The employer's perspective on collective bargaining centralization: an analytical framework

Despite the continuing debates about the performance implications of different degrees of collective bargaining centralization, our understanding of the determinants of bargaining structures is still limited. While recent research has largely focused on macro-level factors, the role of micro-level determinants has still not been systematically scrutinized. This article develops a multi-disciplinary framework for analysing the employer's perspective on collective bargaining centralization and discusses the advantages and disadvantages of different forms and levels of collective bargaining from the perspective of management, the main focus being on the comparison between single-employer and multi-employer collective bargaining. This framework can be used for qualitative and quantitative empirical research as well as for discussions of the costs and benefits of different levels of collective bargaining.     

Adapting to survive: The case of Danish employers' organisations

Scholars often characterise Danish employers' organisations (EOs) as relatively stable, with a continuing role in the coordination of industrial relations and corporatist policymaking. This article shows that, beneath surface stability, Danish EOs have significantly adapted structurally and functionally to survive environmental pressures. However, rather than converging onto a liberal market trajectory, we find that Danish EOs have layered new functions onto traditional collective functions. We also find significant variations in functional adaptation depending on the employer constituencies' exposure to international competition and position in value chains. We argue that these adaptations imply that the provision of collective goods, especially in collective bargaining, is no longer sufficient for the survival of EOs.     

‘Unbound’ employers' associations and derogations: erosion and renewal of collective bargaining in the German metalworking industry

Declining union density, the reduction in coverage or informal derogations from collective agreements are signs of erosion of the corporatist German system of collective bargaining. However, new developments can be observed like ‘unbound’ employers' associations or derogations from collective agreements. These new developments make it necessary to reassess the prospects of collective bargaining. At the first sight they seem to be little more than indicators of erosion or exhaustion, but the in‐depth analysis reveals that these developments can be starting points of renewal because they give stimuli to increase the associational power of employers' associations and, even more important for collective bargaining, unions. As a result, however, collective bargaining will become less corporatist in style.     

The effect of strike replacement legislation on employment

Employers and employer groups often argue that restrictions on an employer's ability to use replacement workers during a strike reduce employment. This study analyzes provincial employment-to-population ratios for 1966–1994 and unionized bargaining unit employment growth rates for 1966–1993 to test for an impact of provincial strike replacement policies in Canada. A strike replacement ban that restricts the use of both permanent and temporary replacements is found to have adverse employment consequences. The results for reinstatement rights provisions (effectively banning permanent replacements) and professional strikebreaker bans are mixed.     

Coordinated employer bargaining and globalisation: a study of the men's clothing industry in Quebec, 1974–2012

This article looks at the political economy of employer coordination of collective bargaining in the clothing or apparel manufacturing industry in Canada over three phases of globalisation: from the Multi‐Fiber Agreement in 1974 to the impact of the entry of China in the WTO. Although prevailing accounts emphasise the force of exogenous change and the likely decentralisation of bargaining structures and demise of bargaining coordination by employers, this case highlights how unions and employers sought to preserve their institutional model. We find that actor strategies and their interrelations are a central part of the explanation of this apparent institutional stability, despite the real force of economic, organisational and public policy factors. However, it is a dynamic stability in which change processes, reflecting shifting power relations, are leading to important shifts in the nature of employer coordination.     

The evolution of employers' organisations in the United Kingdom: Extending countervailing power

The concept of countervailing power has been used to suggest that the power of unions explains the origins and development of employers' organisations (EOs). However, unions have declined since the 1970s, but EOs continue to play an important role in employment relations. If pressure from unions is not sufficient to explain continuing employer organisation, what does account for it? This article pursues this question by examining the evolution and activity of UK EOs between the 1960s and 2016. Our countervailing power argument goes beyond a sole focus on unions to include changing pressures and demands on EOs caused by the state such as individual rights legislation and campaigns by civil society organisations. The changing force exerted by these societal pressures helps to explain the shift of EOs' focus from collective bargaining, nowadays only pursued by a minority of EOs, to lobbying, provision of services, legal support, and training.     

When territory matters: Employer associations and changing collective goods strategies

Recent research shows employer associations strategically responding to external challenges, from collective bargaining decentralisation, by altering their offerings of “selective” goods (to directly address threats to membership levels) and of “elective” goods (to revenues). Implicit is that traditional “collective goods” are irrelevant for achieving sustainability. That literature also suggests that territorial associations are more vulnerable than sectoral ones. In this qualitative, longitudinal comparative case study, we explore why and how two territorial associations, the largest each in Italy and Australia, have pursued sustainability by also innovatively enlarging their collective goods activities. This has involved shifting from bargaining leadership to promoting economic dynamism within their territories. Using metaorganisation theory and the resource‐based view, we explain how these associations realised their strategic advantages. Our evidence suggests that innovatively developing new collective goods may be another important way associations can improve their competitive positions.     

The economics of union organization: Efficiency,information and profitability

This article presents a game-theoretical model of union organization that highlights the role played by efficiency and asymmetric information as determinants of unionization and questions commonly-held assumptions about the effect of firm profitability on unionization decisions. In the model, employers set wages taking into account the effect of their choices on workers' incentives to unionize. As a result of employers' strategic wage setting, collective bargaining emerges in equilibrium only if it increases surplus or if there is asymmetric information about the consequences of unionization. While unionization is usually assumed to be more likely in more profitable firms, the model shows that the probability of unionization will be higher in firms with lower rents. It also shows that the union wage premium and unionization will tend to be negatively correlated.     

Small change,big impact? Organisational membership rules and the exit of employers' associations from multiemployer bargaining in Germany

German employers' associations first introduced a so‐called “bargaining‐free” membership (BFM) category in 1990, giving companies the option to join and access services while avoiding the obligations arising to regular members from industry‐level collective agreements with unions. To explain how this phenomenon contributes to change in the German political economy, we investigate why some associations offer their members BFM status whereas others have refused to introduce this option. Controlling for influences such as size and industry, our multivariate analysis of survey data shows that four sets of influences are positively associated with BFM: the role of courts' judicial decisions as “door openers,” structural characteristics of diverging business environments, the evaluation of multiemployer bargaining by the leadership of the association, and the strategic choices of associations.     

Skill gaps in the workplace: measurement,determinants and impacts

Optimal training decisions require employers to have accurate information about their workers’ training needs. However, little is known with regard to the key factors determining the accurate transmission of worker training requirements. Using one of the few linked employer–employee surveys in the world, the 2006 Irish National Employment Survey, this article identifies the key factors determining the correct identification of skill gaps within firms. The impact of skill gaps on average training expenditures and labour costs is also measured. The research finds that both HRM and collective bargaining arrangements are important factors in facilitating the accurate identification of skill gaps within firms. The analysis confirms that skill gaps are a key determinant of training expenditures and tend to raise average labour costs. Finally, the evidence suggests that employee perceptions of skill gaps may be prone to higher levels of subjective bias relative to those based on the employers’ views.     

Recruitment Process Outsourcing and Applicant Reactions: When Does Image Make a Difference?

Many organizations transfer parts of their recruitment process to external service providers—often referred to as recruitment process outsourcing (RPO)—to save costs and enhance the quality of their recruitment procedures. However, contrary to the expectations regarding RPO, Wehner, Giardini, and Kabst (2012) found that RPO might cause negative reactions to recruitment procedures among graduates. We extend that study by incorporating a brand equity perspective in examining whether employer image and service provider image counterbalance negative reactions among graduates. Utilizing a scenario‐based, between‐subject design, we obtain results that show that the extent of RPO negatively influences applicant reactions regardless of the employer's or service provider's image. Furthermore, we find negative mediating effects of RPO on job acceptance intention. However, the perceived fit between employer image and service provider image positively influences applicant reactions. Moreover, employer image positively influences employer attractiveness and service provider image positively influences applicants’ satisfaction with the recruitment process. Thus, a strong employer image and service provider image partially compensate for the negative effects of RPO on applicant reactions. © 2014 Wiley Periodicals, Inc.     

Employer organisations transformed

Employer organisations and the literature examining them have transformed since their inception in the 19th century. We systematically review this literature and the evolving role of employer organisations by focusing on the most cited publications of this body of academic work. This article provides a synopsis of our current understanding of employer organisations, identifies gaps in our knowledge, and develops the following argument. Employer organisations adapted to changing socio‐economic contexts by evolving within and across three roles—as industrial relations actor, political actor, and service provider. Historically, employer organisations were predominantly understood as an industrial relations actor with collective bargaining as their defining activity. However, employer organisations also influenced the political process through lobbying and participating in corporatist arrangements, although more recently their provision of member services has grown in scope and importance.     

Endogenous scope of bargaining in a union–oligopoly model: when will firms and unions bargain over employment?

The scope of firm–union bargaining is shown to be endogenously determined in a union–oligopoly model with decentralized negotiations. If the unions' power is sufficiently high, all bargaining units choose to negotiate over wages alone, i.e., universal right-to-manage bargaining emerges in equilibrium. Otherwise, wage/employment bargaining and right-to-manage bargaining coexist in the same industry. In equilibrium, some firm–union pairs will always choose to bargain over employment as well, since the firms become Stackelberg leaders in the market by committing to a particular output during the negotiations. The firms and their unions both benefit from the additional Stackelberg rents, provided that the unions' power is small enough. Our analysis suggests that there is not necessarily a negative relationship between unions' power and sectoral employment rates.     

Employers' hiring practices,employment protection,and costly search: A vacancy-level analysis

An employer with a vacancy may respond to high search costs by lowering hiring requirements. While such an adjustment increases the employer's chances of filling the vacancy, it also more likely results in a match that terminates when the match is hit by match-specific productivity shocks. Drawing on a novel Slovenian vacancy dataset, we find that employers who are searching to fill temporary positions are more likely to hire underqualified workers when search costs are high. We find that search costs are taken into consideration when employers are searching to fill permanent positions in some specifications but not all. These findings suggest that for employers who are searching to fill a permanent position, the benefits of lowering hiring requirements when search costs are high are likely outweighed by: a) high firing costs if an under-qualified worker is hired on a permanent contract or b) the costs of undertaking a new search later if an under-qualified worker is hired on a temporary contract. These are novel findings about the employers' hiring practices in the presence of employment protection laws and costly search.     

Collective bargaining towards mutual flexibility and security goals in large internationalised companies—why do institutions (still) matter?

This paper examines the potential of collective bargaining to generate mutually advantageous flexibility and security outcomes at firm level. By focusing attention on actors' negotiating capacity at sites in Denmark and Italy of four large chemical-pharmaceutical companies, it provides a nuanced, comparative explanation. The findings demonstrate that, across countries, differences in actors' capacity and negotiated outcomes are attributable to the stability and depth of collective bargaining institutions. Within country differences are accounted for by the organisational resources (internal democracy, external links and pro-activity) of local trade unions, which condition their capacity to induce management to negotiate outcomes which benefit both parties.     

Workplace surveillance,privacy protection,and efficiency wages

Consider an employer who wants her employee to work hard. As is well known from the efficiency wage literature, the employer must pay the (wealth-constrained) employee a positive rent to provide incentives for exerting unobservable effort. Alternatively, the employer could make effort observable by costly workplace surveillance. It is argued that a privacy protection law preventing surveillance may increase the total surplus. While such a law reduces the employer's profit, this loss can be overcompensated by the employee's gain, because the employer invests in surveillance not only to implement higher effort, but also to reduce the employee's rent.     

To merge or not to merge? The impact of union merger decisions on workers' representation in Germany

Union mergers have been widely studied in a variety of countries; however, little is known about their impact on union effectiveness. This article draws on in‐depth interviews with officials and works councillors from four German unions, as well as on a representative survey of German works councils, to analyse how a union's merger status shapes its effectiveness in three spheres of activity: political lobbying, collective bargaining and establishment‐level interest representation. We compare two cases of merger with two cases of continued organisational independence, finding that merger outcomes for individual unions vary considerably across our three union functions.     

Ireland's conundrum on union bargaining rights: assessing the Industrial Relations Amendment Act 2015

Anglophone countries address the question of workplace-level union bargaining rights via the mechanism of statutory recognition. Existing literature has evaluated such regimes as underpinned by several weaknesses. In contrast, Ireland presents an unusual case whereby the question of bargaining rights is resolved via collective dispute resolution procedures combining voluntary and statutory provisions. However, employer challenges and civil court rulings resulted in the weakening of these procedures from a trade union perspective. We assess the latest attempts to reform the Irish provisions via the Industrial Relations (Amendment) Act 2015, evaluating the implications for unions and their capacity to represent members' on pay and working conditions in comparison to Anglophone statutory recognition regimes.     

Collective bargaining in Portugal in the aftermath of the crisis: trends and prospects

This article examines the decline of collective bargaining in Portugal during the recent economic crisis and why, following significant improvements in the economic and political contexts, the number of collective agreements published each year remains lower than before. Drawing on theoretical work on institutional change by Streeck and Thelen (2005) and Baccaro and Howell (2017), it argues that industrial relations institutions in Portugal have been subject to an incremental but transformative process of liberalisation. The analysis of national data and in‐depth interviews with key informants reveals that serial legal amendments since the 1990's weakened unions, converted bargaining into a mechanism to introduce flexibility and wage austerity and reduced incentives for the parties to conclude agreements. While these changes were gradual, their consequences became clear during the crisis. By improving understanding of recent developments in Portuguese collective bargaining, the article enriches knowledge of processes of liberalisation of industrial relations in Europe.     

Employment relations in Central and Eastern Europe in 2002: towards EU accession

The difficult process of bringing CEE institutions and practices into line with those in the existing EU was accelerated at Copenhagen in December 2002 as accession negotiations were concluded. Elsewhere in the CEE, organised labour remained weak under high levels of unemployment and fewer workers entering the labour force as individual employers took advantage of favourable bargaining conditions and the absence of significant multi‐employer bargaining. Unions did, however, retain their political influence as seen in the revisions to Labour Codes in several countries in 2002. They also had expectations of greater post‐accession influence through their incorporation into the EU's social partnership framework.