism for facilitating two-way conversation between employees and management • Hong Kong • Germany • China

3. International Standards and Codes of Conduct • United Nations Code of Conduct for Transnational Corporations • UN Declaration Against Corruption and Bribery in Int’l Commercial Transactions • OECD Guidelines for MNEs • ILO Tripartite Declaration of Principles. Fundamental Principles on Rights at Work • Regional Trade Treaties • WTO/World Bank/IMF • Universal Declaration of Human Rights

4. Global Compact (Initiated by Kofi Anan, Secretary General of UN, 1999) • Labour • Principle 3: freedom of association and the effective recognition of the right to collective bargaining; • Principle 4: the elimination of all forms of forced and compulsory labour; • Principle 5: the effective abolition of child labour; and • Principle 6: the elimination of discrimination in respect of employment and occupation.

5. Independent Codes of Conduct • CAUX Round Table (CRT) • Senior business leaders from EU, US, Japan • Promote principled business leadership • Centre for Ethical Business Cultures • Similar to CRT • Interfaith Declaration • Christians, Jews, Muslims • Social Accountability International • Social Accountability 8000 (SA8000) • Specific performance standards set with minimum requirements; auditors consult with and learn from interested parties, such as NGOs, trade unions and, workers; complaints mechanism

6. Labour / Employee Relations • Hong Kong • Haeco’s Works Consultative Committee

7. Characteristics of Effective JCCs • Management philosophy: win – win for all sides • Management participation • Worker support

8. Principles that Recognize the Role of JCCs as an Enabler of Employee Participation in Organizational Decision-Making • Clear distinction between consultation and negotiation (i.e., issues that may be classified as adversarial collective bargaining) • Management takes initiative to show that the work of the JCC is taken seriously (i.e., appropriate management representation and attendance at meetings) • Employee representatives must have support of workforce they represent (i.e., officially elected representatives with an interest in the well-being of the employees)

9. Employee Participation

10. Characteristics of Communication Infrastructure for Effective Consultation between Employee and Employer • Trust • Formal written constitution • Objectives, terms of office, eligibility for office, etc. • Representation • Training and Education • Stakeholder Model • Essentially concerned with corporate social responsibility • Responsibility for decision making shared among all stakeholders

11. Stakeholder Expectations

12. Are JCCs alone sufficient to represent employee, even when there is a downturn in the economy?

13. Trade Unionism in Hong Kong • 400,000 members in 1977 • 360,000 members in 1984 despite growth of working population by more than 28% • Declines due to • Globalization of markets, intensified competition for global resources, increasing pressures to produce quality goods / services at lower prices  employee involvement • Change from manufacturing to service, small-scale light industry • 32 companies in HK had established JCCs by 1984.

14. What Happened at Haeco

15. Factors that Influence the Continued Effectiveness of the WCC at Haeco • Pay Structure at Haeco • Strained relationships in stakeholder’s model • Downturn in economy (esp. loss of Cathay Pacific revenues); competition • Representativeness of WCC • HAECOEU establishment bring into question how representative WCC is of employees • Trade union effectiveness • Perceived benefits: short-term versus long-term • Employee trust in management undermined by new pay rules

16. Other Jurisdictions • Germany • Co-determination • Works council • China • Labour legislation • Trade unions

17. Statutory Codetermination in the (Federal Republic of ) Germany MANAGING DIRECTOR1 (Labour Director) appointed and supervised by SUPERVISORY BOARD2 Shareholders employee representatives Works Constitution Act, 1972 elect Iron & steel and coal indus. Codetermination Act, 1951 Works Constitution Act, 1952 Codetermination Act, 1975 SHAREHOLDERS’ MEETING elect WORKS COUNCIL elect EMPLOYEES support election proposals TRADE UNIONS 1Chief Executive Officer; 2Board of Directors

18. Works Council Works Council Rights Codetermination Participation Working hours Workforce planning Dismissals Methods of payment Work procedure Vacation Job situation Social amenities Establishment organization Vocational training Establishment order Operation changes Hirings Protection of labour Transfers

19. Legal Framework Supporting Unionism in China • PRC, Labour (Union) Law (April, 1992) • Article 3  general and universal right of all employees to organize and join trade unions • All manual or non-manual employees in enterprises, institutions or state organs within the territory of China who rely on wages or salaries as their main source of income, irrespective of their nationality, race, sex, occupation, religious belief or educational background, have the right to organize and join trade unions according to law.

20. Employment Contracts (PRC) • Individual contracts, 1980 • Contract must comply with laws and regulations of PRC • Contract must be based upon voluntariness and equality • Contract must be accepted by both parties after negotiations between them

21. Written Contracts (PRC) • Terms: fixed term or flexible term • Content of work • Work protection and working conditions • Wages and method of payment • Work discipline • Termination of the contract • Responsibility for the violation of the contract • Revoked upon agreement between the two parties

22. Collective Employment Contract • Written agreement between representatives of staff and workers as one side and enterprise on other • Trade Union Law • Trade union represents party of the staff and workers • In non-unionized enterprise, representatives democratically elected by staff and workers and require agreement of more than half of all staff and workers • 75.8 million (less than 50%) of total staff and workers in urban areas covered by collective contracts

23. Employee Representative Associations • 112.44 million employed by state-owned enterprises; 6.2 million employed in private enterprises in urban areas in 1996. • No employer representative organizations acts as major mouthpiece for employers • Employee Representative associations • All-China Federation of Trade Unions • All-China Women’s Federation

24. Trade Unions • 586,000 unions in 1996 with 102.1 million members • Assist enterprise in organizing workers and staff • Promote state economic reforms and economic policies • Improve worker’s technical skills and education level • Provide welfare services • Represent workers and staff to protect legitimate rights

25. Dispute Settlement Mechanism • Mediation and arbitration at enterprise level • Filing of application for mediation • Mediation committee investigates • Mediation begins • Mediation agreement in writing

26. Common Types of Labour Disputes • 3 types of labour disputes • Means of terminating relation between employing units and employee • Wages, benefits, social security, training • Labour protection and insurance

27. Debate • Do labour unions (employee representative associations) have a role in promoting and maintaining effective / good employee – employer relations? • Lessons from Europe may be instructive

28. European Unionism Today • Economic restructuring (Monetary union beginning in 1992) • Loss of common, cohesive workplace identities • Weakened political support • Renewed support for far right parties (e.g., Netherlands, France, Austria) • Social-democratic parties distanced themselves from unions (e.g., Tony Blair’s Labour Party in UK) • Employers everywhere have challenged union influence in an increasingly competitive global economy • Organizing strategies by unions to reverse declining membership, targeted especially at women and younger workers, have so far been limited both in effort and success • Have maintained influence through participation in recent national pacts • European Monetary Union criteria, economic growth, and unemployment Source: Martin, A., and Ross, G. … [et al.] 1999, The Brave New World of European Labor: European Trade Unions at the Millennium. Berghahn, New York.

29. Follow-up • Learning-styles survey