TOPIC 11
EMERGING ISSUES AND TRENDS IN LABOUR LAW AND INDUSTRIAL RELATIONS
11.1 Emerging trends and issues
- Minimum Wages: In countries which have a legal minimum wage three concerns are evident. The first is that minimum wage levels sometimes tend to be fixed on extraneous considerations (e.g. political), or on inadequate data needed to define the level of wages. The second concern is that such instances have an adverse effect on competitiveness in the global market and on employment creation where the minimum wage is fixed above a certain level (much of the controversy relates to what that level is). Therefore many employers prefer to see the minimum wage, if there is to be one at all, as a ‘safety net’ measure to uplift those living below the poverty line. The third concern relates to increases in minimum wages not being matched by productivity gains which help to offset increased labour costs.
- Flexible/Performance Pay: Many employers, and even some governments, have expressed a wish to review traditional criteria to determine pay levels such as the cost of living and seniority. Pay systems which are flexible (i.e. based on profitability or productivity) so as to be able to absorb business downturns and also reward performance, are receiving considerable attention. One major problem in this regard is how employees and their organizations can be persuaded to negotiate on pay reform. The objectives of pay reform will not be achieved unless reforms are the result of consensual agreement and are part of a larger human resource management strategy and change in human resource management systems.
- Cross-Cultural Management: Due to substantial increases in investment from both Asian and Western investors, many employers and unions are dealing with workers and employers from backgrounds and cultures different to their own. Many of the resulting problems and issues (reflected for instance in the proliferation of disputes due to cross cultural ‘mismanagement’) fall within the concept of cross-cultural management. The problems arise due to differences in industrial relations systems, attitudes to and of unions, work ethics, motivational systems and leadership styles, negotiating techniques, inappropriate communication, consultation and participation procedures and mechanisms, values (the basic beliefs that underpin the way we think, feel and respond), expectations of workers and interpersonal relationships.
- Dispute Prevention: Most countries (other than those in transition to a market economy) have long-standing dispute settlement procedures at the national level (conciliation, arbitration, industrial or labour courts). Essential as these are, they operate only when a dispute arises. Equally important are dispute prevention through communication, consultation and negotiation procedures and mechanisms which operate largely at the enterprise level. Their importance has increased in the current decade when changes in the way organizations are structured and managed have created the potential for workplace conflict. A more positive movement from personnel management to strategic human resource management is called for.
- Industrial Relations/Human Resource Management Training: Not many developing countries have facilities for training in labour law and industrial relations – negotiation, wage determination, dispute prevention and settlement, the several aspects of the contract of employment, and other related subjects such as safety and health. More facilities are probably available in human resource management (the distinction is becoming increasingly thin). Since industrial relations have assumed a particularly important role in the context of globalization, structural adjustment and in the transition to a market economy, employers in each country would need to identify what aspects of industrial relations and human resource management should be accorded priority, how training in them could be delivered, and what concrete role is expected from the employers’ organization.
- Freedom of Association, Labour Rights: Currently, unions are moving towards a concentration on their core industrial relations functions and issues. The need for employees and their representatives to be involved in change and in transition, and the willingness of employers to involve them, is an emerging issue in many countries.
- Changing Patterns of Work: Changing patterns of work (e.g. more homework, part-time work, sub-contracting) have created concerns for unions in particular. Job insecurity, social security and minimum conditions of work are some of them. Traditional industrial relations systems based on the concept of a full-time employee working within an enterprise is increasingly inapplicable to the many categories of people working outside the enterprise. In some countries in terms of numbers they are likely in the future to exceed those working within an organization.
- Women: The increasing influx of women into workforces has raised issues relating to gender discrimination, better opportunities for them in relation to training and higher-income jobs and welfare facilities.
11.2 Coping with emerging trends and issues
First, the increasing decentralization of IR (resulting from the need for enterprises to become more flexible, productive and competitive in the face of globalization) implies that governments must devolve more power and responsibility to managers and workers at industry and enterprise level to enable them to resolve issues of direct concern at the workplace. It will also place much greater demands on the people involved in individual enterprises, and reinforce the requirement for strong and effective workers’ and employers’ organizations which have the capacity to respond to members’ needs.
Secondly, not only will the roles of the “actors” in the IR system be subject to closer scrutiny in the future, so will their underlying values. Equity and stability in IR can only be delivered by the parties themselves. In particular, there will need to be a re-affirmation of freedom of association, the rights of workers, and pluralism. This will require increased attention in some countries to promote the role and legitimacy of trade unions and other workers’ representatives. Other issues, such as eliminating forced and child labour, and reducing (and, eventually, eliminating) discrimination in the workplace, will also have to be given much higher priority. In this context, the role of international labour standards in guiding the parties towards appropriate policies and strategies will continue to be significant.
Thirdly, it will be necessary for IR legislation and supporting rules and institutions to be reviewed, on a continuing basis. The labour legislation in many countries in the region reflects a now outdated approach based on minimisation of industrial conflict. Greater priority should be given to how legislation can be used to establish a framework for managers, workers and trade unions to pursue improved productivity and flexibility on a participative basis, while still providing appropriate protections for workers and a share in the benefits of growth, and emphasing prevention of industrial disputes through greater workplace cooperation. Dispute settlement machinery (including processes and administration) also needs to be made more effective in a number of countries.