Abstract
On the basis of Lijphart’s (1999) two forms of democracy, majoritarian and consensus, this article explores the relevance of a similar two-sided typology of negotiated versus adversarial patterns of social democracy (démocratie sociale) for characterizing industrial relations in European Union countries and understanding the link between these patterns and a country’s social and economic performance. Social democracy (démocratie sociale) is considered as a form of collective action in the field of industrial relations resulting from social and economic citizenship. Seven dimensions are chosen to bring out the overall patterns: welfare state regime, collective actors, collective bargaining, industrial disputes, social and economic arenas and institutions, employee representation, and decision-making processes. With France and the Netherlands being two good examples of the majoritarian and the consensus types of democracy, these countries are chosen to test the relevance of the two patterns of social democracy (démocratie sociale). The two countries clearly illustrate the two patterns.
According to the European Quality of Life Survey 2012 (Eurofound, 2012a), the perceived tension between management and workers is notably high in France, with the percentage of those seeing a lot of tension amounting to 48 per cent. If we confine our analysis to the EU-15 1 , only Greece shows a higher percentage (59 per cent) of people considering there is ‘a lot of tension’ in this area. As regards the perceived tension between poor and rich people, the French percentage (55 per cent) is even higher than that of Greece (52 per cent). Furthermore, there is a major gap between the French and Greek percentages and those of the other EU-15 countries (Figure 1). The French values for the standardized normal distribution of these questions are the highest of all the questions (1.57, 2.10) of this survey.
‘Lot of tension’ perceived between management and workers.
What is behind these high degrees of tension in France and Greece? Does it reflect a subjective pessimism of the French, is it symptomatic of ‘France’s historical penchant for insurgency’ 2 , or is it indicative of an important feature of French social relations? Our hypothesis is that the high level of tension between management and employees reflects a pattern of French industrial relations going not only beyond forms of trade unionism and France’s alleged ‘leftist-driven insurrectional tradition’ 3 , but also beyond labour market regulation and the low level of corporatism in France. The tensions echo what Arend Lijphart (2014) calls the ‘competitive and adversarial’ characteristics of the majoritarian form of democracy, as opposed to the ‘negotiation and compromise’ features of the consensus model.
This article explores the relevance of a similar two-sided typology of adversarial versus negotiated patterns of social democracy (‘démocratie sociale’) for characterizing industrial relations in the European Union countries and understanding the link between these patterns and social and economic performances. As France and the Netherlands are two good examples of the majoritarian versus consensus types of democracy, these countries are chosen to test the relevance of the two patterns of social democracy.
Patterns of social democracy (‘démocratie sociale’)
Arend Lijphart describes the difference between majoritarian and consensus democracy ‘in broad terms as the difference between the concentration of power in the hands of a narrow majority versus the sharing, dispersing, and limiting of power in a variety of ways. A closely related difference is that the majoritarian model of democracy is competitive and adversarial, whereas the consensus model is characterized by negotiation and compromise’ (Lijphart, 2014: 13). Although thoroughly debated, this typology remains very relevant for understanding some major features of democratic political regimes. France and the Netherlands are good examples of majoritarian and consensus democracy respectively. On the basis of some earlier comparative work on France and the Netherlands (Bevort, 2011), the field of industrial relations seems a good illustration of the opposition between an ‘adversarial’ type and a ‘negotiated’ type of ‘social’ democracy. Differences in the industrial relations of these two countries are not fully attributable to different labour market regulations or different degrees of corporatism, but are more related to two distinct forms of collective action, two models of social democracy defined as democracy in the field of industrial relations. Using Lijphart’s (1999) categorization of democracy as a basis, we can discern a similar two-sided pattern of ‘social democracy’ (‘démocratie sociale’).
Democracy and industrial relations
The idea is to focus more on the political dimension, or the dimension of industrial relations power not only as an environment or a context (Dunlop, 1958) or as an arena (Streeck and Hassel, 2003) but as a core feature reflecting wider democratic patterns in the field of industrial relations. This approach aims to frame industrial relations not so much as an economic coordination problem or an economic labour market issue, but as a socio-political coordination problem.
This approach is in line with Alan Siaroff’s proposal for an integration indicator (1999) and Lucio Baccaro’s suggestion that democracy is a mechanism of coordination (2002). After discussing the meaning and measurements of 23 quantitative indicators of corporatism, Siaroff (1999: 189) suggests a further indicator of economic integration, defined as ‘a long-term co-operative pattern of shared economic management involving the social partners and existing at various levels such as plant-level management, sectoral wage bargaining, and joint shaping of national policies in competitiveness related matters (education, social policy)’. According to Siaroff: ‘More generally, integration speaks to the functional roles and behavioural patterns noted in the ideal types of corporatism outlined earlier; however, it does not speak to – nor is it conditional on – structural features (such as the level of unionization) or favourable contexts (such as the size or openness of a country, or the political role of social democracy)’ But as Baccaro (2002) suggests, the degree of ‘shared economic management’ refers not only to economic integration but also to the pattern of democracy.
In his discussion paper ‘What is dead and what is alive in the theory of corporatism’, Baccaro (2002) examines the relation between the structure of interest representation and the ability to engage in national negotiations. He discusses the idea developed in the corporatist literature that a weak and fragmented structure of interest representation does not allow labour movements ‘to hold to their side of the bargain in national negotiations’ (2002: 13–14). According to Baccaro, this literature focuses only on hierarchy as a coordination mechanism, leading to the conclusion that countries where union leaders do not have the capacity to impose a series of outcomes on workers would be unable to engage in national pacts. ‘This literature overlooked the fact that hierarchy is one possible mechanism of coordination, (…) but not the only possible one. Democracy is also a powerful mechanism of coordination and dispute resolution. Compared with hierarchy, democracy also produces legitimacy’. He shows that Italy and Ireland, though having poor corporatist scores, use alternative mechanisms relying on democracy and dialogue to achieve organizational coordination. The relation between negotiated industrial relations and corporatism is not a general rule. This analysis questions the ‘structural isomorphy of the consociational and liberal corporatist pattern’ (Lehmbruch, 1979: 59) and the idea that ‘corporatism can be thought of as a component of a more broadly defined concept of consensus democracy’ (Lijphart and Crepaz, 1991: 245).
The more or less cooperative versus authoritative modes of decision-making are also culturally embedded in the political traditions of collective action. Comparing values, behaviours, institutions and organizations across countries, Hofstede (2001) stresses, among other differences, ‘power distance’, i.e. ‘the degree to which the less powerful members of a society accept and expect that power is distributed unequally’ 4 . A low degree of power distance seems to be synonymous with consultative, democratic processes and the way a society handles inequalities among people.
To conclude this first set of considerations, we formulate two hypotheses: (1) the different levels of tension in France and in the Netherlands are closely related to the pattern of industrial relations; and (2) France is not so much facing an economic problem of (labour market) coordination, or a social (class-struggle-based unionism) problem, but a problem of political coordination reflecting a crisis of its historically authoritative, adversarial political tradition.
Let us now explore the alternative views on labour relations held by Siaroff, Hofstede and Baccaro, highlighting ‘cooperative management patterns’, ‘power distance’ in labour relations and democracy as ‘a powerful mechanism of coordination and dispute resolution’, in order to understand not only the ability to conclude social pacts at aggregated level and among the elites, but also the ability to live and act together in the workplace. While not ignoring the game of conflicting interests, the importance of labour market regulation or the unequal distribution of power in the labour community, we do believe that the democratic dimension in the regulation of labour relations is an important and specific dimension for understanding the different patterns of industrial relations.
‘Social democracy’
In comparing Dutch and French industrial relations, the patterns of industrial relations discussed are viewed using an approach based on social democracy and collective action. Social democracy can be defined as a form of collective action in the field of industrial relations resulting from social and economic citizenship. It manifests itself through institutional design, structural features, individual and collective functional roles and behaviour patterns. As such, it refers to the traditional subjects of industrial relations: the welfare state regime, forms of industrial democracy (trade union rights, employee representation, collective bargaining), bipartite and tripartite social and economic institutions and workplace involvement. This view takes into account Siaroff’s idea of integration and Baccaro’s interest in democracy as ‘a powerful mechanism of coordination’, without however rejecting the structural and contextual features. It assumes that powerful individual and collective actors, participative and deliberative institutions and processes foster collective action.
Addressing social and labour policy regimes defining social and economic rights, social democracy questions the distribution of power at all levels, from the micro workplace to the national level, in its direct as well as representative form. Introducing the idea of social citizenship into the analysis invites us to follow the approach of Prus (1996), viewing industrial relations as more than just a system of interest representation. Under it, we look at the way the distribution of power is organized and experienced, focusing not only on the organization and texture of labour relations but also on processual characteristics, and on the associated meanings and feelings. Social democracy views labour relations as emergent or ongoing social productions or constructions, putting greater emphasis on ‘how human group life is shaped by people as they go about their activities’ (Prus, 1996: 17). It also focuses attention on difference of voice (‘political action par excellence’; Hirschman (1970: 16)) rather than on difference of exit.
Social democracy is an interesting framework for analysing industrial relations issues, as it is not confined to employment relations or to their corporatist dimensions. While these two questions are important, putting them at the centre of the analysis generates bias and neglects social citizenship, power distribution and workplace democracy issues. The focus is not on the monopolistic degree of corporatism, but on cooperation. Inquiry into social democracy does not stop at political exchange but also analyses collective action and social and economic citizenship in the field of industrial relations.
Dimensions and indicators of social democracy
On the basis of this approach, a set of seven specific dimensions has been chosen to highlight the overall social democracy pattern: the welfare state regime, collective actors, collective bargaining, industrial disputes, social and economic arenas and institutions, employee representation, and decision-making processes (Table 1). For each dimension, several mainly quantitative indicators have been chosen, though there are also some qualitative ones. The idea is not to obtain a conclusive overarching measure of social democracy, but to gain an overview of the main dimensions of industrial relations, thereby revealing the dominant pattern. In a first iteration, the following indicators have been chosen.
Dimensions and indicators of social democracy.
The ‘welfare state’ regime indicators rate how social and economic rights 5 are defined and guaranteed. Linked to the idea of social citizenship, these relate to how people are able to participate in society, to live and work together, and to fulfil the basic necessities of life. A welfare state regime expresses a degree of equality and decommodification in accessing basic resources. The indicators refer to social security, unemployment insurance and tax systems. The ‘collective actor’ indicators describe the number and strength of trade unions and employer organizations in the sphere of industrial relations, while the ‘collective bargaining’ indicators concern the coverage, level, most frequent duration and extension procedure of collective agreements. In a similar way, the ‘industrial dispute’ indicators reflect strike levels in the form of the number of working days lost through industrial action per 1000 employees, the legal nature of the right to strike, the legal definition of a strike, and the existence of industrial peace clauses. Social and economic arenas and institutions aim to apprehend the importance of social and economic bipartite or tripartite bodies, not so much as representative institutions of the national IR actors, but as deliberative arenas reflecting and nurturing the public debate on social and labour policies. In each country two institutions have been chosen to analyse their functioning and role in this respect. The ‘employee representation’ indicators describe the different types of employee representation at company level, their modes of operation, their rights and obligations. They also take board-level representation into account. The last dimension, that of decision-making processes, is about the degree to which work is organized on a participative basis. This indicator reflects the ability of employees to participate in work-related decisions as individuals rather than through representatives, measuring their degree of involvement in decisions on work organization and immediate job tasks. Eurofound (2013: 10) refers to these latter two aspects respectively as organizational participation and task discretion. The power distance index as measured by Hofstede will also be used.
The aim is not to produce an overarching measure of social democracy, but to build a matrix capturing the logic and dynamics of the different dimensions involved in industrial relations. For a more in-depth analysis, each dimension should be described in a more detailed manner. This is a first proposal which has to be worked out in greater detail.
Negotiated versus adversarial patterns of social democracy
Each dimension is characterized by the extent to which it is negotiated or adversarial, (potentially) resulting in two main patterns of industrial relations: a negotiated and an adversarial pattern. Table 2 presents an overview of the differences between the two types. Similar to the 10 differences between consensus and majoritarian democracy put forward by Lijphart, these differences are framed ‘in terms of dichotomous contrasts, but they are all variables on which particular countries may be at either end of the continuum or anywhere in between’ (Lijphart, 1999: 3). Although there are some major common characteristics, the typology is not a simple illustration of the two types of democracy in the field of industrial relations. Consensus versus majoritarian democracies are not per se negotiated versus adversarial social democracies. It is also not similar to the corporatist versus pluralist industrial relations patterns, i.e. negotiated social democracy is not necessarily a corporatist feature. Our hypothesis is that these patterns help explain certain major differences between countries in terms of their internal industrial relations. Though these differences may sometimes overlap the distinction between corporatism and pluralism, this is not always and not necessarily the case.
Patterns of social democracy.
Patterns and performances
Espousing Lijphart’s claim that the negotiation type of democracy ‘performs better’ than the adversarial type, each pattern can be expected to produce a different social and economic performance. In our comparison, social and economic performance will be assessed in terms of exposure to physical risks, labour and social tension, the poverty rate, unemployment rate and global competitiveness. Looking specifically at industrial relations, Lawrence and Ishikawa (2005: 3) favour consensus democracy, stating that ‘Constructive negotiations promote fairer economic development through a collaborative effort to increase productivity and enhance conditions of work’. This is also the conclusion of the Eurofound survey on work organization and employee involvement in Europe: ‘Employee involvement (…) leads to a “win–win” situation that is advantageous to both employers and employees’ (Eurofound, 2013: 69). High levels of involvement are associated with opportunities for learning at work, better physical working conditions, psychological well-being, reduced absence, lower levels of staff turnover, better employee motivation and higher productivity.
A comparison of French and Dutch industrial relations
To test the relevance of this approach, the French and Dutch cases are compared in terms of the seven dimensions described above. After providing a brief overview of the historical backgrounds of the two countries, the seven dimensions are compared separately before examining whether the comparison confirms the two patterns.
The history of French and Dutch industrial relations
The present patterns of Dutch and French industrial relations are rooted in two quite different historical backgrounds. As it would be beyond the scope of this paper to develop a detailed social historical comparison of the two countries, we will confine ourselves to addressing three historical turning points explaining some of the major differences.
The year 1906 was a ‘watershed year’, the year in which the Dutch NVV, the Nederlands Verbond van Vakverenigingen (Dutch Association of Trade Unions) was founded, and in which the Charter of Amiens was adopted by the French CGT, the Confédération générale du travail (General Confederation of Labour). While the NVV, for long the main Dutch trade union, chose a reformist orientation in close conjunction with the SDAP, the Dutch socialist party (Windmuller et al., 1987), at its Amiens congress the CGT opted, in a declaration known as the Charter of Amiens, for revolutionary trade unionism and total political independence. The Charter conferred a ‘dual task’ on the CGT: to pursue the daily improvement of workers’ well-being, but also to fight for the expropriation of capital, viewed as the sole means of fully emancipating the workers. This revolutionary trade unionism based on class struggle put industrial action above negotiation and foresaw low union dues. This resulted in a selective recruitment policy giving priority to militants over rank-and-file members. The paths taken by the NVV were quite different. Distancing itself from the influence of socialist and revolutionary ideas, it gave priority to collective agreements and social law over revolutionary action, and built a strong organization benefiting from high union dues.
The way social democracy was designed in the years following the Second World War constitutes a second example of the two distinct approaches. In both countries, major social security bodies were created in these post-war years, but also representative institutions at company level as well as collective bargaining rules and institutions at national level. While social democracy became a key dimension of the Dutch pillar system promoting concertation and social dialogue, the French social democracy institutions hung on to the widely shared belief in class struggle, as evidenced by the strong Communist Party and the idea that neither employees nor their unions had the competence to interfere with the power of the employers. In France, the social peace that had existed in the immediate post-war years for rebuilding the country exploded in 1947–1948, while by contrast the Dutch Labour Foundation and the Economic and Social Council (see below) became central institutions of the Dutch consociational democracy.
The early 1980s, featuring the Auroux Laws in France and the Wassenaar agreement in the Netherlands, provide a third illustration of the differences in the industrial relations systems of the two countries. The Auroux Laws promoting workplace participation and company negotiation were imposed by the socialist government to improve French industrial democracy despite the opposition of the employer organizations, whereas the Wassenaar Agreement was signed in 1982 by the Dutch social partners to avoid government intrusion in their fields of competence. The Wassenaar Agreement was also a way of managing the crisis of the early 1980s, whereas in France the policy of rigour would become the sole responsibility of the government in 1983.
The respective welfare state regimes and industrial relations features bear witness to these legacies. The ways the social partners define social democracy and conduct social and economic reforms remain very different. While the Dutch give precedence to the idea of joint regulation, the French unions and employer organizations reject any such idea for different reasons, resulting in a division of tasks giving the trade unions only social and consultation power and leaving economic power in the hands of the employers, under the supervision of the state as the ‘instituteur du social’ (Rosanvallon, 1990).
In the 1960s and 1970s the Dutch and French welfare systems – although very different – could both be viewed as quite generous. However, after three decades of cutting back benefits and restricting access conditions, the comparison now shows significant differences in terms of economic inequalities and social rights in line with Esping-Andersen’s typology (1990) (Table 3). While France has a clear-cut form of insurance regime, the Netherlands are close to the universal standards. Our comparison highlights this discrepancy. After taxes and transfers the degree of income inequality narrows, but other figures show that the choices are not the same. The difference between minimum social benefits is high, with the Dutch minimum from 27 to 43 per cent higher than the French RSA (Revenu de Solidarité Active). Similarly, even if the minimum old-age pension in France and its Dutch equivalent, the AOW, Algemene Ouderdoms[verzekerings]wet (general law on old-age [insurance]) are not identical, they both reflect the minimum standard of living in both countries for persons aged 65 and over. The Dutch minimum old-age pension (which is essentially equivalent to a basic retirement pension for all persons having resided in the Netherlands since the age of 15) is 30 per cent higher than its French equivalent. However, when comparing caps on unemployment benefits, the situation changes. While unemployment compensation is capped at €7128 per month in France, the equivalent figure in the Netherlands is €3051. In this instance it is the French figure which seems unusual, since the Dutch figure is similar to that of most other European countries. The French situation is of course an advantage for senior executives. A similar difference can be observed when looking at statutory and contractual redundancy packages. In France these are usually calculated on the basis of employment duration with one month’s salary paid for each year of employment, whereas in the Netherlands a decision was taken to limit redundancy pay-outs for those with an annual income exceeding €75,000 to a maximum of one year’s salary.
Welfare state regime.
a OECD-stat (2012).
c UNEDIC.
Collective actors
Even though the Netherlands do not enjoy high union density, the level is still three times higher than that of France. By contrast, the ratio of the number of trade unions is the other way round (Table 4). The difference is not so striking for employer organizations, but while more than half of Dutch companies belong to an employer organization, the proportion is only a third in France. Despite the steady decline of Dutch union membership and the crisis the biggest Dutch trade union, FNV, went through in 2011–2013, French collective actors remain much weaker than their Dutch counterparts. The French 2008 representativeness reform was meant to change the trade union situation in France. According to the law n° 2008-789 on ‘social democracy and working time reform’ a trade union needs to win at least 10 per cent of the votes at workplace level, and 8 per cent at sector level to be considered representative and therefore able to participate in collective bargaining. As a matter of fact, the first four-year round of professional elections, referring to all kinds of workplace elections, did not produce any big changes in the trade union landscape.
Collective actors.
a OECD.
b 3rd Company survey, Eurofound (2013).
Collective bargaining
The figures (see Tables 5 and 6) suggest that there is more collective bargaining and strikes in France, despite the lower union density. However, collective bargaining coverage, which shows that almost all French workers are covered by a collective agreement, is misleading. A closer look at the contents of collective labour agreements shows that the Dutch collective labour agreements provide for minimum salaries generally higher than the minimum wage, whereas in France a quarter of minimum salaries in collective labour agreement pay scales fall below the minimum wage. Each spring and autumn in the Netherlands, negotiations over such collective agreements punctuate social life, whereas in France the results of collective agreement (re)negotiations rarely even make it into the press. Another interesting difference regards the duration of collective agreements. They are generally indefinite in France, while the Dutch agreements are most often limited to one or two years. This explains why the content of many French collective agreements can be rather out-of-date.
Collective bargaining.
a ICTWSS database.
Industrial disputes.
Industrial disputes
As one would expect, there are fewer strikes in the Netherlands than in France, which could be interpreted as suggestive of more aggressive unions and workforces in France. If this is the case, previous indicators however also draw attention to the relative failure of such moves. Figures suggest another hypothesis concerning the relationship between strikes and negotiations: the Dutch go on strike after negotiations have failed, while the French strike to put forward their demands and compel employers to open negotiations.
In France, the constitutional nature of the right to strike, the lack of legal interpretation of this constitutional right and the absence of a legal definition of what constitutes a strike are key elements of labour relations. Consequently courts and case-law play a fundamental role in regulating industrial disputes. The absence of any obligation to maintain industrial peace is another important feature of industrial relations (Carta et al., 2008: 27–52).
In the Netherlands (Rook et al., 2008: 80–96), the right to strike is not enshrined in the constitution but is a matter of case-law based on Article 6(4) of the European Social Charter. ‘According to the Supreme Court in its landmark ruling in the NS case, strikes are illegal when major procedural rules have been disregarded. This includes cases in which a strike is organized before any substantial bargaining has taken place, no minimum safety precautions have been taken or the strike conflicts with a no-strike obligation contained in the collective agreement’ (Rook et al., 2008: 90). There is no legal obligation to maintain industrial peace, though collective agreements often contain no-strike clauses or peace obligations.
Social and economic arenas and institutions
Comparing the way bipartite or tripartite institutions act as deliberative arenas nurturing the public debate on social and labour policies and participating in the development of social and economic policies, two pairs of institutions will be examined: (a) the Dutch ‘Stichting van de Arbeid’ (Labour Foundation) and the French CNNC (Commission Nationale de la Négociation collective – National Commission on Collective Bargaining) – despite the fact that the two institutions do not have exactly the same role; and (b) the social and economic councils that exist in both countries (Table 7).
Social and economic arenas and institutions.
There is no French equivalent to the Dutch Labour Foundation, an autonomous joint institution with strong powers to influence both the issues and procedures relevant to work relations and playing a pivotal role in Dutch industrial relations. The closest equivalent is the CNNC, the National Commission on Collective Bargaining, which was founded in 1946. The Labour Foundation, also founded just after the end of the Second World War, brings together eight representatives from three employer organizations and eight representatives from three trade unions. The composition of the CNNC is tripartite, made up of two groups of 18 representatives from the employer organizations and unions, and with three seats reserved for the ministers of labour, agriculture and the economy (or their representatives).
Similar to its Dutch counterpart, the CNNC gives its opinions on laws relating to collective bargaining and any declarations on extending collective agreements, but it does not function in the same way nor does it have the same level of authority. Even if in the minority, public authorities are not just represented, but have a commanding position, with the Labour Minister presiding over the commission. By contrast, the Dutch Labour Foundation has two chairs, one from an employer organization and the other from a union, who take turns in presiding the commission over the course of a year. CNNC recommendations have little influence over laws, whereas those from the Labour Foundation have sufficient authority to guide government policy. The CNNC is neither an important arena for public debate nor an important institution in the area of decision-making. Its role and composition have a lot to do with the more modest role of collective bargaining, which does not regulate work relations in France in the same decisive manner as in the Netherlands.
The Dutch Social and Economic Council (SER) has its equivalent in France in the form of the CESE (Originally the ‘Conseil économique et social’, ‘environmental’ was added to the organization’s title in 2008) but any similarity ends with the name. Compared to the tripartite SER with its 33 members, the French CESE is a rather overmanned multipartite group made up of 233 members, of whom 69 are from unions and 65 from employer organizations. It includes 99 representatives from 16 other groups, of which 70 representatives are selected by the government. Despite the large membership, women and young people remain underrepresented.
The French CESE reflects the contrast between the abundance of institutions and discussions on participation and cooperation on the one hand, and the lack of any real social partner influence in the public arena on the other. Though the CESE plays a more important role than the CNNC in the area of public debate, where it can be considered as one of the arenas, its recommendations and opinions have none of the influence wielded by its Dutch counterpart. In this respect, it is very difficult for a law to be submitted to the Dutch Parliament without having first been accepted by the SER, something that is certainly not the case in France.
The SER was in fact cited as a model example for reforming the CESE in a report (Chertier, 2006). In addition to highlighting the confusion reigning in the Tower of Babel-like consultation institutions, the report’s author also underlined the imprecision and redundancy of their competencies and the lack of transparency in their actions, concluding that they were altogether inefficient and costly. Dominique-Jean Chertier suggested giving the CESE a central role in the negotiating process, as is the case in the Netherlands. To ensure this, he recommended strengthening its representative capacity by modifying its composition and the way it functioned. However, in the absence of any real political will to confront the numerous groups who would not want to see their seats and the accompanying symbolic and financial recognition disappear, this institution remains in need of reform.
Employee representation at establishment or company level
In both countries, works councils are a major channel for employee representation in establishments with 50 or more employees. The coverage rate is 71 per cent in the Netherlands and 81 per cent in France, much depending on the size of the company. In both countries larger companies nearly all have works councils (Table 8). In the Netherlands ‘mini works councils’ may be established in smaller establishments, whereas in France ‘staff representatives’ can be elected in all establishments with 10 or more employees. The Dutch councils have extensive rights covering a wide range of issues, including all major strategic company decisions. The French councils have a more informative and consultative role. Union presence at workplace level is low in the Netherlands and higher in France, where union delegates exist in 63 per cent of workplaces with 50 or more employees, in those workplaces where the trade unions are considered as representative.
Employee representation.
Source: http://www.worker-participation.eu. Accessed 30 June 2014.
As regards the board representation of employees, the Netherlands belongs to the group of 14 European countries where employee representation at board level extends to private companies. In France employee representation was restricted to state-owned and privatized companies until 2013. It has since been extended to private companies with 5000 or more employees in France (or 10,000 or more worldwide), with at least one or two board members representing the employees.
Decision-making processes
The Eurofound Work Organisation and Employee Involvement in Europe survey (2013) provides valuable information on the differences in decision-making processes in European companies. From the wealth of data, we have selected three indicators describing employee involvement at work. The selected indicators all show that employee involvement is clearly more participative in the Netherlands than in France. The Dutch task discretion index reaches 7.3, compared to 6.2 for France, while the respective figures for the organizational participation index are 6.2 for the Netherlands and 4.6 for France (Table 9). Logically, these data help explain why the likelihood of working in a high involvement organization relative to Bulgaria 6 is twice as high in the Netherlands as in France (2.9 as opposed to 1.4).
Decision-making processes.
b Schwab et al. (2013).
c Hofstede.com. (Accessed 30 May 2015).
The World Economic Forum Global Competitiveness Report (Schwab et al., 2013) provides further insight into labour relations management through measuring the degree of cooperation in labour-employment relations. According to Dutch and French business leaders’ panels, out of a total of 148 countries, France is ranked 135th with a score of 3.4 (on a scale from 1 to 7) and the Netherlands 5th with a score of 5.7. This opinion of business leaders is strikingly consistent with the perceived tension between management and workers as measured by the Eurofound Quality of Life Survey mentioned in the introduction.
These results are also in line with the power distance scores Geert Hofstede mentions on his site (http://geert-hofstede.com/): on a 120 point scale, France scores 68 and the Netherlands 38. Geert Hofstede relates the French score to the fact that French companies normally have one or two hierarchical levels more than comparable companies in Germany and the UK, whereas the Dutch style is characterized by ‘hierarchy for convenience only, equal rights, superiors accessible, management facilitates and empowers. Power is decentralized and managers count on the experience of their team members. Employees expect to be consulted. Control is disliked and attitudes towards managers are informal and on first name basis. Communication is direct and participative’.
Social and economic performance
Five indicators of social and economic performance have been chosen: the unemployment rate, poverty rate, working conditions, social tension and global competitiveness (Table 10). All indicators are in favour of the Netherlands. Whatever the method used for calculating the poverty rate, fewer people are considered poor in the Netherlands. Furthermore, the values of the poverty thresholds are higher. The average unemployment rate has been more than 50 per cent higher in France since 2003. Even if the Netherlands have not escaped the effects of the economic crisis in recent years, the unemployment rate remains lower. While perceived tension could be explained as an expression of a French adversarial ‘nature’, the level of exposure to physical risks more surprisingly reveals the high level of critical working conditions in France. French scores for these indicators are among the worst in the European Union. Overall economic performance as measured by the Global Competitiveness report index seems to constitute a good summary view of overall performance. Though both countries have dropped in the global ranking since the previous report, the Netherlands still belong to the top 10, whereas France is ranked 23rd, a very modest ranking given its position as the world’s sixth largest economy. These results confirm the conclusion of the Eurofound survey of work involvement ‘that employee involvement was associated with higher employee welfare’ (…) ‘fosters enhanced work performance and company productivity’ (Eurofound, 2013: 70).
Social and economic performance.
a Inequalitywatch.eu. (Accessed 10 June 2015).
b Eurostat.
Conclusion
France and the Netherlands present two very specific patterns of industrial relations. The differences are not only in the interest mediation systems or the power of collective actors. They appear also related to the more or less participative ways labour relations are managed, how bargaining and strike rules are fixed, how values at stake are asserted and translated into policy decisions, and how decisions are taken – from workplace level to national policy level. As the Eurofound report states, the degree of employee involvement is not only a feature of the national system of employment regulation, and not only related to the ‘Varieties of capitalism’ argument stressing differences in the coordination practices of employers. ‘There are, however, alternative accounts of national difference that emphasise power relations in the wider society or cultural path dependency (for instance with respect to trust, authority and gender cultures)’ (Eurofound, 2013: 12).
The difference between the two societies is clearly reflected in the ability to conclude social pacts. The famous Wassenaar agreement of 1982 reached by the Labour Foundation, under which the unions accepted wage restraint in return for reduced working hours, after having been threatened with a state policy that would control salaries, would be unthinkable in France. A year later, the French government decided on austerity measures without seeking any support from the unions. Left with the choice to either submit or protest in vain, union credibility was undermined. This probably contributed to the deterioration in strength and numbers that all French unions experienced in the 1980s.
The French policy-making model does not take into consideration social support for public action. The idea that civil society organizations can participate in the development of political compromise and make this more in line with the demands of citizens – and thus more legitimate – is a concept strange to the French political model. The executive is happy to settle for the approximate measure of public opinion polls, and only concedes (sometimes) under pressure from the streets. Neither does a parliamentary majority take into account the view of the minority. The Dutch model is the exact opposite.
However, the differences between the two countries are not only about the capacity of the elites to control and channel the way society as a whole deliberates and decides, and how labour relations are managed. They also arise from the design of social democracy in its macro and micro forms, behavioural patterns embedded in political traditions, the empowerment of rank-and-file employees and citizens, and trust in people’s capacity to assess situations. Despite celebrated periodical social (responsibility) pacts and ‘social conferences’, France suffers from a peculiar lack in achieving collective action, not in the sense of finding a way to overcome the free-rider problem, but in the way individual and collective labour community actors are able to share a common world and to act together despite conflicting interests and unequally distributed power.
Footnotes
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.