Abstract
Law, Corporate Governance and Partnerships at Work is a socio-legal interdisciplinary book exploring the relationship between corporate governance, corporate ownership structures and the management of labour in Australia. This book is concerned with the elements creating and sustaining ‘partnerships at work’, which are defined as the co-operative management modes between business organizations and their employees. The authors adopt a legal analysis approach from a historical perspective and conduct an empirical study of contemporary business management through case studies of 10 companies, a survey of company directors and interviews with institutional investors.
This book has six chapters. In the first two chapters, by comparing institutional arrangements and regulatory styles of the liberal market and co-ordinated market economies, the authors identify Australian regulation style as a ‘hybrid form’, a combination of the Anglo-American liberal regulatory model and the labour protective model. The authors further point out that, from the mid-1980s, through the liberalized legal reform aiming for free labour markets, including legislative reaffirmation of managerial prerogative and deregulation of employment standards, the protective capacity of modern Australian labour law has declined.
The authors present the empirical data in the next two chapters. In Chapter Three, the authors report the findings relating to contemporary business practices, ranging from ownership structure, labour relations and human resource management, to workers’ organizations and trade unions in 10 companies. The selected 10 companies cover the industries of mining, financial services and manufacturing, including small family companies to large international companies. Regarding the research question – whether a more market-oriented, shareholder-oriented form of corporate governance has negative influences on employees – the data from case studies provide different answers. In two companies (a finance company and a service company) which have shifted from government to privately owned, it is demonstrated that market-oriented change of corporate governance brings a direct negative impact on employees and trade unions. Conversely, in a privately owned biological technology company and another finance company, increased shareholder orientation appears to have little impact on corporate governance and workers’ interests. In relation to the consequences of the deregulation of labour standards, the data from seven selected companies indicate that a non-union or a weakened union climate has become pervasive in the shareholder-oriented business environment and flexible and casual employment forms have increased significantly.
In Chapter Four, according to the results of the survey the research shows that greater priority is given by directors to shareholders than to employees. Regarding ‘partnerships at work’, the core concern in this research, the survey data shows that the idea of ‘partnership’ relations between companies and employees has an influence on directors, with about 77 per cent of directors confirming the relationship between the company and employees as a kind of partnership. However, on the other hand, the authors find it very difficult to identify any actual ‘partnership-style’ relations within the selected companies. The survey data also show that neither labour nor corporate laws are regarded as a source of obligation to consider employees’ welfare by the majority of directors and they are most likely to hold the opinion that ‘my responsibilities to employees derive primarily from their importance to ensuring the success of the business’ (p. 136). This account indicates that for company directors, profit outweighs both legal obligations and employees’ interests.
Chapter Five provides a further analysis and discussion to explain the relationship between law, corporate ownership structure, corporate governance and labour management. Current Australian corporate law encourages company ownership structures to become more market-oriented, which leads the corporate governance to be mainly concerned with shareholders’ interests. In this situation, employment relations appear to be less standardized and employment protections become weaker. In addition, the employment law system removed the legislative support for collective determination of wages and other working conditions between 1996 and 2007, which has weakened unions’ power. As a consequence, the power of workers and unions from the 1990s to the 2000s has been significantly reduced. In conclusion, ‘partnership-style’ employment relations are difficult to sustain when companies’ management strategies ignore employees’ interests and unions’ power is significantly reduced.
This book provides rich material regarding the interaction between law, corporate governance and labour management. This study is grounded in commercial reality and uses empirical research methods to examine the influence of law on corporate governance and industrial relations, which is a methodological innovation for business and labour law studies. This book would also provide good references for other social science researchers to understand companies’ behaviours and industrial relations under the influences of neo-liberal legal reform.