Workplace change and institutional experimentation: a case study of service-sector work in Europe

2020 – The authors, Pulignano, Thompson and Doerflinger, associated with the ETUI (European Trade Union Institute) raise the question of how the scope for union action, in the face of capital accumulation-driven changes in the workplace, is determined or limited by different institutions.

Case studies in the logistics sector
They focus on the logistics sector and did case studies at different sites of one multinational: LogCorp, in Germany and Belgium. The case studies were conducted through in-depth interviews with managers, employees from all levels and trade unionists working in the company or involved in the negotiations with the company.
The logistics sector is interesting because there is 1) an increasing uncertainty to which companies react with digitization, 2) a development of logistics from a cost item for companies to a strategic factor with competitive advantage 3) a change in the situation in which logistics operate, from ‘value chains’ to ‘value networks’.
Like so many companies in this sector, LogCorp has invested to go from “usual supplier" to “innovative partner". Their processes are lean; they plan the deployment of personnel meticulously and flexibly; they continuously monitor order flows with software; they implemented devices that facilitate order picking; they permanently measure employee performance; in parcel delivery the routes are optimized by algorithms; and employees in both branches are asked to give their ideas for improvement of processes or systems. For the employees, this can lead to an intensification of work and reduction of control and autonomy over working hours and over work sequences and work methods.

Institutional context in Belgium and Germany respectively
In Belgium there is central coordination in the negotiation of collective labour agreements, deviations from sectoral agreements are hardly possible. The union density is 54% (in 2015). The employee participation rights concern information and consultation; there are no co-decision rights. Working hours are also regulated sectoral and deviations are hardly possible. And with regard to the deployment of temporary workers, no co-decision is possible and there is no right of veto.
In Germany, collective bargaining is mainly conducted in a decentralized and uncoordinated manner. Sectoral collective labour agreements contain opening clauses. The union density is 17% (in 2016). The participation rights concern: information, consultation and co-decision, including veto. Working hours can be arranged locally thanks to the opening clauses in the collective labour agreement. With regard to the deployment of temporary workers, there is co-determination but no right of veto. 

Two strategies
The researchers conclude that there are two strategies to which trade unions should respond: 1.) “Institutional compliance" and 2.) “Institutional avoidance". 

Institutional compliance
They saw an example of the use of the institutional compliance strategy at a site in Germany. In general there has been a large reduction in the number of temporary employees as a result of legislation that requires these employees to be given equal pay as permanent workers and more security, after 9 months. Employers are therefore looking for flexibility especially in flexible working hours and the abolition of standard working hours, so that there is little or no overtime and therefore no overtime payments have to be paid. At one of LogCorps’ warehouses, the employer tried to make use of the opening clause in the collective labour agreement to adjust and make working hours more flexible. The works council thwarted this. In doing so, the works council made use of its co-decision right. The employer and works council were unable to reach an agreement and the dispute was brought before the judge. At the time of writing this article, the results were not yet known.
The researchers also found an example of this strategy of institutional compliance at a Belgian site. The employer was looking for flexibility by deploying temporary workers and making the working hours of permanent employees more flexible. But the unions had previously enforced in local negotiations that temporary workers should only be deployed in unpredictable situations and never more than 10% of the permanent staff. In addition, a temporary contract must be converted into a permanent contract after 120 days. Moreover, overtime is only allowed in exceptional cases and then for two hours. In response, management has invested in multi-skilling and job rotation.

Institutional avoidance
LogCorp founded a new legal parcel delivery entity in Germany in 2010. That company was covered by the sector collective labour agreement, but did not sign up to the favourable in-house conditions that other parts of LogCorp in Germany had. Temporary employees could get a permanent appointment at that new company. But that meant about 25% less wages, fewer holidays, more flexibility in working hours and a lower overtime pay for working at the weekend. The consequence was also a reduced solidarity between the employees of the different parts of the company.
The unions had tried to prevent the creation of a separate company, even by means of strikes. But the local unions had no mandate or veto right to stop it. Therefore, the unions decided to organize the staff in the new company and to enforce the establishment of works councils in the various parts of the company. With their employee participation rights, they enforced better employment conditions relatively quickly. This strategy was successful and LogCorp has reintroduced the separate units to its existing parcel delivery services.
In Belgium LogCorp followed a similar strategy. Here, part of the delivery was outsourced to external companies and freelancers. Worse conditions applied to these subcontractors, namely: long working hours, a high workload and lower wages. The Belgian trade unions committed themselves to regulating this. They managed to reach an agreement stipulating that 70% of the work should be done by the permanent staff of the original company. The employers agreed for fear of a bad image.


Valeria Pulignano, Paul Thompson, Nadja Doerflinger, (2020) ‘Workplace change and institutional experimentation: a case study of service-sector work in Europe’  ETUI, Transfer 2020, 26(2), 175 – 187, SAGE.
The article is attached.

Thema: Labour relations, Co-determination
Sector: Logistics
Source: Article, Cases