Social Partnership and Its Implications for Trade Unions

Introduction

This report attempts to explain what is meant by the term social partnership and to evaluate some of the implications that social partnerships carry for trade unions. Social partnerships have been elevated to serve as the foundation of industrial relations policies in many countries. Industrialized nations operating within highly global, competitive, and technologically advanced economies face entirely new social demands and issues. Labor parties and management teams today have come to recognize that if there are going to be economic success stories in the future, both sides must place emphasis on the importance of partnerships in the workplace. These partnerships entail new methods for problem solving, quality control, and productivity.

Today, both sides must understand that partnership agreements will help produce more socially adept workers who are well trained, prepared, and competitive. Labor and management must arrive at a social understanding — and ultimately a full agreement — that will strengthen both corporate and social policies, enabling these new workplace partners to address inherent labor-related problems.

Trade unions still provide a voice for the overall organizational workforce, but they have certainly been weakened in recent decades. As Towers (1997) notes, "Estimating the impact of union presence on profitability is partly handicapped by differences in measuring profits. Yet, however measured, the bulk of the research suggests a negative effect, although again this effect may be reflected in the positive benefits of higher wages and may be justified on 'distributive justice' arguments" (p. 137). This new orientation toward a more partnership-based approach to employment has provided a fresh opportunity for trade unions to regain some of the political power that has been slowly eroded — through lobbying, legal action, declining membership, and social changes such as globalization and technological advances. While labor and trade unions might at first view social partnerships as straightforward wins, there may be unforeseen concerns for trade union leaders to consider. This report examines the situation from that perspective.

Social Partnership Defined

Since 1794, trade and labor unions have been major contributors to the economic and business successes of industrialized nations around the world. Towers (1997) explains that "explanations of this diverging and converging experience are of course to be found among those factors, and changes in those factors, which impact upon trade unions and their members. The factors, or determinants, are not difficult to identify and useful conclusions are possible through examining the association between individual determinants — or apparently closely related pairs or groups of determinants, such as public policy and legislation — and trade union membership" (p. 77).

The combined strength of a trade union flows from the collective solidarity of its members and carries far-reaching social implications. Regardless of whether a union was built on craft, industrial, or federation foundations, its core objectives have remained constant: the social and economic needs of the members come first. When a trade union is engaged in a tough contract negotiation, it is attempting to create the social conditions that best meet its members' needs. Baccaro et al. (1999) highlight how privatization has reshaped these dynamics: "Most important for public sector industrial relations has been privatization and the restructuring of the public sector. There has been very little explicit derecognition of trade unions in privatized firms, not least because unions tend to be well entrenched with large memberships, though there have been exceptions, such as some of the regional water companies, the electricity supply companies, and British Telecom, primarily through the replacement of collective bargaining by personal contracts among managers" (p. 36).

Today, however, trade unions around the world are facing new pressures as union enrollment continues to decline and fewer industries can report trade union growth. Public opinion of trade unions has suffered as union leaders, politicians, and employers have at times taken advantage of members through dues increases, strikes, and failed negotiations. As Baccaro et al. (1999) observe, "Voluntarism is now effectively dead, as the TUC has endorsed embedding a wide range of individual and collective rights at work in legislation. In part this was driven by external political events. Conservative hostility and Labour coolness forced unions to recognize that they need a protective legal environment that is independent of whichever party is in power" (p. 46).

By the twenty-first century, the social order seemed to no longer regard trade unions as capable of improving their members' lives. Unions found themselves needing to reassess their position or risk eventual irrelevance. Those trade unions that have remained viable have historically committed themselves to social partnership. As Ferner and Hyman (1998) explain, "What the idea of 'social partners' implies… is, first, a societal recognition of the different interests of workers and employers; second, an acceptance — indeed encouragement — of the collective representation of these interests; and third, an aspiration that their organized accommodation may provide an effective basis for the regularization of work and the labor market. Implicit also is the notion that encompassing organizations and centralized regulations are the optimal features of an industrial relations system" (p. xv–xvi).

Globalization and Its Impact on Labor Relations

The global economy has introduced new forms of competition through multinational organizations. It was argued long before the global economy became a reality that trade unions and management each needed to build coalitions — with trade unions leading the way by incorporating external civic groups capable of working alongside both union representatives and management for the betterment of all. This new global threat has awakened both trade unions and the private-sector organizations that were once their antagonists.

Historically, unions and management have had complex relationships — at times very close, at other times worlds apart. Globalization has forced both trade unions and management to link their agendas in an attempt to influence social and political events through a unified front. As Baccaro et al. (1999) note, "Many analysts have depicted labor's problems worldwide as principally the product of 'globalization' against which unions and individual firms can only react" (p. 117). This merged effort is an attempt to secure both business and social success, and its effects on how business and society will look in the future are likely to be far-reaching.

Trade unions and management are each in a position to shape society, though from different starting points. Trade unions aim to better society by protecting their members and, through a unified front, hope to change the business environment with regard to safety, the environment, and other issues inherent to commerce. They also maintain a long-term commitment to altering the legal and political dimensions of society by demanding civil and democratic rights for their members and the ability to accumulate wealth and achieve equality. Management, by contrast, argues that its role in improving society comes through commerce, manufacturing, new technologies, and longer, healthier lives.

With that context established, globalization has become a catalyst for both managerial and trade union leadership to come together in a unified approach. Both sides have gained and suffered from multinational competition, new trade deficits, and the developed world's dependence on fossil fuels. New social partnerships between communities, management, and trade unions have thus become a top priority in order to counter the ever-expanding reach of multinational competition. Because both parties must now work together, any conflict must take into account its effects on the entire social spectrum.

As Boucher and Collins (2003) observe regarding legislative effects: "British legislation regulating trade unions and institutionalizing free collective bargaining fostered a fragmented trade union structure and decentralized local bargaining in both the UK and Ireland." This fragmentation underlines why coordination — both within and between unions and management — has become so critical in a globalized environment.

Conclusion

This report attempted to explain what is meant by the term social partnership and to evaluate the implications of social partnerships for trade unions. Partnerships have become the foundation of industrial relations policies for the industrialized nations. We are currently in a highly global, competitive, and technologically advanced economic situation that has altered the perspectives of both trade unions and management. Labor parties and management teams today have come to understand that economic success requires both sides to work as partners in the workplace — embracing new methods of problem solving, quality management, and productivity improvement. While social partnerships offer trade unions a path to renewed relevance, union leaders must remain vigilant about the tensions and trade-offs that such arrangements inevitably entail.

References

Baccaro, L., et al. (1999). The Brave New World of European Labor: European Trade Unions at the Millennium. Oxford: Berghahn Books.

Boucher, G., & Collins, G. (2003). Having one's cake and being eaten too: Irish neo-liberal corporatism. Review of Social Economy, 61.

Ferner, A., & Hyman, R. (Eds.). (1998). Changing Industrial Relations in Europe. Oxford: Blackwell.

Guest, D. E., & Peccei, R. (2001). Partnership at work: Mutuality and the balance of advantage. British Journal of Industrial Relations, 39(2), 207–236.

Heery, E. (2002). Partnership vs. organizing: Alternative futures for British trade unionism. Industrial Relations Journal, 33(1), 20–35.

Kelly, J. (1996). Union militancy and social partnership. In P. Ackers et al. (Eds.), The New Workplace and Trade Unionism. London: Routledge.

Millward, N., Bryson, A., & Forth, J. (2000). All Change at Work? British Employment Relations 1980–1998, as Portrayed by the Workplace Industrial Relations Survey Series. London: Routledge.

Oxenbridge, S., & Brown, W. (2002). The two faces of partnership: An assessment of partnership and cooperative employer/trade union relationships. Employee Relations, 24(3), 262–276.

Towers, B. (1997). The Representation Gap: Change and Reform in the British and American Workplace. Oxford: Oxford University Press.