The view of the ILO on the legislative situation of collective bargaining in Hong Kong

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1 The view of the ILO on the legislative situation of collective bargaining in Hong Kong Yoon Youngmo Collective Bargaining Collective bargaining is a right by which workers are able to negotiate on equal footing with their employer on issues of wages, working conditions, and all other issues that affect the terms and conditions of work.collective bargaining has extended to wider and newer group of workers, as the changes in the economy, labour market, and employment practices have brought about new groups/types of workers. This has also brought about new arrangements and features in collective bargaining. Developments in Collective Bargaining Increasing in sub-contracting arrangement, where the dominant contractor is brought into collective bargaining in various forms/extent Korea: manufacturing establishments; after-service workers Another example: labour clauses in public procurement, where the public entities requires the service provider to ensure the rights of workers And also increase in labour dispatch practices, where use-company is brought into collective bargaining. And quasi-employment relationship, dependent self-employment arrangement with the dominant business entity: crane tower operators and concrete mix delivery vehicle drivers in the construction sector, freight truck drivers, etc. various service activities, in health, education, finance sectors The expansion of collective bargaining allows the possibility of effective bi-partite voluntary self-regulation between the workers and employer in new patterns of work arrangement, where the law would take too long time or difficult to be developed (especially to address specific details), or where the regulatory function of the government would not be so effective. Collective Bargaining While the collective bargaining is a right, it is also an instrument of governing/regulating labour market and employment relationship, which has developed in market economy, where it is difficult or impossible for the government to regulate or govern everything. This is where the development of collective bargaining is an essential feature of (governing) market economy, different from the practices in planned economy. It could be said that promotion of collective bargaining is, in some sense, delegation of the responsibility and function of government to provide regulation, to ensure the effective function of the labour market, to ensure the well-being of the citizens, etc. to collective bargaining and the two actors in collective bargaining. It is because the law or the government cannot be expected to regulate every detail of labour market and work arrangement, and because it is believed or accepted that the government should not try to regulate every detail. ILO Standards on Collective Bargaining ILO Conventions 87 and 98 and other related conventions and recommendations contains and sets out some key requirements to ensure or which would ensure effective function of collective bargaining. They

2 are: effective recognition of trade union as a partner in collective bargaining obligations of employers to engage in collective bargaining in good faith protection against and remedy of unfair labour practices effective mediation and other facilitation to assist negotiations effective guarantee of and procedures for right to strike, lock-out effective compliance/application of collective bargaining agreement, through provisions for legal effect of collective bargaining agreement, labour inspection, and dispute resolution ILO Conventions require that these above enabling mechanisms should be provided by appropriate national legislation, government regulatory efforts, and/or collective bargaining agreements themselves. Failure or shortcomings on the part of the law or government to provide the basic environment (including those above) for the development and practice of effective collective bargaining is subject of the ILO s supervisory procedures (including peer review ) and technical assistance. The situation of legislative provisions of above elements differs country to country. Legal Provisions for Collective Bargaining What does absence of robust or specific/detailed legislative framework for collective bargaining mean? That the direct actors have defined, are able to, and insist that they will adopt and maintain self-generated rules of collective bargaining, and expect the role of the law and/or government to be minimal. Sweden, Germany, UK (difference exists) That government is expected to or has taken on itself to provide effective regulation of labour market, working conditions, employment relations, etc. development states (early periods in developing countries, like Korea) socialist-oriented countries strong state tradition; less delegation of the power, role, function of state/government to social actors That regulation is left to the individual, with little government role as a whole, both in collective relationship or individual relationship. Less robust collective bargaining as a mechanism and institution of governing work and labour market means: greater need for the role of the law and/or government to address the specific issues in the world of work what is the situation Increased government activism: Increases in law, especially on issues of discrimination, harassment, etc. new issues (including minimum wage); More institutions and/or interventions for increased individual disputes Increase in public cost Slow government response Increased individual efforts to develop personal resources to cope with adjust to labour market Increased individual stress, leading to increased complaints, Increased individual reaction Increase in individual and public cost

3 In some parts of the world, these situations are linked to decline of trade unions and collective bargaining, slowness or ineffectiveness of trade unions and collective bargaining to address new issues, low level of trade union and collective bargaining development: Different situations in European countries, Japan, Korea, etc. Developing countries, transition countries Developments in Legal Provisions on Collective Bargaining There two examples where governments have been involved in developing legislative provisions for collective bargaining. UK and China. The third example is the case of development of mechanisms of consultation and dialogue. UK is the most typical example of voluntarism, which is understood misunderstood as absence of legislative framework for trade union recognition and collective bargaining. But, over the last few decades, there have been repeated initiatives to develop and fine-tune the legislative framework. Mainland China does not have a robust legislative framework for promoting and facilitating collective bargaining. But, like other efforts undertaken in the course of reforms over the last few decades, there are various initiatives in this area. Voluntarism in UK should not be understood as being non-committal or hostile attitude towards collective bargaining even less, lack of development in collective bargaining.uk voluntarism developed together with strong commitment to collective bargaining, and strong insistence to avoid reliance on courts or application of law to solve problems that arise in collective bargainingsignificant legislative initiatives were first undertaken under the Thatcher government, bringing about a shift away from multi-employer collective bargaining to enterprise-level collective bargaining Voluntarism in UK Shift towards enterprise-level collective bargaining brought about a need for and set of procedures for trade union recognition as a precondition for collective bargaining. While the series of laws provided for compulsory procedures for trade union recognition, they encouraged voluntary recognition. This has brought about increases in trade union recognition, especially in areas where trade unions presence was lower. However, in the UK context, the shift to enterprise-level collective bargaining, combined with change in economic structure, and attitude towards trade unions and collective bargaining combined to bring about decline in trade union density and collective bargaining coverage. The weakening of collective bargaining as a key mechanism of governance of labour market and terms and conditions of work and employment brought about increases in individual disputes, and cases that public bodies had to deal with.

4 The legislative development on collective bargaining in UK shows that it is a product of compromise, which reflects the balance of forces that have different attitudes, and therefore, does not produce the same outcomes. But, on the other hand, decline in the effectiveness of collective bargaining means increases in individual disputes whether they are actually brought to dispute handling bodies (so they are resolved to a certain extent) or they remain dormant (so they seep through people s experience, possibly leading to change of outlook. China The developments in China provide another kind of story. Trade unions are strongly established within the overall system. However, as their development and pattern of work were shaped and established during the times of planned economy, they have been slow in adapting to the new changing situation and responding effectively to the issues that arise in the course of growing and deepening market economy. This has led to a surge in various unprecedented developments: strikes (collective work stoppages) by workers increases in group dispute cases (disputes involving more than 10 workers) brought to the arbitration commission increases in individual disputes This has compelled different bodies to respond: ad hoc mediation and negotiation facilitation in strikes by public bodies inclination to deal with workers strike action as public order issue rather than employment related disputes growing workload of arbitration commissions growing workload of labour departments growing involvement of lawyers and other groups in providing various support to workers highlighting of the ineffectiveness of trade unions innovations in recognition non-union collective bargaining representatives initiatives of some trade unions for innovation and re-tool themselves: elections, inclusion of worker-elected bargaining representatives, local-sectoral collective bargaining In the context there have been waves of legislative initiatives which seek to provide some regulatory framework for promotion of collective bargaining. These developments have mostly taken place at the Province or lower levels, rather than at the national level the draft regulation being debated in Guangdong is one example. They have, in different degrees, focused on issues of recognition of collective bargaining representatives, employer s obligation towards collective bargaining and protection of workers engaged in collective bargaining, procedures for collective bargaining, including right to information, and procedures and mechanisms for dispute settlement, and strike. The province and lower level initiatives are creating experiences and examples that could be used for the development of national level regulation Consultation mechanisms In many countries, recently there have been renewed efforts to promote consultation and dialogue at the workplace level.

5 EU, European Workers Councils Vietnam, developing regular dialogue mechanism that extends the function of annual workers congress There are some important lessons from these efforts which reinforce the principles identified in the ILO Conventions: mandatory mechanisms for consultation at the enterprise level are not replacement for collective bargaining in many countries, consultation mechanisms are systematically linked to collective bargaining In Germany, the works council system is mandated at the enterprise level in the context of binding sectoral collective bargaining. In most countries, the work of enterprise level consultation mechanisms are coordinated by trade unions. In many countries, most consultation mechanisms without linkage to trade union and/or collective bargaining fails to generate sufficient worker confidence, which undermines the whole rationale for such a mechanism. The experience shows that collective bargaining provides the firm ground especially regarding rights and entitlements -- on which more flexible enterprise level efforts can be developed through consultation mechanisms that contribute to productivity improvement. Collective Bargaining in Hong Kong The developments in UK and China, as well as other countries can inform the discussions and various efforts in Hong Kong. The underlying current that informs the legislative initiatives for trade union and collective bargaining is the awareness that without clearly defined and trusted procedures the issues arising from world of work can demoralize and destabilize labour market and create incentives or reasons for people to seek non-procedural options; and that legislative provisions are important, not only because of outcomes they make possible, but, because they can shape and control -- the way the issues are actually handled (that is, they provide procedural legitimacy regarding an outcome that is brought about by that procedure). In the recent years, the ILO has recognized positive meaningful efforts in Hong Kong to develop the basic regulatory framework for issues in the labour market: minimum wage regulation, standard working hour regulation, and now this new highlight on issues of trade union recognition and collective bargaining. ILO supervisory mechanism (Committee of Experts on Application of Conventions and Recommendations) had a number of opportunities to make observations on the situation of legislative framework for collective bargaining. It has noted, in summary: The need to strengthen the framework for collective bargaining, especially to ensure the effective implementation of collective bargaining agreements The absence of an institutional/legislative framework for trade union recognition and collective bargaining, a firm platform on which voluntary efforts could be undertaken with the support of other promotional efforts and mechanisms. The need to provide effective protection against anti-trade union discrimination, that would be vital for creating confidence in the overall collective bargaining framework It will be important that the efforts to develop an effective framework of collective bargaining that takes note of the CEACR observations in good faith, and also make use of technical assistance that the ILO can provide.