Labour relations are changing, but not enough.

Date: 2015-10-07; view: 535.

Slowly losing their chains

For each question 1 – 5, choose ONE answer (A, B, C or D).

Read the article and the questions to it.

READING COMPREHENSION 3

ROUND TABLE SESSION

1.Scan the texts in Readings I-IV and make use of the material discussed in the unit.

2. Make a presentation of the problem. Don't forget to speak about :

· the difference between ethics and social responsibility

· the purpose of business

· ethical issues in contemporary management

· ways of improving ethical performance

· approaches to ethical decision-making

3. Hold a Question and Answer session.

The more Germany changes, the more its industrial relations look the same. On February 12th, after the usual rhetoric, warning strikes and negotiations into the wee hours, employers and trade unions in the engineering sector reached an equally predictable agreement: modest pay rises of not much more than 2% and limited flex­ibility over working time.

Yet despite this seeming sluggishness, Germany's industrial relations are under­going profound changes-perhaps more than the welfare system whose reform is also much discussed. In areas such as pay-setting and employee participation, Ger­many has long been a special case among industrial democracies. In contrast to Brit­ain and the United States, where employ­ment contracts are negotiated company-wide or individually, the country still has an extensive system of centralised, indus­try-wide collective bargaining, with al­most 60,000 agreements. Unions also have a say in how firms are run. If a com­pany has more than 2,000 employees, half of the seats on its supervisory board must go to employee representatives; they call this system co-determination.

Arguably, these principles have served Germany well – and help explain why the country lost a mere nine working days per 1,000 workers annually between 1992 and 2001, against 22 days in Britain and 48 in the United States. Industry-wide bargains spare companies from having to negotiate their own pay deals; and the practice of co-determination has smoothed the way for corporate restructuring.

Yet since the early 1990s, the drawbacks of the system have become apparent. Pay rises were too high, adding to Germany's unemployment. Moreover, centralised bargaining is a blunt instrument: it cannot allow for variations within a sector, nor for the specific needs of a firm. As for co-determination, that system has started to look rather out of step with the imperatives of an accelerating global economy.

Seen from outside, the edifice of Ger­man industrial relations has withstood global pressures surprisingly well: in 2001, 63% of employees in the country's west and 44% in the east were still covered by collective agreements. Yet the bedrock is crumbling. Employers' associations, in particular in the engineering sector, are losing members even faster than unions ­ and not just in the east where a mere 22% are now bound by a union pay deal (against 45% in the west). Worse, firms are moving jobs abroad.

To keep the structure from collapsing, unions have tolerated, often tacitly, com­pany-level agreements that diverge from the industry-wide deals. Today, about a third of private-sector firms have negoti­ated such pacts, often called “Alliances for Employment”, with their workers' coun­cils in order to lower costs, improve pro­ductivity or allow for more flexible work­ing hours. To accommodate this trend, unions are leaving room in collective agreements for company-level pacts. Over the 1990s, the number of German workers affected by this sort of loophole went from zero to 6.6m.

German law should therefore be changed to remove the bias in favour of collective deals, says Norbert Berthold, an economics professor at Wurzburg Univer­sity. Above all, firms should be allowed to diverge from their sector's pay deal if two-thirds of employees are in favour ­ without waiting for union approval. In fact, such legislation is unlikely to be passed in the near future. Chancellor Gerhard Schroder has abandoned any such thoughts - for fear of upsetting his fellow Social Demo­crats. But unions should not think they are safe. Unless they grasp the nettle of com­pany-level pacts and waiver clauses more boldly, firms will manufacture elsewhere; or a different party will take power, bring­ing closer the dreadful day when German labour relations resemble those of Britain or America.

(The Economist)

1. Which of the following best summarises the opening and the second paragraphs?

A. The industrial relations in Germany are, as a matter of fact, similar to what they used to be.

B. The industrial relations in Germany are not so heatedly debated as the country's welfare system.

C. Germany still has a system of industrial relations similar to the one existing in the UK and the USA.

D. The system of co-determination in Germany does not imply employee participation on a company supervisory board.

2. In the third and fourth paragraphs, the writer makes it clear that

A. industry-wide bargains have only done good to its economy.

B. industry-wide bargains have had both advantages and disadvantages.

C. industry-wide bargains do not contribute to an individual company performance in the country.

D. centralised bargaining is a requirement of globalisation.

3. In discussing the selection of problems in the fifth and sixth paragraphs, the writer notes that company-level pacts

A. are becoming increasingly popular.

B. are heavily resisted by trade unions.

C. have never been different from the industry-wide agreements.

D. fully correspond to the industry-wide agreements.

4. In the last paragraph, the writer says that reformed labour agreements

A. will soon gain support from Social Democrats.

B. won't cause any problems to the trade unions.

C. are to be supported by new legislation in Germany.

D. should be made up in accordance with the industry-wide practice.

5. According to the article, industrial relations

A. are much more efficient in Britain and the USA than in Germany.

B. in Germany should be reformed taking into account the local and international peculiarities.

C. must be in strict compliance with the British and American practices.

D. are only in competence of trade unions.