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Labour relations in Europe
Page 87
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IF BRITISH MANAGERS have been obsessed with labour relations problems in recent years, the emerging picture of conditions in Europe, and particularly in the Common Market, suggest that the problems to be faced there are at least as difficult.
Inflation has not been controlled in the EEC any more successfully than in Britain. Dutch wages, for example, more than doubled from 1962-1971. Sweden — outside the market but not unimportant — has been suffering an average inflation rate of 15-18 per cent recently. In Germany, where there are still over half a million job vacancies -shortage of workers, especially skilled workers, makes any effective control of wage rates very difficult.
Scarcity of labour in some EEC countries led to the immigration of foreign labour and to the movement of labour between member countries. Germany has over lm foreign workers, a quarter of them from other EEC countries. France has a million foreign workers. Immense social problems have been caused by the influx of foreign workers.
A number of speakers at a recent conference of the Financial Times: "Setting up a business in the enlarged Community", urged investors to site new companies in areas with labour availability. It was hinted that the trend in future would be for work to be taken to the workers in their home areas since housing, social security provision, etc, defies solution if pools of cheap labour live in virtual ghettoes in industrialized areas.
Fringe benefits The added cost of fringe benefits to wages in the EEC is vastly greater than in Britain. In 1968 the cost of benefits additional to wage costs in the UK was 22.2 per cent, compared with 44.5 per cent in Germany and 91.9 per cent in Italy.
Fringe benefits are said to be running at the rate of 101-108 per cent in Italy at present and in the Netherlands a current estimate is 52 per cent.
Holidays in the EEC average 30 days per worker after five years' service — and there is a strong trend for holidays to be paid at double normal rates. Management salaries are said to be inflating at the rate of 10-12 per cent in EEC countries.
The laws determining worker /management relationships vary widely and in some countries they are complex. In Belgium there are at least 15 laws governing relationships. Belgian employers have to contend with a two-year notice period in dismissals, after a certain length of service has been performed. The alternative — paying out two years' salary — is prohibitively expensive. In Italy recently, three executives got compensation totalling $500,000 when their contracts were ended.
Redundancy pay Some French managers who become redundant may be compensated with from three to five years' pay.
Trade union membership in the EEC — 15 per cent in France and only 33 per cent in Germany — may appear insignificant but over 80 per cent of workers in these countries are affected by union agreements. In Italy union membership is 30 per cent overall, but as much as 70 per cent in the North, and all employees with the exception of company chairmen are said to be covered by Dirigisti agreements.
In Sweden, only very top managers are outside the scope of collective agreements. In Germany, white-collar workers are being organized --a trend noticeable in the UK.
Fewer strikes The participatory role of unions in company management in Germany is seen by many managers as highly bureaucratic and restrictive. I understand that there are no less than 160 pages of regulations! Despite this, or perhaps because of the German structure, the number of strike days is less than a half that experienced in Britain in recent years.
Tax incentives, or tax holidays, to persuade new companies to set up shop in areas of high unemployment in the EEC may need careful consideration in the context of labour relations. There are many parallels to Merseyside in the EEC.
It should be noted that the freedom of labour to move within the Common Market applies primarily to the unskilled. Professional men, doctors, architects, engineers, etc, have yet to agree common internationally agreed standards of competence. British accountants and secretaries, who may be justified in thinking their standards of competence to be superior to that of any EEC country, react with alarm at the idea that lower, European standards will have to be introduced in the UK.
Against this background, which would seem to offer some lush pickings for resourceful British trade union leaders, the reluctance of the Trades Union Congress to participate directly in EEC labour matters is unlikely to continue for much longer. The NUM, nominally opposed to Britain's entry to the Market, has joined in Coal and Steel Community meetings and is holding talks with the German miners' union on the future of the coal industry in EEC.
A number of other British trade unions is known to have made informal contacts with the Brussels Commission, but the TUC's request for observer status at various meetings has been bluntly rejected by the Commission.
Patrick Cheney, a full-time official of the white-collar union APEX, said in a recent article in The Guardian newspaper: "Where the TUC is most guilty of non representation is on the various committees examining tariffs, structure and the future of the many industries in which British trade unionism is at its strongest, eg shipbuilding, chemicals, textiles, aerospace, transport and docks".
Pensions policy The Economic and Social Committee at its June meeting is setting up a policy covering pensions, redundancy pay, vocational training, and industrial injury payments. Although eight employers' representatives from British industry are participating in the work of the Economic and Social Committee, the failure of the TUC to send a delegation is infuriating to European trade union leaders. The Transport and General Workers' Union, whose biennial delegates' meeting is in July, should consider whether by maintaining an official attitude of hostility to the Common Market it is neglecting the real interests of its road transport and docks members.
The precise relationship and significance of the International Labour Office and the European Commission in determining such matters as working conditions, safety provisions, and basic and advanced vocational training in road transport is difficult to assess. The former body, long established, covers the world and like some Common Market agencies, is slow-moving. The subjects mentioned were discussed by the ILO Inland Transport Committee at Geneva last year and a new convention on Hours of Work and Rest Periods (Road Transport) may be promulgated, replacing the 1939 Convention (No 67).
Should a new or revised Convention come into being ratification by a sufficient number of States would — in the view of the International Transport Workers' Federation who were represented on the ILO committee —"have a much more direct effect in bringing about a general improvement in the standards applying throughout the world than would even the most progressive general recommendation by the Inland Transport Committee, which could have no more than moral value since it would not be binding".