*Nadesan Satyendra, text of Comments on General Report by Professor Merryfield on Worker Participation within Undertakings at the 10th International Congress on Labour Law & Social Security, Washington DC USA, 7-10 September 1982
My task today is to offer some comments on what I believe all of you will agree is an excellent general report prepared by Professor Merrifield, a report which serves as a necessary and a very useful data base for any discussion on the subject of worker participation.
Worker participation is a much discussed subject. And I believe that it was our chairman who said somewhere that it was a many-splendored thing. A useful starting point for a comparative discussion may be to inquire why it is that worker participation remains a subject of continuing interest both at national and at international level or conferences. Is this interest a mere fad? Is it a passing fashion? Or does it stem from a recognition that worker participation represents a significant trend, a significant world-wide trend, which cuts across national frontiers in the changing content of the employment relation?
Professor Blanpain made the point, and Otto Kahn-Freund made it some years ago as well, that the employment relation is, in a sense, a power relation. And I believe that that circumstance is a matter of some relevance to any discussion on worker participation. The employment relation is a power relation, and the material reward that each party to the employment relation receives or secures is in some way a measure of the power that that party wields. And it seems to me that worker-participation is a manifestation of a continuing shift in the balance of power between the parties to the employment relation.
In the historical time frame, this balance of power has shifted from that which prevailed in a simple master and servant model, constituted on the basis of the right of the master to command and the duty of the servant to obey. It is a shift which is reflected, for example, even in the change of terminology, from "master and servant" to "employer and employee." Several factors have contributed to this shift. And it is of interest to a comparative study to observe that these factors are in many ways independent of national frontiers.
The growth of skills and technology has had the consequence that an employer cannot command and direct in the same way as he may have done at simple levels of organization. The complexity and nature of the task to be performed often means that output is directly affected by motivating factors. And control cannot be exercised by a simple one-to-one command-obey situation.
Again, economies of scale result in larger organizations, and the employer's right to command is diffused through several links in the chain of command. The manager is himself an employee. And although he manages on behalf of the employer, his interests are not identical to those of the employer.
The same is true of trade unions, as we have seen in Sri Lanka. We see it in every country, even in the developed West. While it is true that trade unions represent employees, the interests of trade unions are not identical with the interests of employees. Like any other organization, a trade union is power center and is concerned with perpetuating its own existence, and with the interests of that power center. Again, at the national level—a point that Professor Blanpain made in a different way, in a different context—federations of trade unions and federations of employers are representative of their members, but at the same time operate as separate power centers.
Further, since the employment relation is directly linked with economic activity, any modern state concerned with managing its economy is an interested party to the employment relation and manifests this interest formally through legislation and informally through income, prices, policies, social contracts, and so on.
All this I think may be subsumed by simply stating that in any organized society, as more and more persons begin to draw from and become dependent on the same natural resources, the growth of each becomes more and more dependent on the growth of all of them. It is this which has led to a movement away from a one-to-one command-and-obey situation, in the simple master and servant model, to more complex arrangements typically involving not only the employee and the employer but the enterprise union, the manager, the national federation of unions, the national federations of employers, where they exist, and the state, as parties concerned with the power relation, and each one of them operating in some areas as separate power centers with their own interests.
I like to look at the employment relation in that way, to see whether this is not some sort of common feature which cuts across national frontiers. This growing interdependence, recognizing the reality of conflict, at the same time is producing a movement towards institutional frames for cooperation between the parties to the conflict.
One thing is clear, worker participation has come to stay. And the movement away from a one-to-one command-obey situation will continue. And to my mind, it is this which gives content to Professor Merrifield's statement in his 'that a general trend towards greater participation is observable’. In fact, there is such a general trend. It is a trend which cuts across national frontiers and is a function, it seems to me, of the size and complexity of economic activity, necessitated by the need more efficiently to manage natural resources. It seems that this general trend is of interest to a comparative lawyer, because apart from any other consideration it affords a useful backdrop against which the characteristics of a particular national institutional frame for worker participation may be considered.
Looked at in one way, each national experience is separate and individual, each is unique. But it seems to me that the question of interest in any comparative study is to inquire whether, behind the jungle of individual instances, there are any common trends and features—to inquire whether the differences between the national institutional frames for worker participation arise from certain underlying circumstances. I deliberately use a general term, "circumstances," rather than "social forces," "culture," or "cultural trends."
One useful methodology may be to inquire how institutional frames of worker participation come about. Do they happen just because they should happen, because it is fair that they should happen? Or since institutional frames of worker participation are concerned with the exercise of power in the context of the employment relation, do they not also come about in the context of the power balances in the particular society? Given that the employment relation is, in a sense, a power relation and that the material reward is a measure of the power that each party wields, it seems to me that the way in which institutional frames for worker participation are established in any given society is a reflection of the power wielded by the parties to the employment relation.
Essentially there are two ways by which institutional frames of worker participation have been established, either through the exercise of state power or through the exercise of the power of employer and employee organizations by agreement. And the way in which institutional frames have been established in a particular country has had some effect on the nature and content of such frames as well. At the risk of oversimplifying, I would suggest that Great Britain, the United States, Canada, and Japan seem to be instances where the state has not intervened in any significant way in the area of worker participation. In these countries it has been through the actions of employer and employee organizations, by agreement or otherwise, that worker participation has evolved.
Professor Merrifield makes the point that in Great Britain, the United States, and Canada collective bargaining remains the main frame of worker participation. I would like to make the same point in relation to Japan, despite the Bullock Report in Great Britain and the great debate in Canada over the question whether some system derived from West German codetermination experience might be adopted. The fact remains that in Great Britain, Canada, and the United States there has been very little state intervention.
It seems to me that one important reason may be the power wielded by trade unions in these countries. Trade unions are power centers. In these countries collective bargaining had been largely at the enterprise level. Trade unions may therefore feel threatened by the creation of employees councils at that level.
On the other hand, in many of the Western European countries the state appears to have played a greater role in establishing institutional frames of worker participation. It may be of interest to inquire why this has happened? Is it an accident? Is it a coincidence? Or is there a difference between the Western European countries and England, the United States, Canada, and even Japan? In both groups there is a pluralistic, liberal democracy in operation. But in one group the state does not appear to have played an active role.
Unlike Great Britain, the United States, and Canada, the nation states of Western Europe were formed and reformed through a painful process of several wars during the 19th and early part of the 20th century. Whether this factor has contributed in some way or whether cultural factors are responsible is a matter which may be usefully looked at in a comparative study of the subject. In times of war the state plays a centralized role in the economy. This may have something to do with the willingness of the nation states of Western Europe not only to codify their laws in the area of worker participation but also to intervene directly in setting up frames for the resolution of conflicts within national frontiers.
Wherever in the Western European countries there has been enterprise-level collective bargaining—again, a generalization which may be simplistic—it seems to have prevented worker participation from coming about in institutional frames. It seems, therefore, that emergencies and wars create a climate for direct state intervention. And this is of some significance to us in the Third World.
In the Third World countries, the pressure to maximize the effective management of natural resources has led the state to enact laws and so institutionalize worker participation frames. This has impelled many state authorities to set up institutional frames of worker participation. But, in contrast to the developed countries of Western Europe, industrialization is at a very early stage. And at the simple levels of economic activity, the power relation, which is the employment relation, is weighted in favor of the employer.
In the developing Third World, therefore, one sees an apparent conflict. On the one hand, the state moves to legislate and introduce schemes of worker participation because of the felt need to manage the economy. But on the other hand, the workers themselves are engaged at relatively simple levels of activity in small organizations, and much of the economy may be characterized as rural. Worker participation frames in the developing Third World then become relevant only to a small minority of workers. And even there, there may be wide gaps between theory and practice. Moreover, the lower levels of industrialization mean that trade unions had not developed into strong power centers.
In the Eastern European countries, the essential feature is a centralized planned economy. The employment relation, related as it is to economic activity, must necessarily be considered in the context of the sort of economy in the particular country. In a centralized planned economy, collective bargaining can have very little place because prices are fixed, prices are planned, and wages, too, must be planned. Therefore, one may get a situation where trade unions and employer organizations may have to participate in the planning process. Worker participation, however, is unnatural in a centrally planned economy.
It is in this context that many Eastern European countries have legislated institutional frames of worker participation. But conflicts can and do arise. Poland presents a good example of conflicts arising between the institutional frames and informal worker organizations.
I will end these comments by saying this: In any comparative study in relation to worker participation, there are two matters which may be usefully explored. One is the broad general trend which seems to cut across national frontiers. Is there a reason for it? If there is a broad general trend, it must be a function of factors which cut across national frontiers. The other question is whether the differences are attributable to the strengths of each of the power centers in relation to the employment contract—that is, the employer, the employee, the trade union organizations, the state, the national trade centers, and so on.
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*Nadesan Satyendra, text of Comments on General Report by Professor Merryfield on Worker Participation within Undertakings at the 10th International Congress on Labour Law & Social Security, Washington DC USA, 7-10 September 1982