ESRC Regulation Seminar

1. Tony Dobbins (Bangor University),
ESRC regulation & the firm seminar,
Newcastle Business School, June 5th
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2. Outline
1. The EU Information & Consultation of Employees
Directive in two LMEs
2. Applying the Prisoners Dilemma concept
3. Methods
4. Some case findings
5. Conclusion/implications
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3. EU Information & Consultation of
Employees (ICE) Directive 2002
• UK & Rep. Ireland only EU states without statutory ICE rights;
• EU ICE Directive regulates for employee I&C rights:
business's economic situation; employment threats; decisions likely to
lead to changes in work organisation/contractual arrangements;
applies to workplaces with 50 or > employees;
emphasizes employee representative rights.
Spirit of Directive: promote high trust mutual gains dialogue;
But Directive gave countries scope to introduce different local
ICE Regulations to reflect national IR context:
UK & RoI transposed ‘light touch’ regulations to preserve
voluntarism/employer choice: neo-liberal path dependency.
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4. Use of FoI to illustrate employer lobbying/collusion
with government to dilute impact of Directive in LME
(ROI)…

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6. ‘Prisoner’s Dilemma’ & ICE in liberal
economies
Argument: ICE Regulations ineffective in LMEs: generate
‘mutual losses’ for employers + workers, or employer
gains;
 Why? ‘prisoner’s dilemma’ (Leibenstein, 1982):
PD problem with employee voice in voluntarist capitalist contexts
Mutual distrust that other party will pursue individual self-interest
PD is zero-sum game (one parties’ gain = other parties’ loss)
Institutions matter for PD and regulating ICE:
LMEs: voluntary market-driven = sub-optimal non-cooperative PD;
CMEs: ‘beneficial constraints’ ‘shock’ parties into cooperative
ICE/mutual gains
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7. Employer: Golden
Rule
Employer: Individual
Maximization
Worker:
Golden Rule
Box 1:
Mutual gains
cooperation.
Win (E) Win (W)
Box 2:
Non-cooperation -
gains for employer,
workers lose.
Win (E) Lose (W)
Worker:
Individual
Maximization
Box 3:
Non-cooperation -
gains for workers,
employers lose.
Win (W) Lose (E)
Box 4:
Non-cooperation -
Mutual losses for all
(prisoner’s dilemma).
Lose (E) Lose (W)
Prisoner’s Dilemma & ICE outcomes
Source: adapted from Leibenstein (1982:93).
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8. 8
Company Sector Organization
Context
I&C Structures History of
Unionisation
Brit Co Services UK parent
acquired
company in
Republic and
merged with NI
to form one all-
island entity in
2003. Employs
3000.
NER I&C Forum
set up in
Republic in 2005
in response to
ICE Regulations.
Union I&C
Forum in NI.
Non-union in
Republic; union
recognition
campaign
resisted by
management.
Unionized in
NI.
Manufacture
Co
Manufacture Family-owned
firm in Northern
Ireland. Employs
300.
Employee
Forum set up in
2005 in
response to ICE
Regs and
Investors in
People advice.
Non-union
company;
union
recognition
campaign
unsuccessful.
Retail Co Retail British-owned
retail
multinational; 19
outlets across NI
& Republic.
Employs 1500.
Multi-level voice.
NER forum
reconfigured in
response to ICE
Regs to provide
formal, elected
representation
Non-union in
ROI and NI.
Union
avoidance.
Book Co Retail Irish-owned
retailer.
Employs 1800
on island of
Traditional union
information and
consultation.
Highly
unionized.
METHODS: 4 x cross-border case studies in RoI/NI:
N interview respondents = 87

9. Empirical findings – overall summary
ICE Regs did not promote robust mutual gains in our 4 cases;
Rare short-lived examples of mutual gain (operational issues), but not
enduring consultation over ‘strategic’ issues;
ICE Regs encourage weak (shallow) I&C for workers/representatives:
 Mainly information-sharing, robust active consultation rare
 I&C lacked institutional independence from management
 Representatives had insufficient expertise to invoke I&C rights
 Union I&C more robust than non-union I&C
 Outcome = workers often dissatisfied with voice, withdraw, silence.
‘Mutual losses’ or employer gains more common than mutual
gains because voice non-cooperative/PD (Box’s 4 + 2 of Table)
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10. Empirical examples from cases
BritCo: Established NER Forum (Vocal) in response to ICE Regs. But:
 Mgt admit Forum = “tick box exercise”;
 Short spell of limited mutual gains (redundancy pay);
 Mostly Mgt response to union organising drive than ICE Regs themselves;
Manufacture Co: Mgt described NER as “a communications forum”
for resolving grievances, rather than consultation
Book Co: Mgt & union wanted nothing to do with ICE Regs. No
consultation when introducing new technology caused chaos
RetailCo: Multi-level I&C Forums (‘Bottom-Up’) to comply with ICE
Regs. But:
 Management controlled information forums to purposely ‘avoid’
unionisation;
 Employees bypassed voice forums to raise grievances with line
mgrs/external institutions (HSA)
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11. Conclusions
Institutional design matters: mutual losses is not an accident;
ICE Regulations badly designed in liberal (voluntarist) economies =
sub-optimal non-cooperative voice outcomes = PD;
‘Efficiency, equity, voice’ (Budd, 2004): efficiency dominates agenda;
ICE Regulations DO NOT REDISTRIBUTE POWER to embed
enduring consultative mutual gains as intended by Directive;
Why? More than just minimalist Regs. The state and employers active
agents colluding/controlling distributive power resources for I&C;
(Partial) solution? ICE Directive/Regulations require reform to compel
more equal power-sharing in LMEs (‘beneficial constraints’);
Shift in political & managerial view needed: pluralist voice is good IR
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