Partnering with Trade Unions to Boost Competitiveness

1. Partnering with Trade Unions to Boost Competitiveness Stephen Olieka Director of Human Resources Mumias Sugar Company

2. Contents • Introduction – Before Trade Unions • Trade Unions • Benefits • Challenges • Partnering with Unions • Existing Mechanisms • Partnerships

3. Introduction - Before Trade Unions

4. Before Trade Unions • Before the emergence of trade Unions, work conditions were very poor: • Long hours • Low pay • Few benefits • Dangerous and poor work environments • Few rights – no power to influence decisions about own job

5. Trade Unions

6. Trade Unions • In the UK Unions emerged during the Industrial Revolution but became legal in 1867 • In the US unions emerged in the 1870s • In Kenya the Trade Unions Ordinance enacted in 1937 - allows Africans to organize themselves in Trade Unions • COTU established in 1965 • Kenya currently has 34 unions affiliated to COTU and 5 not affiliated to COTU

7. Trade Unions • Union is a group of workers who have come together to make collective decisions • Union is democratic – members elect their leaders through an elective process • Through Collective Bargaining their elected leaders negotiate with their employer over: • Wages • Working conditions and hours • Safety and Health • Other benefits

8. Industrial Relations Charter • Product of Tripartite Meeting of 4th May 1976 consisting of: • Government of the Republic of Kenya (Minister of Labour) • Federation of Kenya Employers • Central Organization of Trade Unions (K) • Recognizes the importance of consultation and cooperation to the efficiency and productivity of an undertaking or enterprise

9. Objectives of Industrial Relations • To improve peace and stability in industries • To secure the interests of both parties. • To enhance industrial democracy – involve employees in decision making • To enhance collective bargaining • To minimize or eliminate disputes, strikes, lock outs • To increase productivity of the enterprise

10. Benefits of Trade Unions • Benefits for workers include: • Satisfactory rates of pay. Research shows unionized workers get better levels of wages • Protection of workers jobs - union members are less likely to be dismissed. • Securing adequate work facilities • Satisfactory work conditions, includes areas such as health and safety and equal opportunities. • Negotiating bonuses for achieving targets

11. Challenges

12. Challenges • Lack of flexibility – union workers work set hours, must take specific breaks irrespective of workload • Difficult to multiskill workers – each worker has one role – will not carry out any task outside current job • Communication is a challenge – must go through union reps • Not easy to fire problem employees

13. Challenges • Union contracts inhibit the effectiveness of a team – CBA may fix number of allowable absences or sick-offs • Fairness – equal provision of benefits to everyone at the same level (union) vs fair reward for hard work (employer) • Adversarial approach and “fighting over the spoils” does not take into account the sustainability of the business

14. Employers’ Challenge “When the growth of the economy is slow, the cost of living goes up and employees’ purchasing power is eroded. It is hard to remember that enterprises operate in the same environment…….the employer has to consider productivity and sustainability of the enterprise” Jacqueline Mugo, CEO - FKE Management Magazine October 2013

15. The Case of British Airways • “Pilots accept pay cut to ‘save’ British Airways’ Mail Online – Daily Mail 14th July 2009 • “BA Pilots to accept 2.6% pay cut” BBC News (www.bbc.co.uk) 13th July 2009 • They also accepted 20% cut on allowances • Other employees agreed pay cuts, Job cuts (>2000), unpaid leave and to work for nothing.

16. The Case for Management to Partner • Strategy making has evolved over the years; • Competitive Advantage (Industry Forces Model) • But who has any competitive advantage not replicable? • Resources Based View • How do you manage Resources in a dynamic external environment • Dynamic Model of Strategy • No certainties – only probabilities – that evolve and change in real time • Trust and Collaboration – New theory

17. Partnering with Unions

18. Partnering with Unions • Use existing mechanisms to engage the union on business related issues; • Departmental Development Forums (DDF) • Joint Consultative Committee (JCC) • Joint Industrial Council (JIC) • Approach the union as a business partner; • Union not an adversary anymore • Forge a strong working relationship • Formalized through a partnership agreement

19. Use Existing Mechanisms

20. Departmental Development Forums (DDF) • HoD and section managers meet with union reps • Monthly meetings to discuss; • Performance of departments including projects • Welfare of employees • Records management • Training of employees • Tools of work • Medical services • Challenges and way forward

21. Joint Consultative Committee (JCC) • Corporate level monthly meetings between management and union reps • Discuss high level issues; • CBA implementation • Employee welfare, reward and benefits • Safety Health and Environment • Tools of work • Can be used to discuss overall business performance, challenges and remedial actions

22. Joint Industrial Council (JIC) • Corporate level meetings between management and senior union officials • Usually less frequent i.e. once a year • Convened for high level joint activities such as CBA negotiation • May be convened in times of business crisis

23. Union as a Business Partner

24. Management-labour Partnerships • Can take various forms; • Co-ownership and co-management of the enterprise; • Partnership forum comprising of representatives of management, unions and non-unionised workers; • Works council comprising management and trade union representatives; • Management-union review councils; • Management-union non-crisis meetings; • An informal open door policy.

25. Objectives of Partnership Agreements • Objectives at the enterprise level should be to: • transform the labour-management relations from adversarialism to partnership • build trust between management and trade unions; • Contribute directly to productivity and competitiveness of enterprises

26. Objectives of Partnership Agreements • Establish standards for the development of human resources and labour-management relations; • Consensus building within the enterprise; • Incorporate international labour standards within the workplace

27. Contents of a Partnership Agreement • Partnership is a formal agreement signed between management and the union defining; • Parties to the agreement • Purpose of agreement • Shared commitments • Establishment of partnership forum • Commitment of Management

28. Contents of a Partnership Agreement • Commitment of Union • Guiding principles • Relationship with CBA • Legal status of Partnership Forum • Amendments to the agreement • Commencement and duration of agreement

29. Trust Building • Trust enhancers include; • Sharing of information, esp. corporate financial information; • Team work; • Investing in employee training and development; • Equality of status and equity at the bargaining table; • The involvement of workers in decision making; • Mutually acceptable operating principles or working agreements to guide corporate policy;

30. Trust Building • Perceived credibility of the company’s management in the eyes of the union executives and employees; • Quality of leadership exercised by managers and union representatives; and • Absence of political interference in the affairs of the company.

31. Contents • Introduction – Before Trade Unions • Trade Unions • Benefits • Challenges • Partnering with Unions • Existing Mechanisms • Partnerships

32. Personal Philosophy “I refuse to accept the idea that man cannot influence the unfolding events that surround him” Martin Luther King, Jr.

33. References • http://www.ilocarib.org.tt/Promalco_tool/productivity-tools/manual04/m4_3.htm • http://www.revisionguru.co.uk/business/unions.htm • http://www.mindtools.com/pages/article/managing-unionized.htm

34. Any Questions?