Beyond the Anglo-Saxon and North European models: social partnership in a Greek textiles company

© Blackwell Publishing Ltd. 2006, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St., Malden, MA 02148,USA.

Industrial Relations Journal

37:2, 131–146ISSN 0019-8692

Blackwell Publishing Ltd.Oxford, UKIRJIndustrial Relations Journal0019-8692Blackwell Publishing Ltd. 2006March 2006372131146Original Articles Social partnership in a Greek textiles companyElias Galinos and Mick Marchington

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Elias Galinos is Consultant, Human Resource Planning Ltd, Athens, Greece. Mick Marchington isProfessor of Human Resource Management, University of Manchester. Correspondence should beaddressed to Mick Marchington, Manchester Business School, University of Manchester, Booth StreetWest, Manchester M15 6PB, UK; email: [email protected]

Beyond the Anglo-Saxon and North European models: social partnership in a Greek textiles company

Elias Galinos and Mick Marchington

ABSTRACT

Much of the literature examining social partnership focuses on either Anglo-Saxonor North European countries, differentiating between liberal market economies(LMEs) and coordinated market economies (CMEs). These studies argue, quite cor-rectly, that the institutional forces shaping partnership in the two types of economydiffer markedly, with the consequence that partnership takes somewhat different formsat the workplace. By contrast, there is only limited research on social partnership inMediterranean economies—such as Greece—even though there are strong reasons tosuggest it may be quite different from both LMEs and CMEs because of relativelyrecent military influence at state level and less well-developed systems of industrialrelations at organisational level. This article examines the forces operating both atnational and at local level that facilitate or hinder the development of social partner-ship. It is based on the results of interviews with government, industry and unionofficials and a case study of partnership in a textiles company in northern Greece. Itconcludes that institutional forces provided workers with more protection than theywould have achieved in an LME but that ultimately competitive pressures and a lackof effective workplace representation limited the degree to which the state can influ-

ence the processes and outcomes of social partnership at local level.

INTRODUCTION

Most discussion on the evolution of consensual industrial relations and partnershipagreements has focused on initiatives within the Anglo-Saxon and/or North Europeancontexts (Ackers, 2002; Guest and Peccei, 2001; Heery, 2002; Marchington

et al

., 2001;Stuart and Martinez Lucio, 2005; Turnbull

et al

., 2004). These studies have analysedsocial partnership within settings that have a prolonged tradition of bi-/tripartiterelationships between the industrial relations actors. These research contexts are alsocharacterised by a relatively stable political history and often a long and well-established presence of trade unions. On the other hand, very few students of

© Blackwell Publishing Ltd. 2006.

132 Elias Galinos and Mick Marchington

partnership have dealt with analogous developments in southern Europe, and evenfewer with the key socio-political and institutional factors behind the latest revival oftripartism and the signing of novel social pacts (Hamann, 2001; Hamann and Mar-tinez Lucio, 2003; Leonard, 2001). Moreover, these analyses are primarily focused onthe resurgence of centralised collective negotiations between peak-level social institu-tions, and there is a tendency to ignore responses of specific economic sectorsor companies (Rhodes, 2001) or explore the ‘micro-foundations’ of inter-/intra-associational decision making (Molina and Rhodes, 2002: 312).

This article aims to plug a gap in the literature by examining social partnership atnational level as well as within the context of a textiles company in Greece. Inparticular, it seeks to assess the ways in which the peak-level institutions shaped theemergence of partnership in an organisation operating in an intensely competitiveglobal product market and a local labour market characterised by high levels ofunemployment. Partnership at the organisation focused primarily around the imple-mentation of the national working-time agreement, and not surprisingly, tensionsarose between forces which were seeking to promote ‘good’ practice and those thatwere intent on reducing labour costs and employee influence. We examine a range ofnational-level forces that tend to facilitate and hinder partnership at the workplace,and analyse the way in which this helped to shape the behaviour of actors within theorganisation. In order to provide a multi-level perspective, data were collected fromgovernment officials and senior managers and trade union leaders beyond the work-place, as well as from a range of individuals in different roles at the textiles company.Hence, this case attempts to assess the differential influences of centralised and decen-tralised industrial relations developments, and in so doing it focuses on how partner-ship might develop in Mediterranean economies (MEs) such as Greece. While thereare clearly limits on how far we can generalise on the basis of a single case study, thedata collected at national level do allow us to raise questions about whether or notthe centralised nature of the system and support from centripetal institutions can helpto promote social partnership in the absence of a strong union presence. Moreover,we can directly address the issue of whether or not national-level institutions canprovide support for workers who lack effective collective organisation.

The article proceeds as follows. First we review briefly the literature on socialpartnership using the distinctions between liberal market economies (LMEs) andcoordinated market economies (CMEs), as well as providing reasons for examining aMediterranean case. Following this we outline the research approach and give somedetails of the types of interviews undertaken and with whom, as well as outlining whywe chose to focus on the textiles company. In the third section we analyse the forcesthat facilitate and hinder social partnership at both national and local levels. Finallywe draw conclusions from this study in terms of policy and practice.

CONTRASTING MODELS OF SOCIAL PARTNERSHIP

Many authors have argued that definitions of partnership are extremely vague andambiguous, in a sense meaning all things to all people. On some occasions theindeterminacy of the social partnership notion has been castigated by characterisa-tions such as a ‘portmanteau term’, an ‘umbrella concept’, a ‘catch-all term’, whichallows different actors to interpret it according to their particular ends and aspirations(see e.g. Ackers and Payne, 1998; Kelly, 2004; Knell, 1999; Marchington, 1998). Some

Social partnership in a Greek textiles company 133


refer to the processes accompanying a specific form of labour–management coopera-tion at workplace level and assess the degree to which it helps to develop mutualitywithin hierarchical organisations. Others are more interested in its ability to shape thepolicy debate at national level, and in particular, the extent to which social partnershipmight afford workers more or less protection than they would be likely to achievethrough more militant strategies. Others, notably Hyman (2005), address the geo-graphical and linguistic roots of the term. Indeed, while many of the studies ofnorthern Europe make use of the term ‘social partnership’, the UK research typicallylimits itself to looking at ‘partnership’ and does not refer to its wider social ideals.

The most common distinction is between the Anglo-Saxon approach of workplacepartnership agreements and the Continental European equivalent of centralised bi-/tripartite agreements and social pacts, differentiated along the well-known lines ofLMEs and CMEs. The former focuses on the notion of stakeholding partnership,which primarily aims at the enhancement of firm’s performance through the nurturingof long-term trust relationships between the industrial relations actors (Ackers andPayne, 1998). Management motives for implementing partnership are often charac-terised as defensive and pragmatic, as a new way in which to gain worker commitmentto organisational goals during periods of major structural change (Oxenbridge andBrown, 2005). While employers seek greater flexibility in their operations so as to meetorganisational goals, worker and trade union goals focus on employment security anda more meaningful contribution to management decision making in return (Guest andPeccei, 2001). ‘Workplace partnerships’ usually imply an agenda of extensive consul-tation and mutual cooperation between managers and employee representatives,which emphasises the importance of strengthened employee voice and the creation ofa ‘stakeholder mentality’ in the firm (Knell, 1999). In these cases, partnership can beenvisaged as either a ‘new commitment’ of enterprise management to pluralism or asa devious attempt to marginalise trade unions in the face of derecognition (Bacon andStorey, 2000; Marks

et al

., 1998; Sisson, 1999). Accordingly, research often focuses onmutuality and the balance of power in organisational outcomes.

However, this UK-originated model of ‘partnership at work’ is much narrower thanthe broader term, ‘social partnership’, which is typical of North European countries(Tailby and Winchester, 2000: 374). The latter entails a wider societal acceptance ofthe divergent—and sometimes conflicting—interests of the national negotiators,which are represented by commonly recognised collective organisations within cen-tralised institutional frameworks (see also Ferner and Hyman, 1998; Sisson, 1999).Many European industrial relations systems have capitalised on their long heritage ofneo-corporatist political exchange between interest organisations and their estab-lished ‘institutional advantages’ in order to put forward a form of centralised bargain-ing (Bispinck, 2000; Hamann, 2001; Leonard, 2001). The traditional redistributivecharacter of social concertation has been transformed into a gradual devolution ofregulatory authority to more decentralised bargaining. Moreover, the current socialpartnership agenda has been refocused on wider aspects of the employment relation-ship, namely issues of national competitiveness, labour-market flexibility, social cohe-sion, welfare and employment security (Hamann, 2001; Leonard, 2001; Marginsonand Sisson, 2002). The contemporary model of social concertation encompasses anexchange—and parallel diffusion—of regulatory power among the interest groups,the governability of which is upheld by the collateral participation of the industrialrelations actors at several echelons of social interaction (see Negrelli, 2000; Rhodes,2001).



The central theme of most partnership agreements in the UK is the enhancementof business success, whereas the preservation and expansion of national competitive-ness represents the equivalent aim in most European countries. It is also clear thatthis differentiated approach influences the ancillary objectives that underpin the part-nership concept and constitute the areas within which exchange of interests betweenthe actors takes place. In broad terms, according to Turnbull

et al

. (2004), socialpartnership in the CMEs focuses on stability, reliability and continuity. Even if theparties at workplace level in LMEs were to desire similar goals, they are limited byconstrained trust, fragility and a lack of mutuality because of the short-term financialpressures that characterise societies that are driven by shareholder goals. In thesesituations, partnership could be characterised as the ‘least-worst option’, as a con-straint on the speed with which employers act to shed labour while restructuringorganisations to meet the challenge of declining levels of competitiveness (Hyman,2005). In CMEs, by contrast, employers are able to take advantage of longer-termfinancial support and an institutional regime that reinforces the need to invest inskilled labour through the development of national training and education systems.In a sense, mutuality is built into national frameworks and social partnership is morelikely to be characterised as a desirable social goal irrespective of which political partyis in power (Hall and Soskice, 2001).

Nevertheless, the distinction between LMEs and CMEs can be overplayed in atleast two ways. First, the focus on national-level institutions tends to overlook localadaptations of national-level policies, and in particular, the way in which foreign-owned multinational firms respond to global competitive forces and seek solutionsthat do not ‘fit’ with well-established national societal frameworks. For example, inthe manufacturing sector, international competition places additional pressures onfirms to mimic their competitors and source material and labour from countries withlower employment costs. The impact of this on existing forms of labour relationsmeans that workers in CMEs are no longer immune from such market forces—if everthey were. As Almond

et al

. (2005: 301) conclude, ‘institutional forces shape, but donot determine, the way that multinational corporations function’ because there is adegree of ‘social space’ even in the most coordinated of CMEs. Similarly, it is alsomisleading to assume that all organisations in LMEs—particularly those in sectorswith longer time frames and higher added value products—automatically take advan-tage of looser institutional regimes to develop forms of partnership that are totallyexploitative (Marchington and Vincent, 2004). In other words, while there are likelyto be tendencies in different countries towards particular forms of partnership it wouldbe foolhardy to ignore the opposing and competing forces that operate in either formof market economy. In CMEs, irrespective of national-level influences, workers inindustries facing intense competitive pressures and employed in multinationals withplants in less well-developed countries are subjected to coercive comparisons (Ruberyand Grimshaw, 2003), which can undermine industrial relations in general and socialpartnership in particular.

The second problem with this simple binary distinction is that it is hard to locateall countries clearly in either the LME or CME category. Indeed, Hall and Soskice(2001: 21) refer to a number of countries that are in ambiguous positions, includingGreece, which is the focus of this article, and they suggest that these countries mightwell be described as MEs. The extent to which these countries have a large agrariansector and, for the purposes of this article, have experienced extensive state interven-tion in relatively recent times, makes them significantly different from their North



European neighbours. Work by Hamann and Martinez Lucio (2003) shows how theSpanish system of industrial relations has only recently developed following the endof the Franco regime, and that workplace representation is to some extent hamperedby historical legacies and the political and institutional context of democracy. Evenamong the ME countries, the resurgence of tripartism and social dialogue has notoccurred in a uniform way and the mode of institutionalised bargaining has beencritically influenced by past traditions and the established role of the industrial rela-tions actors. Nevertheless, there is strong support for the emergence of a discernibleMediterranean model of partnership that ranges from Portugal to Greece via Spainand Italy and shares a discrete set of institutional characteristics, common bargainingprocesses and a comparatively similar distribution of power among the negotiatingparties (Campos Lima and Naumann, 2000; Hamann, 2001; Ioannou, 2000; Pochetand Fajertag, 2000).

The evolutionary route followed by the Mediterranean systems has been shaped bya range of tightly woven political and socio-economic parameters. In particular, theturbulent political history of these countries, which have undergone long periods ofcivil wars, dictatorships and political instability, has inhibited the cultivation of coop-erative bargaining structures. The dearth of participatory structures and mechanismsof social concertation, in tandem with the prevalence of low trust relations betweeninterest groups, created a legalistic industrial relations framework as a supplement tothe inchoate character of Social Dialogue and to inexperienced negotiating parties.This legalism has served to ossify the scope and content of collective agreements atthe level of the organisation, while allocating a leading role to interventionist nationalgovernments (Campos Lima and Naumann, 2000: 332; Hamann, 2001). In a nutshell,social concertation and interest mediation was never correspondingly institutionalisedwithin ME contexts as it had been in the CMEs. The prevailing traditions of socialantagonism created a conflictual bargaining behaviour among the centralised negoti-ators in southern Europe and prevented the development of voluntary modes of jointregulation and consultation. Moreover, the absence of trusting relations led to anaugmented need for bargaining power (primarily political), which could safeguard thediverse organisational interests of the social groups during the legislative process(Hamann, 2001).

Social partnership in Greece was late to develop resulting from long periods ofpolitical instability and unrefined governmental paternalism. As the country won itsindependence and democratic constitution later than most other European countries,the Greek union movement was severely suppressed during long periods of dictator-ships and has only recently evolved from a low membership base. This evolution,accompanied by the adherence of the state to a legalistic approach, has formed a‘legal-administrative’ environment for industrial relations, which has influenced theattitudes and behaviour of the national-level actors and the structure of collectivebargaining in Greece (Ioannou, 1999: 3). The reformation of the broader social milieuwas initiated after the restoration of democracy in 1974. Yet, these reforming legalinterventions (1982, 1990) lagged significantly behind similar modernising trends inSpain and Portugal (Hamann, 2001; Kravaritou, 1995).

Repeated governmental interventions restricted free collective negotiations, union-isation and strike activity. One of these, in 1955, provided the legal framework, whichfor the next 35 years created a state-controlled type of collective bargaining under theconstant threat of mandatory governmental arbitration. The result of this legislativeinitiative was the development of an intermediate type of bargaining system, which



‘was neither centralised nor decentralised but rather widely fragmented, based as itwas on the structure of occupational, cross-company and cross-sectoral unionism’(Ioannou, 1999: 25; Politis, 1998). This evolution hampered the development of freecollective negotiations and inter-union collaboration, fostering a conflictual characterin Greek industrial relations (Mihail, 1995). The restricted role for trade unions andthe accumulated animosity between the labour movement and the state provoked aconfrontational industrial relations climate, characterised by the clear presence of classpolitics and antagonistic bargaining strategies. This has led to a multi-fragmentedstructure for Greek representative organisations, which are traditionally torn apart byintense political rifts and intra-class cleavages. These intra-organisational rivalries limitthe potential for consensual tradeoffs and partnership relations because of the inabilityof the partners to articulate a unified organisational stance (see also Ioannou, 1999;2000; Kouzis, 1999). These structural particularities have deprived the company-levelindustrial relations actors of the experience and professionalism required to developbargaining agendas and consensual agreements that could potentially achieve mutualbenefits. Representatives from both management and unions at workplace level con-sequently either rely heavily on the competence of more centralised organisationalactors or revert to confrontational strategies that have worked in the past.

Having examined the meaning of partnership in quite different national contextsand developed the argument for differentiating ME from other market economies, wecan now turn to the case study that is at the heart of this article. Following a briefoutline of the methodology employed, we review the factors at national and locallevels that facilitate and hinder the development of partnership within the case-studycompany.

METHODOLOGY

Data were collected at two separate levels for this study. First, semi-structured inter-views with government officials from the Ministry of Labour, trade union leaders andrepresentatives of the main employers’ organisations were undertaken to find out moreabout the nature of partnership at the national level. This also provided valuableinformation about the background to the recent initiatives as well as policy perspec-tives on the move to a new working-time agenda. Several of these individuals wereinterviewed on more than one occasion, partly to gain further insights but also tosupplement earlier data and follow-through any key issues over time. These interviewstypically lasted for one to two hours and they were tape-recorded.

This was then followed up with a number of case studies, one of which (BPG) formsthe basis for this article. At organisational level, approximately 30 people were inter-viewed, drawn from a wide range of groups but including the Chief Executive, seniormanagers responsible for human resources, production and financial affairs, produc-tion/line managers and a sample of workers from different parts of the company. Onceagain, these interviews were semi-structured and tape-recorded. Interviews with man-agement personnel typically lasted for one to two hours while those with non-mana-gerial staff took between 40 minutes and one hour. In addition, company informationand minutes of meetings were inspected, and there was an opportunity to observeproduction processes first hand.

BPG is an ideal research site because it was the only partnership agreementsigned after the 2001 legal reforms that covered all categories of staff. As such it



was considered a pioneer experiment, given the traditional absence of formal andlegally binding agreements at this level in Greece and the highly contentious charac-ter of working-time agreement at national level. Moreover, this particular companywas important because of its sectoral, economic and geographical characteristics: asector subject to fierce international competitive pressures (textiles) and an area(northern Greece) with high levels of unemployment and very few alternative jobs.During the 1990s, the area was devastated by the sequential closure of several cloth-ing companies, thus creating high levels of unemployment for specific age/gendergroups. The study therefore enabled an investigation which tested the resilience ofemergent partnership structures at a company with prior hostile bargaining experi-ences and a poor economic record. Yet, the actors decided to take advantage oflegal provisions and develop a partnership agreement in advance of other Greekcompanies.

THE DEVELOPMENT OF PARTNERSHIP AT BPG

BPG was initially established in 1980, and after a series of mergers it was taken overby a German firm in 1999 which also has interests in other southern Europeancountries. The company manufactures female overgarments such as trousers, cardi-gans and T-shirts for its German parent, and the specific work undertaken at the siteinvolves seaming, washing, ironing and packaging of garments. There are four sepa-rate production departments, each of which works on different types of garments andthere is little or no movement of staff between them. The materials are designed andcut out at other sites, and BPG operates as part of an ongoing supply chain, with theGerman parent as its sole purchaser.

At the time of the case study, the company employed 333 workers, the majority ofwhom were collectively represented by a company trade union that was formed in thelate 1990s, soon after the company had been taken over. Indeed, the only period ofcollective bargaining experience at the company was soon after the takeover and thislasted until the signing of the partnership agreement in 2001. During this period(1999–2001), BPG management recognised a representative union organisation withwhich it negotiated about variations in demand created by the seasonal character ofproduction and intense competitive pressures. To achieve change the company putforward a series of working-time rearrangement programmes, within the providedlegal boundaries, that were in stark contrast to the prior informal, yet autocratic,management style that required workers to take unpaid leave during sluggish periods.The implementation of these new flexible working arrangements led to the conclusionthat the company needed to cut costs by 15 per cent—either by a novel working-timesystem or by continuing rounds of redundancies (2 per cent per month); this latterfigure is laid down nationally as the maximum reduction in staffing that is allowed inany one month through redundancy.

This situation initiated consecutive bargaining rounds between the union and thecompany and instigated a period of dispute and intense opposition, which was esca-lated by the closure of a whole production department and the consequent lay-offs ofits workers. Protracted conflict also caused the alienation of the existing trade unionofficials from its constituency, who voted for a new presiding board during the elec-tions of 2001. This development coincided with the endorsement of the new legalreform by the Greek parliament, which was put into effect in April 2001 and provided



space for a flexible rearrangement of working time without any associated cut-off ofemployee income. The legal provisions of Act 2874/2000 were approved by a signifi-cant majority of the workforce and an agreement was signed by the negotiating partiesat the end of April 2001.

This agreement provided for a 38-hour working week, without income reductions,with the company having the right to redistribute 138 working hours per annum inorder to meet variations in customer demand. However, the agreed working-timearrangement still needed to be accompanied by a predetermined annual schedule ofworking hours, which had to be approved via a ballot of the entire workforce andsigned by both parties.

For a number of years prior to the signing of the partnership agreement, theparties at local level met through a formal system of monthly meetings with clearagendas and timescales. Since 2001, however, this has been superseded by a moreinformal approach to inter-group communications, particularly between senior man-agers and trade union representatives. As a result, meetings take place on a morefrequent basis as issues arise, and both sides have shown a willingness to call meet-ings as they feel fit, without the need for preset agendas or advance notification ofagendas. Typically these meetings have taken place at least once or twice per month.The issues covered vary but generally they focus around discussions of annual work-ing hours, redundancy schemes, productivity targets, employee benefits, working con-ditions and holiday leave entitlements. The informal approach has also been usedincreasingly as the preferred method of communication and consultation betweenmanagers and individual employees. Suggestions for improvements are made throughrepresentatives or direct to management, again through informal processes ratherthan a specifically-instituted suggestion scheme. In addition to individual and repre-sentative participation, there is also provision for meetings of the total workforce inorder to communicate issues of concern. Ballots are regularly used to find outemployee views on issues and new developments; as we see below, the employees whowere interviewed responded positively to these initiatives as well as to the new mana-gerial style.

FACTORS SHAPING PARTNERSHIP AT NATIONAL AND LOCAL LEVELS

In this section we review, in turn, the factors at both national and local level that haveshaped the development of partnership at the case-study firm. In each case, we focusboth on facilitating and hindering factors, aiming to show the links between the twolevels where relevant. It is clear that while there were forces at both levels that helpedto shape and develop partnership at BPG, there were also hindering and constrainingforces that limited its development and sustainability in the longer term. The tensionsand contradictions inherent in partnership are therefore examined.

National-level influences

This study was undertaken following the unsuccessful round of Social Dialogue in2000 and the ensuing round for the reformation of the Social Insurance System, whichhad a highly contentious opening. These legal interventions were unanimouslyrejected by the social partners and hence were only partially adopted by the companiesand their corresponding trade unions. The reforms on working hours were introduced



under Act 2874 that was unilaterally enacted by the government without the consensusof the social partners. The primary intention of this legal reform was to disengage theGreek labour market from its previous strictly legalistic character and introduce a setof flexible arrangements, which would subsequently boost the total volume of employ-ment. This battery of measures focused primarily on the flexibilisation of workingtime (with a parallel reduction of weekly working hours), providing a legalised frame-work for the 38-hour working week without pay cuts in exchange for flexibility in totalworking time over the year. It also incorporated changes relating to more rationallegal provisions for mass redundancies, further restrictions on overtime working, thereduction of employers’ Social Insurance contributions, and wage increases for part-timers (Kouzis, 2001).

The new legislation was without doubt the principal factor promoting social part-nership as this provided an opportunity to develop agreements at local level, followinga long period of conflictual industrial relations. During this period social partnershipwas facilitated by a generally positive stance by both sets of social partners, along withthe more widespread use of experts. All of the senior officials interviewed at nationallevel mentioned this as a new development, arguing there had been a shift away froma primarily economic orientation towards a wider acceptance of the need for socialchange and the development of ideas through ad hoc joint committees. The VicePresident of one of the major employers’ organisations now noted ‘a climate of trustbetween the two social partners . . . after so many years we have [finally] achievedthat’. Similarly, one of the senior union officials also commented that the bargainingagenda had widened to include a ‘stakeholder approach that took into account theneeds of diverse groups such as the unemployed’.

All the main partners at national level saw social partnership as one of the prioritiesin the development of Greek industrial relations. It was felt, particularly by theMinistry of Labour, that social dialogue was critical to achieving consensus on themajor national goals of competitiveness, social progress and industrial peace. Thisview was shared by the employer and union representatives. The employers felt thatcreative tripartite cooperation had to be a major factor in diminishing social antago-nism and constructing a stable environment for industry. One of the employer repre-sentatives said, ‘it is ridiculous to believe that broader social issues can be unilaterallysettled by government’. Similarly, one of the national trade union officials, despitebeing more sceptical about the benefits of partnership, argued that:

The cost of a non-participation strategy is far too big . . . you cannot easily convince broader societyif you refuse to get engaged in Social Dialogue.

A second factor promoting social partnership was mutual recognition that the partieshad divergent interests as well as shared goals. Given the history of antagonisticrelations, the trade unions were more reserved about the value of social partnershipbut nevertheless they were much more prepared to engage in current tripartite discus-sions than they had been in the past. This was largely because they foresaw thepossibility of reaching a common agreement on matters of major national interest—such as competitiveness. They were also willing to agree a common route that wouldset broad national goals and social parameters while leaving sufficient space for thedevelopment of collective bargaining at workplace level. Perhaps surprisingly, theemployer representatives also saw the achievement of agreed national goals as anadvantage, yet they were still realistic enough to realise this would not eradicateconflict altogether. As one of them said:



We do not want a spurious type of industrial peace. There is always space for a win-win situation, butwe need to emancipate ourselves from the pressure posed by our ‘small’ members that care only fortomorrow and not for the future.

These views were reinforced by one of the government respondents who argued thatthe state had a crucial role in shaping wider national interests and a shared societalconscience. He argued that widespread acceptance of a set of common goals shouldsubsequently influence the mode of interaction between the social partners and theiremergent bargaining behaviour.

Third, all parties perceived an orchestrated attempt by the European Union (EU)to pave the way for a gradual devolution of policy-making power to the social partnersat national level. This move was supported by government, which favoured the estab-lishment of wider framework agreements at the national level that could then beadapted at sectoral and company level by social partners who had greater knowledgeof specific local issues. Not surprisingly, the trade unions saw the value of a centralframework agreement that set clear minimum standards, so preventing a downwardspiral of unilateral concessions by workers in response to pressures from multinationalorganisations, which manufactured in lower-wage economies. The trade unions hadalso responded to this drive by upgrading the level of scientific documentationrequired for the advancement of social dialogue. Submitting reports supported byresearch studies had allowed the trade union bodies to demonstrate to employers andgovernment that they were capable of taking a more ‘responsible’ stance.

While there was considerable evidence of a positive stance towards the developmentof social partnership, all parties agreed this was difficult to achieve against a backdropof conflictual and state-dominated industrial relations. The trade unions were par-ticularly critical of what they saw as an unholy alliance between government and‘unyielding’ employers’ organisations that had prevented the development of a posi-tive culture of Social Dialogue. Not surprisingly, the employers castigated both tradeunions and government for the failure to develop social partnership in the past,arguing that:

The culture of dialogue is missing from our DNA . . . this sort of debate is not in our habit and thereare profound social and historical reasons for this level of mistrust.

The employer representatives were particularly concerned that the development ofpartnership in Greece was unlikely to keep pace with progress in the rest of the EUfor several reasons. Principal among these was the lack of robust representativeemployee organisations at enterprise level and the overt unwillingness of tradeunions to sacrifice overtime working because it could reduce the earnings of theirmembers.

A second impediment to the development of social partnership also has its roots inthe history of Greek industrial relations, in particular, the paternalist stance taken bygovernments in the past. Both the trade unions and the employers at national levelhad been concerned that the new industrial relations framework established in 2001would remain inert, principally because of its unilateral enactment and some of itsdetailed provisions. More seriously, both parties were sceptical about the reasonsbehind government support for Social Dialogue. The trade unions felt that govern-ment was using this as a smokescreen for decisions that had previously been taken,and that they had no intention of taking into account the views of other participantsin order to achieve a common approach. Again, the employer representatives hadsimilar views, but went further in arguing that the current form of Social Dialogue



displayed a highly manipulative character. Accordingly, there was concern that thequasi-participative aspect of Social Dialogue cast doubt upon its future development.

In short, while there was clear evidence that the social partners at national levelwere committed to the development of a new approach to industrial relations at locallevel, there were concerns that it might not develop because of the previous legacy ofconflict and doubts about the government’s intentions. Nevertheless, there did appearto be agreement that partnership was critically important in addressing broad societalgoals related to competitiveness, working hours and unemployment, and that it wasimportant for organisations to develop their own systems at local level.

Local-level influences

Without the impetus from national level to implement Social Dialogue, it is excep-tionally unlikely that partnership would have developed at BPG. The working-timeagreement was seen in very positive terms by workers at the company who felt thatthe requirement to regularise working hours would help them in a number of ways,not least in ensuring greater consistency. Prior to the enactment of the 2001 Regula-tions, some workers found that they spent some weeks without work at all, whileothers were employed at the factory in excess of 60 hours. The idea of providing aguaranteed working week of 38 hours, with a further 138 hours to be distributedacross the year, provided much more certainty. While there were still times whenmanagement amended working hours at relatively short notice, the situation was nowmuch better. Moreover, the fact that the company had agreed the distribution ofworking hours up to one year ahead enhanced workers’ feelings of employmentsecurity, largely because they were aware that reforms to working time should alsohelp the company survive in the future. Management were less convinced about thebenefits of the new working-time arrangement because it added 5 per cent to the wagebill. Nevertheless, the Chief Executive of BPG felt that this arrangement was accept-able and had no significant disadvantages, and that the additional cost ‘was counter-balanced by an increase in productivity’.

As at national level, there was mutual recognition that both parties could gain frompartnership. According to the union officials, employees had come to accept thatproductivity and quality were vital for the continued operation of the company.Moreover, the trade union recognised that there were incentives to consolidate goodinter-group relations in order to reduce the likelihood of disruptions to production.Both parties felt that much higher levels of trust were now apparent in their relation-ships and that this could be used as a fulcrum for the development of bipartitecooperation and positive employment relations. The trade union president said:

As a general rule, we don’t have major problems with management behaviour. Wherever possible, wetry to reach a common solution, yet we acknowledge that in some situations we simply adhere tomanagement’s line because there is no other way of doing it.

Employee involvement provided a further stimulus to the creation of a positivepartnership culture and workers felt that the new management team were very respon-sive to workers’ suggestions. This provided the platform for a more stable and coop-erative industrial relations environment, and one respondent noted that it was possibleto discuss problems openly and candidly with managers, usually with mutual consent.Similarly, the trade union officials acknowledged that management provided muchgreater information about company performance, with ample and frequent updatings,



and even though there were fewer formal meetings between union representatives andmanagement nowadays, outcomes were much improved. One of the union officialscommented on the ‘positive advances’ from the earlier management regime. This viewof openness was also shared by the Technical Director at the firm who said, ‘the peopletrust our word . . . this is our success and that is why we moved on the working-timeagreement’.

Despite the presence of a number of factors promoting the development of part-nership, there are also several reasons that cast doubt upon its long-term viability. Asat national level, the history of employment relations at BPG was littered with negativeperceptions. The previous trade union president was castigated by some of the workerswho were interviewed, either for being taken in by management or for adopting aconfrontational stance, and it was reported that quite a number had withdrawn fromunion activity because of her. A general concern, expressed by management andechoing that of employer representatives at national level, was that employee repre-sentatives lacked experience and expertise. This was clearly associated with few oppor-tunities for workers to develop their trade union activities previously, and it wasbuttressed by negative reactions from management, some of which were still presentat the time of this research. They were accused by local management of staying ‘inert’and failing to contribute to business and industrial relations outcomes. The ChiefExecutive of BPG was especially caustic in his views about the quality of the unionrepresentatives. He said:

The quality of the trade union contribution is of trifling value. It impedes the stabilisation of bipartiterelations, by presenting claims of individual employees as if they were collective demands.

In response, the trade union officials were disappointed that management sometimesinformed them of major changes at the same time as the rest of the workforce.Moreover, it was felt that some managers took advantage of the agreement on workingtime to make adaptations to the schedules without informing, let alone involving,union representatives.

The major limitation to successful partnership came, however, from product marketpressures. Management openly recognised that workers had major concerns for theirfuture security because of mass closures of similar factories in the region over the lastfew years. Almost all the interviewed workers were anxious about the company’sfuture. As one of them said:

All the equivalent companies have been shut down . . . the district used to employ 8,000 female sewingmachinists who are now unemployed . . . these women cannot be easily be employed in other occupa-tions because they lack skills.

The situation was exacerbated because the firm was foreign-owned, and concern wasexpressed because the German parent had similar operations in several countries ineastern Europe. As the current trade union president admitted, ‘labour costs are toohigh in Greece for this kind of production and cost competition from abroad is verystiff ’. Anxieties about the effectiveness of the legal framework in the face of productmarket pressures also characterised the responses of some senior managers who feltthe required labour market changes were too inflexible to accommodate the specificneeds of BPG. In particular, management believed that the regulations did not providesufficient space for local negotiators to arrive at agreements that suited their owncircumstances. Moreover, they argued that these provisions prevented them fromengaging in mutual compromises and tradeoffs for the attainment of long-term viable



solutions for the company. In short, this demonstrates the precarious position occu-pied by the firm and it calls into question whether or not partnership in an ME iscapable of ameliorating the demands of global capital.

CONCLUSIONS

The BPG case shows how the broader parameters of partnership were shaped by thecentrally imposed institutional framework, both in terms of facilitating and hinderingits development. Central initiatives specified the exact content of the bipartiteexchange relationship and demarcated a standardised area for bilateral concessions,which no doubt helped to prevent a downward concessional spiral. The Greek gov-ernment—following the familiar path of legislative industrial relations intervention—preserved the bargaining norm of equal participation in trying to restore a balance ofpower between parties at company level. In some ways this framework acted as asubstitute for the inferior bargaining position of the union at company level and pavedthe way for the signing of the consensual working-time arrangement, which wouldhave been very unlikely otherwise. Without this minimum legal standard, workerrepresentatives would have faced difficulties in dealing with working-time issues atcompany level as a result of their lack of experience. Given a laxer institutionalframework, the oppressive demands imposed by external competitive forces and amore assertive management stance would probably have paved the way for successiveconcessions.

By contrast, it is clear that the broader institutional framework established regula-tory intervention that exceeded any bargaining outcomes that could have been reachedby the company-level negotiators and, in particular, the newly-elected union. Byproviding a detailed battery of provisions for rearranging working time this delineatedthe exact area of mutuality among the bargaining parties and the content of thesubsequent tradeoff. The new regulations incorporated a number of the union’sdemands and priorities and enabled the bargaining process on core institutional issueswithin the firm to be substituted by legal enactment. In the case of a weak or relativelyinert union presence, the law facilitated partnership by creating a comprehensiveinstitutional platform upon which to negotiate more specialised issues.

The case also raises questions about the effectiveness of partnership in the environ-ment of an ME. Evidence from both sides portrays a very positive view of theagreement, and employee endorsement of the working-time arrangements was seen asa way to delay, and maybe prevent, the closure of the company. Data collected at theworkplace reveal the positive impact of partnership upon employee well-being andupon production requirements. BPG management was constantly aware of threats toclose down production in the area, because of intense labour-cost competitionimposed by the internationalised, low-cost character of the specific clothing sector.The ‘footloose’ investment strategy and the economic devastation of the geographicalarea intensified employees’ feelings of future uncertainty. Therefore, the launch of thepartnership agreement at BPG owed more to a calculative instrumental rationale thatrendered working-time flexibilisation a ‘lifeboat’ option for both sides. The tradeoffbetween the negotiating parties was based on their certainty that the emerging out-comes—one-year job security guarantee, regular income, flexible production methods,seasonal delivery orders—from this agreement mutually satisfied their differing inter-ests and ‘outweighed the costs relative to alternative approaches’ (Haynes and Allen,



2001: 177). All parties appeared to believe that a militant bargaining stance wouldprobably have led to earlier closure of the company and, for most of them, partnershipwas considered the last effort.

Of course a more critical view would castigate the euphemism of mutuality giventhat partnership arrangements can be imposed to achieve one-sided concessions uponthe weaker negotiator (Guest and Peccei, 2001). The power of competitive forces andthe ‘invisibly’ constructed factors of contextual crisis often feature in well-organisedmanagerial tactics in multinational corporations. The use of ‘mimetic’ institutionalcomparisons by the company (Paauwe and Boselie, 2003) could be seen to fabricatean externally imposed sense of economic reality by initiating concessions in order tocompete with workers employed in similar industries in other countries. This processinitiates a trend of ‘coercive’ institutional ‘isomorphism’ between companies of similarsectoral characteristics that operate within dissimilar national contexts, and soattempts to evade national framework agreements and industrial relations legislation.Being the most powerful negotiator at the company level, management puts forwarda benchmarking policy, using this minimum standard agreement as a model of ‘bestpractice’ bargaining regulatory outcome (Marginson and Sisson, 2002).

Accordingly, the actual balance of mutuality and advantage derived from thisagreement is difficult to estimate. On the one hand, the alleged mutually beneficialoutcomes and compromises attributed to partnership may be nothing more than a‘hollow shell’, offering a spurious sense of security. On the other hand, the likelybenefits to be gained from an alternative organisational strategy of bargaining mili-tancy is more uncertain as trade union officials at local level in MEs such as Greecelack the experience and the organisational backing to instigate forms of cross-borderemployee coordination. Thus, they either rely on the safety net of more centralisedbargaining outcomes and institutional interventions or comply with the demands oftheir internationalised economic sectors. Accordingly, the partnership agreement inBPG represented at minimum a one-year job security guarantee for the total work-force. While it can be suggested that the lack of local expertise in the MEs limits theextent to which partnership can be developed at organisational level, it is also apparentthat workers would find themselves in an even more precarious position without someform of national intervention. Given recent debates at the EU level comparing thevalue of liberal and social models, this study provides some, albeit limited, supportfor the latter. Without some degree of central pressures to shape partnership at thelocal level, workers at this organisation would have had even less protection from theforces of international capital.

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Documents

Beyond the Anglo-Saxon and North European models: social partnership in a Greek textiles company