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Both HRD and strategy consultants can render an invaluable service to their clients by helping them to understand and implement the learning organization concept. It is important to see that it is not a definitive and closed model which a company would have to adopt or reject in its totality. It is a philosophy, an approach to strategy, customers, people management and learning. It can be applied at various levels of sophistication. It is therefore fully accessible to companies that are not sector leaders, to small companies and even to organizations in difficulties. It may well prove to be a more effective way of getting out of difficulties than various restructuring schemes in which individual and organizational learning are underestimated.

The learning organization concept has much in common with knowledge management – another recent concept aiming to help companies to develop, apply, utilize and maintain the knowledge required by their business (see Chapter 19).

18.7 Labour–management relations

Consultants, in whatever area of management consulting, must always bear in mind that their recommendations can have implications for the labour– management relations of the enterprise or industry with which they are concerned. For example, a consultant developing and recommending new remuneration schemes must be aware of possible collectively bargained obligations in the pay area that cannot be avoided without further negotiations with the trade union or other workers’ representatives (e.g. works councils provided for by statute and with powers in this sphere). Similarly, changes in work organization suggested by a production management consultant may have to be negotiated with the trade union because of collective agreements or, in a number of countries, under legislative requirements. In virtually every area of management, consultants must ascertain the implications for labour– management relations of various courses of action that they are considering for recommendation to their clients. Beyond that, a good case can be made, in certain circumstances, for using the existing processes and institutions of labour–management relations (e.g. consultation and negotiation), and perhaps even inciting the development of new processes and institutions, in mapping out strategies for change.

This being said, there are circumstances in which, and subjects on which, it would be inappropriate, given the labour–management relations system or traditions of the country, industry or enterprise concerned, to consult – much less negotiate – with trade unions or other workers’ representatives. There are still some issues that are considered exclusively the prerogative of management. These vary from country to country and even from situation to situation. They are issues in respect of which, for various reasons, workers’ representatives have no need to be involved; indeed, informing them prematurely could be deleterious to the effective functioning of the enterprise. A thoroughly

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professional consultant will know, or find out, how to distinguish between situations where prior consultation or provision of information on change is necessary, helpful or appropriate, and those where it is not.

The contexts of consultancies on labour–management relations

The experienced consultant on personnel management/human resource management/ labour–management relations should be aware of the various legal obligations and constraints in the country or region in which he or she is principally operating. However, given the globalization of business and of the consultancy profession, consultants may well have to become acquainted with the law and practice of industrial relations in countries other than their own. In addition, the increasingly numerous regulations and directives in the labour– management relations field issued by regional groupings, such as the European Union (EU), must be taken into account.

In all cases, regardless of the setting, the cultural context of labour–manage- ment relations must be given its due if the consultancy is to be successful. Advice on labour–management relations that would be highly pertinent in Western countries could be inappropriate in an Asian setting. For example, there is some doubt whether a North American or European style grievance procedure could be effective without substantial adaptation in certain Asian countries where interpersonal confrontation on an individual level is simply not countenanced. These cultural issues and their implications for labour–management relations may not always be easy for a non-native consultant to appreciate and incorporate into his or her recommendations, but an effort must be made to understand them and take them into account.

The remainder of this section examines various points relevant to a labour– management relations consultancy. However, it should be noted that, while technical advice in this field may be provided by those who are highly specialized in labour–management relations proper, consultants in personnel and human resource management often possess or develop the necessary expertise, and are called upon to advise in this area.

Timing and the threshold question

The consultant may be called in because problems already exist in labour– management relations, because there are internal or external forces that are likely to lead to problems, or because advice is needed on formulating or refashioning labour–management relations policies. The reform or refashioning of such policies is particularly pertinent when industries and organizations are concerned with restructuring. Whether brought about through managerial initiative or through consultation or negotiation with workers’ representatives, measures associated with restructuring, such as retrenchment, flattening out of management, changes in work organization and the like, can have enormous implications for both the climate and practice of labour–management relations in the organization.

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In virtually every case in which a labour–management relations consultant is called in, a key question will be the presence or absence of workers’ representatives, in particular of a trade union in or for the organization. Where a trade union or other form of workers’ representation exists, the nature and potential role of that representation must be clarified. Once it is determined that there should or could be a role for workers’ representation in the consultant’s project, the consultant must try to understand (in the case of a trade union) the representativeness of that union, the nature of the leadership of the workers’ representation body, and the internal politics and power centres within it. Only then is it possible to pursue effective and constructive contacts with that body.

In many countries, especially in the developed world, collective bargaining and labour relations with trade unions are coming under pressure from an increasing individualization of the employment relationship. Not only are people less likely to join trade unions, but many organizations are now actively developing more personal and less collective ways of dealing with their employees – varying pay within a group, individual performance appraisal, personal letters to employees, and even individual negotiation of pay and conditions. This should however not be exaggerated: the evidence from Europe is that employers are likely to be developing individualization of employee contacts whilst retaining a commitment to good relations with the trade unions. Neither should individualization be overlooked. Consultants may well be asked to become involved in individualization projects either implicitly or explicitly as part of a policy aimed at weakening the union’s influence.

Consultants should be able to help the client explore the advantages and disadvantages of both collective bargaining and collective relations on the one hand, and individualization on the other. A key criterion is that the organization has a well-thought-through, coherent and consistent approach to these issues: a good consultant will help the client to develop such an approach.

Principal areas of labour–management relations consulting

The essential questions in labour–management relations with which the consultant may be called upon to deal could include one or more of the following:

(1) Workers’ representation. Advice on dealing with workers’ representatives on a day-to-day basis is often an element of a consultancy. As mentioned, these may be (a) trade union representatives from within or outside the organization (including officers or staff of union federations with a unit within the organization), or (b) workers’ representatives provided for in legislation or, infrequently, through general procedural collective agreements, and who are elected by all the employees of the organization. The latter generally have no direct or organic links with a union and are not subject to union discipline, but often have strong unofficial links with a union. Both types of workers’ representation may coexist in the same organization (or branch, if the scope of the consultancy is wider than, for example, a single enterprise). In such cases

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the consultant must exercise great care in determining which – if any – matters are appropriate for interaction with one or the other type of workers’ representation. This is not always easy, as the relative competence of the two types may not be clearly delineated and there may even be jurisdictional struggles between the two. It might also be noted at this point that, adding to the complexity of the question, workers’ representatives are in one way or another becoming increasingly involved in the labour problems flowing from restructuring of organizations; and such restructuring can be a very conspicuous aspect of management consulting. Finally, in recent years there has been a diminution of trade union militancy in a number of countries (but certainly not all) and consultants may wish to consider this aspect when framing their advice.

(2)Disputes and grievances. A consultant may be requested to address the mechanics of handling workers’ grievances, including advice on the setting up of grievance procedures or other conflict resolution procedures. In this area the consultant may have to consider the scope of the procedure proposed (or proposed to be negotiated with workers’ representatives). Should the grievance procedure, for example, be all-encompassing or restricted to alleged treatment inconsistent with an existing agreement or with the provisions of works rules? What of the protection of certain managerial prerogatives that might be called into question by a conflict resolution procedure? And what should be the client’s position with regard to the possibility of agreed arbitration procedures for unresolved grievances or in the case of impasses in collective bargaining? In this regard, increasing attention is being paid in certain countries to the possibility of using different forms of alternative dispute resolution through either agreed or unilaterally initiated procedures. These are but a few examples of issues that could be evoked

–or that the consultant may wish to evoke – in this area.

(3)Collective bargaining. The significance of collective bargaining will depend to some extent on the level at which it takes place – for the industry as a whole, for the industry in a particular region or locality, for a group of enterprises, or at the enterprise or work-site level. In most cases where there is a form of workers’ representation at the enterprise or workplace some bargaining will take place at that level. If this is the level at which the consultancy arises, then bargaining becomes crucial. The consultant may be called upon to carry out one or more of three functions in this regard: to develop the skills of the managers concerned with bargaining; to participate as a member of the employer’s bargaining team; and to act as management’s spokesperson in negotiations. In all cases, the organization’s permanent management team has to take ultimate responsibility.

Given the trend towards decentralization of industrial relations and collective bargaining in many countries where the focus of bargaining has traditionally been at higher levels, this function of consultants is receiving increasing emphasis. Collective bargaining on issues such as the introduction of new technology and increased labour flexibility (particularly in terms of

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workforce size, remuneration and job content) normally takes place at the enterprise level. But even if, for example, collective bargaining is centred at the industry or branch level, the consultant may still have to advise the employer or the employer’s bargaining team on certain matters, as an input to the formulation of bargaining positions and strategy by the employers’ association.

(4)Management–worker consultation and cooperation. A consultant may be called upon to advise on machinery and procedures for management–worker consultation and cooperation on matters of common interest, such as productivity or welfare and recreational facilities (as opposed to issues of an adversarial nature, such as grievances or bargaining demands). New emphasis on this area is reflected in various individual and group employee incentive schemes, as well as in different types of quality management group programmes. Indeed, legislation or higher-level collective agreements increasingly call for or encourage the development of machinery for greater consultation and cooperation, and even mechanisms for workers’ participation in managerial decision-making (co-determination) in certain areas. At the same time care should be exercised by the consultant to ensure that appropriate distinctions are made so as not to subvert the collective bargaining process (particularly where legal strictures might exist in this area).

(5)Employers’ position in tripartite consultations. The position to be taken by employers’ associations in tripartite (government/employers/trade unions) or bipartite (either with governments or trade unions) consultations at the national and, sometimes, branch levels can be defined with a consultant’s help. Such consultative mechanisms, sometimes ad hoc but more frequently of a standing nature, exist in most countries and deal with broad economic and social questions. With national-level consultations individual employers may require guidance in fashioning their input into their association’s position and strategy. In fact, consultants would do well to impress upon their clients the importance of such input, and participation, since the decisions ultimately emanating from national-level consultations almost always have at least an indirect impact, and sometimes a direct impact, on the fortunes of the enterprise.

(6)Partnership agreements. Increasingly some organizations in various countries are trying to develop a different approach to these issues through working closely with trade unions, but moving away from a confrontational and distributive approach towards one based on partnership. There is still much discussion about whether this is merely a re-labelling of collective bargaining when the union is very weak or whether it is genuinely a new development. There are certainly some cases however where the union and the management have agreed to a new way of working, with open-book management (managment accounts available to the union); commitment to decisions made with no balloting of members; and joint agreement to facilitate change. Consultants are nearly always crucial in the initial process of getting managers and unions to

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understand the challenge such agreements make to their established ways of conducting business and to work through the changes that will be necessary. Such agreements demand honesty from the various sides and that can make the negotiations extremely sensitive; the consultant’s role is to keep everyone on track during difficult sessions and to ensure that the focus remains on the agreement. There is a more extensive role to be played after the agreement has been signed because its success will depend on the agreed changes being accepted by local line managers and union representatives: if they do not change their approaches, the formal agreement will fail.

(7) Dismissal and redundancy. Principles and procedures for dismissal and redundancy (whether within or outside the context of collective bargaining) are often subject to treatment by consultants. Here again the freedom of action of the parties involved may be restricted by legislation or agreed provisions. In most countries there are restrictions on abusive or unjustified dismissals and, perhaps less frequently, arbitrary selection of those to be let go in a redundancy situation. However, within these limitations there are normally details, procedures and criteria to be worked out and the consultant may have to make a contribution on this score.

Trade unions as clients

While typically it is enterprise management that engages the consultant, a development in more recent years has been the provision of labour– management consultancy services to trade unions. There may also be cases where the consultant is engaged jointly by management and the trade union.

An important and developing area of this work involves helping the unions to manage themselves more strategically. In general, the people who manage trade unions had not seen their careers as managing complex, multi-site organizations with, sometimes, extensive cash turnover and large investment. For senior union officers, this is exactly the position they find themselves in – invariably with little training or expertise in the task. Nevertheless, the members expect their representative organization to be as well managed as possible. There is thus a role for consultants in helping senior officials understand their managerial role within the union and in ensuring that the union is strategically well managed.

Importance of the legal framework

In providing advice, an important place must be given to the relevant legal framework of labour–management relations. This framework is different in every country and, at times, in particular industries. In certain countries, for example those in Central and Eastern Europe, legislation is only now settling down from the frequent amendments and modifications of the early and mid 1990s. For these countries, this is a time of discovery and experimentation.

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Similarly, many countries in the developing world, particularly Latin America and Africa, have moved towards political democracy, and this has entailed radical change in labour–management law and practice.

The legal framework might reflect rules on:

–trade union recognition and the employer’s obligation to deal with a given union;

–workers’ representation at the workplace, and the protection (e.g. supplementary protection against dismissal or retrenchment) and facilities (e.g. time off, office space, access to members) that may have to be afforded to trade union and other workers’ representatives;

–forms and substance of workers’ participation in decision-making within the enterprise (e.g. rules concerning works councils and their role, or membership of workers’ representatives on company boards);

–the formation and content of individual contracts of employment, and their relationship to any collective agreements which may be in, or later come into, force;

–legal rules (both legislated and resulting from judicial decisions) concerning termination of employment;

–the situation of public service employees and how labour legislation applies to, or excludes, them.

It is always necessary for consultants to take account of existing legal prescriptions in charting courses of action to be recommended to clients. Moreover, even company rules on conditions of employment promulgated by management (employee handbooks and the like) may have juridical or enforceable status. Whether they do or not, consultants should take them into consideration; they may even wish to suggest changes in such rules. Where particularly complex legal problems arise, or have to be resolved in the course of the consultancy, it may be necessary to have recourse to the services of a qualified lawyer specializing in labour law.

Provisions of collective agreements

The labour–management relations consultant must be fully aware of the relevant provisions of existing collective agreements that apply to the enterprise concerned (whether such agreements are for the industry, the region or the enterprise itself). He or she must also be aware, in certain cases, of possible interpretations of those provisions which may have been made by labour courts, arbitrators or other decision-making bodies. Even past interpretations of collective agreement provisions made by management (and in respect of which the trade union has raised no challenge) might be relevant. If this examination should result in a consultant finding that changes in the collective agreement are warranted or should be sought (and provided that this aspect is not clearly outside the terms of reference), then his or her advice may make due reference to this.

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Custom and usage

Rules resulting from laws and regulations, and from collective agreements, are only two of the significant norms which may have to be considered by the labour–management relations consultant. In virtually all established enterprises, organizations and industries, there will be labour–management customs, usage and practices which often require the same respect and attention that is accorded to official regulations. At times these customs, usage and practices are common to a specific region or locality. Examples are ex gratia payments and bonuses, time off which has been traditionally granted to attend to certain family, personal or religious matters, and so on. It is essential that the consultant is fully aware of – and if necessary actively finds out about – such customs, usage and practices as are relevant to the consultancy. There will, of course, be occasions when certain of them should be dropped or changed. The consultant may well be in a position to influence appropriate changes in established labour–management relations practices, even those that are ingrained in the organization. Indeed, this may be a crucial aspect of the consultant’s assignment. However, the consultant must realize that in embarking on such a course of action, or in making the pertinent recommendations, extreme care should be taken, and consideration given to the possible – and sometimes unforeseen – consequences and implications of breaking with traditional practice.

There might even be legal consequences since, as alluded to above, certain practices may be interpreted as having the status of acquired and enforceable rights.

Interaction with workers’ representatives

It is important that the consultant becomes familiar with the position, outlook and concerns of the trade union or other workers’ representatives who will be involved in any course of action that he or she might recommend, since reactions from the workers’ side can have a significant influence in such recommendations. However, before entering into personal contacts with such representatives, the consultant should, in agreement with the client, consider what contacts would be appropriate before and during the framing of recommendations. Dealings with workers’ representatives, and particularly trade union representatives, can be very delicate, and the consultant should discuss with management just what areas encompassed by the consultancy may be touched on in such contacts.

The consultant also needs to know the limits of his or her authority to commit management should the contacts be of a nature where even tentative commitments may be made or inferred. Among other things, the delicacy of contacts between the consultant and trade union representatives lies in their implications for inter-union and intra-union politics as well as possible leadership competition within unions. If the consultant and the management are

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