Comparative Labour Relations:

Objectives, Practices, & Challenges

An introduction:
World is becoming more interdependent. Thus
making International and comparative Industrial
Relations come alive again.

Globalization of economy and the intensification

of international competition have stimulated this
renewed interest.

HR related Issues are the defining factors that

determine the success or the failure of mergers
and acquisitions.
The industrial sector is adapting to the
competitive market environment by gaining
competitive advantage through:
Technology,
Automation,
Rationalization, and
Costs.

Hence, the need to understand and appreciate

contemporary differences in perspective and
approach to IR in different countries
Main Factors:
Many of the factors that have characterized the field of
IR in 20th Century appear to be undergoing transition,
if not transformation.

In many of the older industrialized countries, the level

of unionization has been dramatically falling and the
institution of collective bargaining thereby declining.

By contrast, in some of the newly industrialized

countries, unionization is growing
The political upheavals in Eastern Europe have
undermined the former state controlled unions
and have created new institutions.

Within the European Community(EC), the

Social Charter has major implications for the
future shape of labour market institutions
affecting many millions of people
Key Issues:
Changing Role of State in Industrial Relations,

Trade Unions and the future,

Industrial Relations & political transformation, and

Labour market policies and practices.

Changing Role of State in IR
Collapse of Communist regimes in Eastern Europe.

Industrialization in every society after the

destruction of Second World War.

Different societies took separate paths on their way

of industrialization.

These variations related primarily to the

approaches taken by the elites who organized the
process.
Contd…
Comprehensive Regulation of labour
relations as the inevitable consequence of
industrialization.

State to change its role from “Contemplative”

to “activist”

Late 1980s and early 1990s witnessed a major

reformulation of the web of rules so that the
state could achieve its market objectives
 Contd…
The role played by government has varied from one
country to another. For example:
• in Japan and Korea, the State influenced decisions on
the location and type of investments in industry.
• In Southeast Asia, the State's role has been more
facilitative, establishing the conditions necessary to
attract development-related investment.
• In South Asia, particularly India and Pakistan, the State
has traditionally led economic development through
large state-owned enterprises.
Contd…
containing labour costs and encouraging domestic
and/or foreign investment were key factors in
government policies. This strategy emphasised the role
of the State in labour relations as being to prevent or
minimize conflict, through third party intervention
external to the enterprise (ie, via conciliation,
arbitration and labour courts).
There is a general agreement that the state in modern
society must act in the economic sphere, so that the
population has access to a sufficient amount of goods
and services.

In a democratic society, the need of the state to satisfy

the desires of the electorate for a reasonable standard
of living is heightened.
Trade Unions and the future
Throughout the world unions are often closely related
to the state.

“Pluralist unions” which are the norms in Western

Industrialized nations tend to be the exception rather
than the rule.

Sharp decline in Union density in developed

economies, has caused the union movement to
reconsider its role and even its future.
Contd…
Unions seeking influence in decision making
at both government and industry levels.

Emphasis shifting to the need of high levels

of union competence and strong organization
to bargain with employers over issues of job
design, career planning and training.

Trade Unions are at best tolerated, closely

controlled, and often repressed in non
democratic regimes.
Contd…
Trade union federations - national,
sectoral/industrial and/or regional - have
developed as the most common feature of
union structures in the region (eg, Japan, India,
Malaysia, Philippines and Thailand).

A number of countries have only one trade

union federation (eg, China and Singapore);
Role, form, and functions of trade unions
differ from country to country.

Unions face an enormous challenge. Their

task, in often difficult economic and
political circumstances, is to demonstrate
their relevance to members and potential
members. This requires a balanced
response, with attention devoted to
national, industry, and workplace levels.
Industrial Relations & political
transformation
Political transformation will induce a complete
overhaul of Industrial Relations.

In many African countries during the colonial period,

trade unions enjoyed privileged positions and forged
alliances with nationalist governments.

After independence, the emergence of one party

systems or military rule, led to unions being co-opted
into the state apparatus.
Contd…
Diversity of Outcomes for Industrial Relations arising
from political changes across the middle east.

Trade Unions can experience an abrupt setback in

their status once the transition towards democracy
begins.

The impact of ongoing recession in US & Europe, on

political transformations and its subsequent impact on
IR
The relationship between political
transformation and industrial relations may be
considered in two dimensions.

First the myth, a complex image tightly inter-

voven with expectations, aspirations and
conceptual evaluations.

Second the reality which consist of genuine

observations and manifest itself in a complex of
new and unfamiliar processes generating
conclusions and actions.
Labour market policies and practices
Powerful influence of the international economy on
national economies.

Rise of internationalized product markets has not only

diminished the traditional powers of unions but also
reduced the effectiveness of national macro-economic
policies to influence the labour market.

Governments, while having an important role in

creating environment for investment & economic
development, find themselves in conflict with the
global interests of multinational companies that play
significant role in their economies.
Contd…
The real challenge is to develop strategies to promote
productivity and bargaining.

How national economic changes and labour market

policy and institutions affect wage developments at
the industry and enterprise level.

How a firm’s policies on labour are influenced or

shaped by external conditions.
Contd…
In East and Southeast Asia, most economies have
followed an export-oriented industrialization
strategy.

By contrast, in China and South Asia the

industrialization strategy has, until recently, focused
inwards on import-substitution.

IR policies and practices have changed as countries

have progressed from import-substitution to export-
oriented strategies, and as countries have moved to
more sophisticated levels of export activity.
The first way is to examine how key micro
economic variables such as growth, inflation
and employment affect and are affected by
labour market policies and institutions.

Corporate pay policies and the

internationalization of markets, analyses the
relationship between bargaining structures
and micro economic performance.
Assignment: Research Paper
Carry out a PEST( political, economic, social and technical
factors) analysis of changes in the context for Employee
Relations in the given country. Also locate major styles of
employee relations management within the context.

Countries;
Japan, China, South Africa / Nigeria/ Ethopia, USA, UK, France,
Germany, South Korea, Taiwan, Malaysia, Canada etc
Brazil, Mexico, Argentina, New Zealand and Australia

Last Date: 20th April 2022