Project leader: Simon Deakin
Research Fellow: Aristea Koukiadaki
Research Associates: Catherine Barnard and Frank Wilkinson
Project Dates: 2007-11
Funding: European Union Sixth Framework Programme

Update on progress: November 2010

Aims and Objectives

This project is funded by the Sixth Research and Development Programme of the EU and coordinated by the IDHE-Cachan unit, based near Paris. The main contribution of the CBR has been to undertake a series of case studies of employee information and consultation mechanisms in the context of corporate restructuring. The members of the CBR team have also carried out work on the impact of transnational economic integration on the operation of labour standards at national and sectoral level, including an analysis of the law and practice relating to local labour clauses, and have worked on developing the theoretical framework for the project, which is draws on capability theory. The empirical parts of the project were completed in 2010 and the project concludes in 2011.

Results

A major initial focus on the research was on the lessons to be drawn from the construction of the new Terminal 5 building at Heathrow airport. The work built on a theoretical framework which stresses 'internalist' approaches to learning and governance based on the importance of communicative processes, dialogue and deliberation. Material drawn from an in-depth case study on the construction T5 was deployed to examine the development and impact of learning both within and between the subsystems of corporate governance, utilities regulation, multi-firm contracting and industrial relations in large construction projects. T5 took around 20 years to plan and build and started operations in March 2008, six years after construction started. Its opening was marked by confusion and controversy, but as a construction project, however, T5 was highly successful. It was based on a novel approach to risk-sharing between client and suppliers and it incorporated innovative mechanisms for dialogue and monitoring between the actors involved, that is, the client, BAA, the contractors on the construction and engineering sides of the project, and trade unions representing the groups of workers involved. There is evidence that these arrangements contributed positively to a number of successful project outcomes, above all the completion of the construction work on time and on budget, an above-industry health and safety record, and virtually no time lost to disputes. The case of Terminal 5 demonstrates how attempts to build a 'systemic' approach to the project revolved around the interactions between a wide range of actors and processes and beyond the contractual arrangements. However, case shows that in the absence of mechanisms of structural coupling between different subsystems, the capacity for adaptation along the lines of a dynamic learning model is reduced. Although the difficulties surrounding the opening of T5 in March 2008 were unconnected to the construction of the new Terminal, the wider future of the institutional mechanism used to promote cooperation and risk-sharing in the construction project is in doubt, in part because the model it embodies was not taken up for the 2012 London Olympics.

Building on the T5 study, a wider set of case studies was then undertaken, looking at the role of employee consultation arrangements in corporate restructuring, as influenced by the implementation of the Directive 2002/14/EC through the UK Information and Consultation (I&C) Regulations 2004. A qualitative case study approach was adopted with a view to examining changes in companies where I&C arrangements were introduced or existing structures amended in light of the I&C Regulations. Case studies were conducted in companies operating in the financial services, business services, voluntary, chemical and retail sectors of the UK economy. The study involved data collection based on a combination of semi-structured interviews with key actors (i.e. senior and human resource managers, employee representatives, and trade union representatives and officials), non-participant observation of meetings between management and labour (where possible), and analysis of relevant documentary material, such as I&C agreements, minutes of meetings, documents disseminated to the workforce and trade union statements and communications. The objective was to highlight the influence of the form and content of the implementing legislation on the development of social dialogue procedures. The capability approach was used to draw attention to the relationship between the legal-institutional framework and the development of the 'opportunity' and 'process' aspects of the 'capability for voice' of the I&C arrangements. Over 70 interviews were carried out as part of this work, which was completed in 2010.

We found that in almost all cases where I&C arrangements were involved in restructuring, decisions to proceed to restructuring were made by management acting unilaterally. Consultation with employee representatives was confined to the process of handling job losses. I&C arrangements were not seen by management as having a role in strategic decision-making. In most cases, the formal announcement of management proposals for restructuring was also marked the start of the consultation process, excluding any possibility for consultation to take place at a point when proposals were still at a formative stage. Employee representatives described the outcomes of consultation as ranging from 'mutually acceptable' arrangements, through 'acceptance of the inevitable', to a feeling among employees that 'managerial prerogative has been imposed on them.' Opportunities for employee representatives to open up new areas of social dialogue with management on an on-going basis were limited. As a result of the denial of a preferred role for trade unions within the I&C Regulations, possibilities for creating 'thick interactions' between the union channel and the newly created universal channel of employee representation were significantly constrained. Where trade unions had previously had an established a role in discussions with management, I&C arrangements tended to adopt the unions' approach towards the restructuring. In only a few cases had the introduction or amendment of I&C arrangements enabled unions to address a broader agenda than previously.