Suppose Australia Copied US Employee Relations Practices

Abstract

As Australia debates possible changes in its labour law, I am told that there are those who argue it should copy elements of the American system. How weird! While I love my country, I never thought of it as a model of good labour relations. But based on the assumption that American experience has some relevance, this paper consists of three parts. The first describes recent developments in American employee relations (not just union-management relations) broadly conceived. After all, if you want to copy US practices you should know what they are. Next I discuss one major but perhaps insufficiently recognized difference between our countries' labour relations: we are more legalistic. My final section comments specifically on some proposed changes in Australian labour law, supposedly suggested by American practice, though this practice may be misunderstood. Recent Developments in US Employee Relations Practice Union Decline Union-management relations are not a major issue in the US, not with overall union density down to 12 per cent and only nine per cent in the private sector. True, some unions have developed innovative organizing techniques and there have been notable organizing triumphs in some low-wage industries, such as hotels and janitor service, that are heavily populated by recent immigrants. But these gains have been counterbalanced by overall loss of membership and substantial wage cuts caused by concession bargaining in industries such as steel, autos, and airlines. Few workplaces that are already unionized have gone non-union, but many have downsized or gone out of business altogether, in many cases shipping their work overseas. But neither have many new workplaces gone union. The union problem has been inability to organize the non-union workplace. Few nonunion employers face a realistic union threat and those who do have a well-stocked larder of well-honed methods to keep themselves union-free. Many of these methods are technically illegal but the penalties for violating the law are almost laughably weak. If the employer loses after a long, drawn-out legal procedure, it must post a notice saying it won't violate the law again and, if an employee is found to have been discharged because of legal union activity, he or she must be reimbursed for back pay lost. These are hardly strong deterrents. The public sector situation is very different. While private sector density dropped from roughly 40 per cent in the 1950s to nine per cent today, density in the public sector jumped from very roughly 10 per cent in the 1950s to 36 per cent today. Why? Changes in the law (chiefly at the state level) legitimated union representation and collective bargaining; further, few public sector employers use the union prevention techniques so common in the private sector. If they did, they might be subject to political retribution. Most public employees can strike. They can also vote. From Employees as Assets to Employees as Costs 'High commitment management' (also called 'employee involvement' among other names) was the reigning fad among 'progressive' firms circa 1990. IBM and other icons of the period, for example, proudly offered their employees lifetime employment. Forms of worker participation were common, such as job enrichment, quality circles, and work teams. Jobs were broadly defined so as to give employees greater autonomy. Efforts were made to reduce obvious status differences, for example by calling workers 'associates' and managers 'team leaders'. A heavy stress was placed on training and indoctrination, including ceremonies designed to deepen employees' identification with their employer. Much of this involved emulating Japanese practices, seen at the time as more productive than those of American firms. Few companies carried these policies very far, but they did seem the wave of the future. Many companies bragged about their policies in the ads and annual stockholders' reports. …