1	IRHRM in Germany Lecture 1 of 4 Contexts, Ideology, and Unions
2	Administrative Collect papers Read chapter on Germany in BLW
3	Review Canada ‑ bargaining system with substantial gov't intervention and moving in very different directions from USA ‑ high conflict Britain ‑ a laissez faire system becoming less so ‑ moderate conflict Sweden ‑ a highly successful laissez faire system becoming less laissez faire and with its highly centralized bargaining structure under strain ‑ low conflict France ‑ a legalistic and ideologically fragmented system ‑ moderate conflict Italy ‑ a non‑legalistic and ideologically fragmented system ‑ high conflict
4	Today I‑ Themes II‑ Political, Technological, and Economic Contexts of IRHRM III‑ Ideology IV‑ Workers Organization‑ The Trade Unions
5	I‑ Themes Dual System of Bargaining and Codetermination Unions represent employees across enterprises Codetermination represents employees at enterprise or workplace level Highly legalistic Low conflict Historically unstable ideologically stable system Unification with the East still ongoing
6	II‑ Contexts - Political Political ‑ Population of 82 million 2005 Political union with East 10/90 Parliamentary Democracy - Federal system
7	II‑ Political Context Parties CDU/CSU Christian Democrats SPD Social Democrats Free Democrats‑ liberal/middle of road Greens - environmental reformist party Party of Democratic Socialism, ex-East German Communist Party Proportional representation system makes absolute majority unlikely
8	II‑ Technological Context Among most technologically advanced countries in the world Major industrial activities Higher percentage labor force in manufacturing than any country in course Population almost totally literate – 99% Per capita GDP purchasing power parity 2003
9	II‑ Economic Context Comprehensive social insurance and welfare state 2003 taxes 2003 government spending Highly open economy Gender equality Child Poverty
10	II‑ Economic Context Satisfactory overall economic performance Guest workers East grew rapidly in early 1990s Unemployment Fewer employees working over 40 hours than any country in course High wages but not high unit labor costs
11	III‑ Ideology Workers Organizations - Completely reformist Employers - Accept both unions and bargaining Unions, employers, and all major political parties have all accepted collective bargaining Differences largely fought out over role of codetermination Ideologies seem compatible
12	IV‑ Worker Organizations‑ The Trade Unions Unions in the Post WWII Period Industrial unionism Single major federation‑ again to avoid disunity DGB‑ German Trade Union Federation Founded 1949 taking 100 existing unions and merging them to 16 Small Civil Service and Christian Confederations
13	IV‑ Worker Organizations – the Current Period 1994 37% of all employees in unions Largest union was metal workers which has lost membership but is now service workers Public employment more organized than private ~75% level Long history of promoting women's issues and women as union officers
14	IV‑ Worker Organizations Structure and Finances DGB dominant confederation Minor Christian confederation and small unaffiliated white collar and civil service unions compete with DGB unions Structure of individual unions Each has state (land) or regional branches Lowest level is local covering several enterprises High degree centralized control
15	IV‑ Worker Organizations Structure and Finances Unions & DGB have large technical staffs Finances Economic Enterprises First union‑owned bank established in 1920's Unions have financed hundreds of thousands of housing units, own one of country's major banks, major insurance companies, chain of 5,000 stores, travel agency, publishing co, etc.
16	IV‑ Worker Organizations – The DGB Consists of 8 autonomous industrial unions More than 75% union members affiliated Offers affiliates broad scale of services, coordination and arbitration agency, lobbying and propaganda roles Two largest unions IG Metall & Ver.di (public service and transport) have 1\2 total members of all DGB affiliates
17	Next Time Worker Political Organization Employer Organization Government Organization Collective Bargaining
18	IRHRM in Germany Lecture 2 of 4 Worker Political Organization, Management and Government Organization, and Collective Bargaining
19	Administrative Reading for next class – Finish reading on Germany
20	Review Technologically advanced, economically highly developed, Parliamentary Democracy No sharp ideological conflicts Industrially-based unions which are autonomous and financially powerful
21	Today I‑ Workers' Organizations‑ Political Parties II‑ Management Organization III‑ Government Organization IV‑ Rulemaking‑ Collective Bargaining
22	I‑ Worker Organizations‑ Political Parties Unions and the Social Democratic Party Nature of Relationship In principle DGB unaffiliated Most top SPD officials union members Union officials one of the largest occupational groups of SPD Parliamentarians Election time, union officials almost completely mobilized for party purposes until 2005
23	I‑ Worker Organizations‑ Political Parties Unions and the Christian Democrats CDU has strong labor wing Positions traditionally close to DGB on labor, social, and economic issues Over 1/3 CDU parliamentarians are union members Most unions maintain some positions on their executives for CDU members All this helps explain why, after continuous conservative rule in 1969 FRG had among the most progressive labor and social legislation in the west
24	II‑ Management Organization Employer Associations 70% German employers in industry employer associations Metal trades employer association key group BDA - Confederation of German Employers' Associations - made up of the state associations Contains 70% eligible enterprises with ~80% private sector employees Conducts extensive research program, lobbying, provides information and acts as spokesgroup Does no actual bargaining but pools resources for strike defense
25	II‑ Management Organization BDA empowered only to make recommendations to member associations Local governments and state governments Federal Minister of Interior bargains with unions representing federal employees
26	III‑ Government Organization Highly legalistic system. Federal law dominant No government sponsored mediation service Highly developed system of labor courts
27	IV‑ Rulemaking‑ Collective Bargaining Bargaining Structure and Ground rules Negotiations industry‑wide on state or regional level between union and employers' association Few large enterprises have their own collective bargaining agreements, e.g. VW Also some company agreements with small firms National offices on both sides exert strong influence and national officers may be present at regional negotiations
28	IV‑ Rulemaking‑ Collective Bargaining Bargaining Structure and Ground rules DGB can issue only non‑binding guidelines to affiliates Employers in associations forbidden to reach agreement on their own Bargainers on both sides usually empowered to make binding agreements Three basic types of agreements
29	IV‑ Bargaining Structure and Ground rules All employers in association covered regardless of how many unionists they employ If association employees are the majority of industry employees, government can extend agreement terms to cover all employers in industry Public employees
30	IV‑ Substantive Issues – Government Role Social security based on legislation, not negotiation Fringes and legally required benefits add about 70% to direct wage costs Paid leave Some fringes Growth of such legislation in areas of safety, work environment, etc. Union security agreements illegal
31	Job Security Unfair dismissal legislation Layoffs Government limits length of fixed term employment contracts
32	IV‑ Rulemaking‑ Collective Bargaining Bargaining Issues Issues of general wage levels, vacation pay, bonuses and job evaluation systems Hours of work Began to implement 35 hour week in 1993 6 weeks vacation and 10 holidays Annual hours shortest in course, about 1400 Employers now trying to negotiate this back up toward 40
33	IV‑ Substantive Issues‑ Collective Bargaining IG Metall has frequently been the pattern setter Wages‑ Common use of annual vacation bonus up to one month's pay 2000 unions agreed to reduce rate of wage increase by tying wages to productivity
34	IV‑ Substantive Issues‑ Collective Bargaining Issue of accommodation of east and west Separate negotiations in east Some firms have reached (illegal) agreements to pay wages lower than those in the industry agreements
35	Next Time Codetermination in Germany
36	IRHRM in Germany Lecture 3 of 4 Codetermination
37	Administrative
38	Review Labor politics Close relationship of unions to SPD Relationship to CDU/CSU Highly Organized Employers Legalistic Government Intervention Bargaining‑ largely industry‑wide at regional level
39	Today I‑ Codetermination‑ Introduction II‑ Rule‑Making ‑ The Works Council III‑ Rule-making – Codetermination at Board Level
40	I‑ Codetermination - Introduction Three different systems Coal and steel Large companies‑ over 2000 employees Small companies and public sector Three Levels of Codetermination Supervisory Board‑ degree of worker representation Management Board‑ Labor Director Works councils‑ Every firm with five or more employees
41	II‑ Rule‑Making ‑ The Works Council Basic Structure and Functions Council elected by all workers In large companies, some council members do council work full time General responsibility for securing adherence to: Acts of parliament Safety rules Collective bargaining agreements
42	II‑ Rule‑Making ‑ The Works Council "Equal" say with management on "social" issues Wage structures, piece rates, incentive systems Working hours, overtime, breaks, holiday schedules Training, accident prevention, welfare schemes
43	II‑ Rule‑Making ‑ The Works Council On these issues unresolved differences go to binding arbitration or the labor court On "personnel" issues, hiring, firing, promotion, and transfers, prior consent of the council must be secured On financial and economic matters the council largely restricted to rights of information and consultation No strikes or lockouts in Works Council negotiations
44	II‑ Unions, Bargaining and the Works Council In some ways councils and unions quite separate and in some ways they blend together Employers prefer to deal with councils and to let employer associations deal with unions
45	II‑ Unions, Bargaining and the Works Council Closeness of Councils to unions 67% council members are unionists and 75% council officers are unionists Workers often identify council with union Substantive cooperation and coordination between councils and unions
46	II- Works Councils Works Constitution Act of 2001 Increased number of full-time councilors Enhanced role in training and employment security Enhanced role in protecting environment and combating racial discrimination
47	III‑ Rule-making‑ Codetermination at the Supervisory and Management Board Level Background Unions felt full participation in company decision‑making would help prevent misuse of economic power for political ends Share holders hoped participation would head off nationalization
48	III‑ Operation Supervisory board appoints members of management board and oversees its activities Makes major financial investment decisions Worker representatives on supervisory boards have all the same rights & responsibilities as other members Management Boards Conduct day‑to‑day operations Labor Director deals with personnel matters
49	III‑ Coal and Steel Worker representatives on the Supervisory Board have parity - equal representation plus neutral chair Labor Director must be approved by worker representatives on the Supervisory Board Companies trying to escape the full codetermination of coal and steel by mergers and sluffing activities off to subsidiaries
50	III‑ Large Companies Supervisory Boards Parity but one worker representative is a senior manager No neutral, ties broken by the stockholder appointed chair Labor director Appointed by majority of Supervisory Board i.e. can be chosen over opposition of worker representatives Companies sometimes try to re‑organize to avoid this system
51	Next Time Conflict Administrative Rules Themes and Comparisons
52	IRHRM in Germany Lecture 4 of 4 Conflict, Administration of the Rules, Summary and Comparisons
53	Administration Reading for next time Essay Reminder Final Presentation Reminder
54	Review Three Levels on which codetermination occurs Three separate systems Relationship of Bargaining to Codetermination
55	Today I‑ Industrial Conflict II‑ Grievance Procedures III‑ Summary and Comparisons
56	I‑ Industrial Conflict Legal Regulation No statutes but significant restriction by the courts Constitution gives wage and salary earners right to strike Courts have held conflict legal only when conducted in a labor dispute Defensive lockouts legal
57	I‑ Industrial Conflict Union and Employer Tactics DGB rules require 75% vote to strike and approval by national union Union strike benefits usually 55‑75% of wages Employers won't hire striking workers BDA has massive employer assistance funds in case of strikes
58	I‑ Strike Patterns Level of conflict historically quite low Largest strike in post‑war history, metal workers in spring 1984 ‑ Made 1984 worst strike year in many Unions proposed 35‑hour week with no pay cut ‑ designed to combat unemployment
59	I‑ Strike Patterns 1999-2003 by far the lowest work time lost of any country in course March 2000 series of one-hour warning strikes 2002 series of warning strikes by IGMetall 2003 strikes over hours in the East 2004 General Motors/Opel Dispute
60	II‑ Grievance Procedures Workplace Level Little role for union Job of works council to assure compliance with the agreement
61	II‑ Grievance Procedures Labor Courts Exist at local, regional and federal level, all tri‑partite Individual employees can go to labor courts Decide all individual and most collective disputes except those over new terms and conditions Though tri‑partite, overwhelming majority of decisions unanimous
62	III‑ Themes and Comparisons Dual System of Bargaining and Codetermination Unions represent employees across enterprises Codetermination represents employees at enterprise or plant level Highly legalistic Low conflict Historically unstable ideologically stable system Reunification of east and west Workers' Participation coexists here with collective bargaining, but not without some difficulties
63	III- Themes and Comparisons Workers can play major, perhaps even equal, role in policy making in a private enterprise Comparisons
64	Next Time