6.3 Excessive labour power?


Organized labour has exercised greater power in Poland than elsewhere in CEE. This power has been apparent both at the political and the economic level, and during the privatization process it ensured a key place for workers. Employees were given a highly privileged status in ˜privatization by liquidation , whereby the privatization initiative lay with workers councils and the majority of employees became shareholders. Employees also received privileged treatment under the mass privatization programme, with a guaranteed stake in their own enterprises. Meanwhile labour pressure delayed the restructuring and privatization of state enterprises , especially in the steel , coal-mining and railway industries. For example in 1999 trade union pressure secured very favourable treatment for coal miners under the procedures for reducing employment in the industry. Labour also exercised a mighty influence over the development of social welfare and pensions policies, with organized labour remaining strongly committed to maintaining tax- rather than insurance- funded welfare provision. As late as 1999 accusations of ˜unionocracy were specifically associated with claims that the trade unions were dominating government policy on the restructuring of the railways.

On the economic front, strikes and industrial conflict reached greater heights in Poland than elsewhere in CEE, especially in the early 1990s. In the late 1990s Polish wages were higher than anywhere else in the region except Slovenia, despite rising unemployment. For example in 1999 the average monthly wage in Poland was US$459, compared with US$356 in the Czech Republic ( Business Central Europe , February 2000). Enterprise collective agreements were more common in Poland than elsewhere in CEE, reaching 10 900 in 1999 (Kozek, 2000). Despite the unpopularity of institutions closely linked to the communist regime , the socialist trade union movement OPZZ retained a substantial membership.

Yet there were also contrary indications of the strength of organized labour. The level of trade union membership declined, with Solidarity membership dropping from over nine million in the 1980s to 1.2 million by 1999 (Ost, 2001, p. 80). According to a survey by Solidarity, only 17 per cent of workers were members of trade unions in 2000. There was a heavy concentration of membership in the state sector, but even there only 33 per cent of employees belonged to unions. Membership was rare in the private sector (just 8 per cent) and in internationally owned firms (Solidarnosc Newsletter, n.d., 2001). Furthermore almost 75 per cent of workers, including trade union members , thought that the trade unions had proved ineffective in defending workers interests; plant-level research in the electronics industry confirmed the limited influence of trade unions at the enterprise level (Cichomski et al ., 1998); and the Solidarity trade unionists in government failed to use their influence to enhance labour s position. The high degree of industrial conflict over restructuring and privatization indicated that trade unions were on the defensive in respect of state and management strategies for restructuring, not that trade union influence was dominant “ union power always seems greater when management is fearful of opposition and seeks to avoid conflict. Although real wages were higher in Poland than elsewhere in the region, so too was the level of unemployment throughout the 1990s. In 2000 it reached crisis point, with over 17 per cent unemployment. Such trends were hardly evidence of labour s domination of economic policy.

The evidence for union domination of Polish employment relations is thus contradictory, and interpreting the developments involves distinguishing different types of influence and power. Trade union leaders, especially those with a history of involvement in Solidarity, were able to exert considerable influence, based on their reputations and political connections. But the interests and objectives of the union leadership and those of the rank and file members were not always identical. Union leaders had a greater interest in the process of privatization, and in institutional issues such as the role of workers councils at the enterprise level and the development of tripartite arrangements at the national level. The ability of individual union leaders to influence political decision making did not equate with the power of organized labour, which depended on both organizational and economic factors, especially their perceived ability to organize collective mobilization. In the economic circumstances of the early 1990s the collapse of output made such mobilization extremely difficult. However individual employees with scarce skills, such as a knowledge of foreign languages, possessed considerable power in the labour market. On this basis the Western-oriented young Solidarity activists of the 1980s became highly sought-after bankers in the 1990s. In general then, trade union leaders may have significant power whilst organized labour and labour itself is weak. Conversely individual employees may have considerable power because of a scarcity of skills, whilst trade union leaders remain weak.

How justified, then, is the view that trade unions and/or workers strongly influenced on developments in Poland after 1989? Their influence can be judged on two levels. At the political level, to what extent were political institutions under the influence of trade unions and therefore adjusted their policies to meet the objectives of the unions? At the economic level, to what extent did the power of labour exercise a constraint on management?

Labour s objectives fell into three categories: institutional, economic and broadly social. Solidarity s objectives covered the whole range as it was a broadly based social and political movement. The OPZZ formally defined its role in narrower terms, distinguishing between the economic bargaining function of trade unions and the broad political role of the SLD. At the national level the main institutional objective was the effective operation of the Tripartite Commission for Social and Economic Affairs, and at the local level it was the protection of collective bargaining rights.

As mentioned in Section 6.2.2, the position of the Tripartite Commission was reinforced in 2001 after a period of major dispute. Enterprise-level collective bargaining was legally protected in that the Labour Code provided for employer recognition of union representation and the right to conclude collective agreements. The institutional position of trade unions was reinforced in 2000 by provisions that allowed trade unionists to take time off for union duties and required employers to cover the costs of such duties , proportional to the number of union members involved. Employers were also required to deduct union membership dues. The formal institutional position of organized labour was thus strengthened .

Labour also had a major influence on the form and speed of the restructuring and privatization process. Labour s initial objective was to enhance the position of employees, and privatization by liquidation or insider privatization were seen as the best means of maintaining employment levels. While the privatization procedures largely reflected these preferences, labour s influence was not the only reason for the prevalence of liquidation and insider privatization as the interests of labour and management often coincided. Labour s objective with regard to state industries was to maintain the current employment levels as much as possible. The major industries affected were steel, coal and the railways, and in all three sectors the unions slowed the process of restructuring. Employment levels were reduced in all three sectors at a slower rate than the state had wished, and only after serious industrial conflict. However, while labour s objectives were achieved in the short term , international pressure for restructuring, especially the EU s call for reductions in employment in the coal and steel industries and the World Bank s financial incentives for reducing employment, meant that the successes were short-lived.

On economic matters, labour sought to achieve four major objectives: to maintain the minimum wage at no less than 40 per cent of the average wage; to raise the earnings of state employees to match those of employees in the private sector; to improve employment security and reduce unemployment; and to provide effective job protection for workers in the private sector, where working conditions were worse than in the state sector. Labour failed to achieve all four objectives.

On broad political matters organized labour had two major objectives. First, with regard to social welfare the unions opposed the government s proposals in 1996 for the marketization of social welfare, which would involve the introduction of personal insurance arrangements both for pensions and for medical care. Instead the trade unions wished to use funds generated by privatization to fund social welfare provision. Solidarity argued that state assets should be expropriated rather than privatized, that is, transferred free of charge to groups entitled to receive them (Hausner, 2001, p. 224). This accorded with the socialist perspective that, since citizens had been responsible for building up the assets they should receive the benefits from their reassignment. Although Solidarity s view was endorsed in a national referendum, the low turnout caused the results to be disregarded. Labour did manage to achieve a modification of the welfare proposals, but without reducing the government s commitment to a more market-oriented social welfare system.

The second union objective was EU membership, which was strongly supported by the majority of organized labour as it was believed that membership would provide greater economic security. However, in contrast to the situation in Western Europe, Polish employers were hesitant about EU membership as they feared increased competition.

At the sectoral and enterprise levels, the collapse of demand in the early 1990s, rapid inflation and high unemployment inevitably created economic conditions that weakened the trade union movement. In the early 1990s the special relationship between organized labour and political parties partially protected employees in the state sector and in enterprises undergoing privatization. However the unions were not able to protect the jobs of employees in the private and international sectors, where union membership was uncommon. Union recognition was rare in the newly emerging private sector, and even where unions were recognized they were unable to protect workers when companies ran into difficulties “ as happened at Daewoo s motor assembly plant.




Change Management in Transition Economies. Integrating Corporate Strategy, Structure and Culture
Change Management in Transition Economies: Integrating Corporate Strategy, Structure and Culture
ISBN: 1403901635
EAN: 2147483647
Year: 2003
Pages: 121

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