Seven decades of industrial relations in Germany. Stability and change through joint learning processes

Date04 June 2018
Published date04 June 2018
DOIhttps://doi.org/10.1108/ER-01-2017-0016
Pages634-653
AuthorWalther Müller-Jentsch
Subject MatterHR & organizational behaviour,Industrial/labour relations,Employment law
Seven decades of industrial
relations in Germany
Stability and change through joint
learning processes
Walther Müller-Jentsch
Ruhr-Universitat Bochum, Bochum, Germany
Abstract
Purpose The purpose of this paper is to reconstruct the development of industrial relations (IR) in
Germany since the end of the Second World War and discusses the current challenges posed by economic
globalisation und European integration.
Design/methodology/approach Combining a political e conomy, identifying Germany as a coordinated
market economy (socia l market economy), and actor-ce ntred historical institution alism approach, outlining
the formation and stra tegies of the main soci al actors within a part icular institutiona l setting, the paper
draws on the broad range o f research on IR in Germany and its theo retical debates, including own re search
in the field.
Findings The legacy of the key institutional settings in the post-war era primarily the social market
economy,co-determination at supervisoryboards, works councilsand sector-based non-ideologicalunions with
their analogouslyorganised employer counterparts,as well as the dual system of interest representation has
shaped the GermanIR and still underlie the bargainingprocesses and joint learning processes although trade
unions and employersassociations have been weakened because of loss of membership. In consequence the
coverage scope of collective agreements is now somewhat reduced. Despite beingdeclared dead many times,
the German modelofa conflictual partnershipofcapital and labour has survived many turbulentchanges
affecting it to the core.
Originality/value The paper presents an original, theoretical informed reconstruction of the German IR
and allows an understanding of the current institutional changes and challenges in the light of historical
legacies. Additionally the theoretical debates on path dependence and learning processes of collectivities are
enriched through its application to the German case.
Keywords Strategic choices, Trade unions, Collective bargaining, Conflictual partnership, Corporatism,
Industrial relations in Germany, Social market economy
Paper type Research paper
Over the seven decades since the end of World War II, the German industrial relations (IR)
system has been characterised by its remarkable capacity to change and adapt to new
developments. Obviously, economic and financial crises, the structural transition from an
industrial to a service and knowledge-based economy, globalisation and financialisation, the
digital revolution and the transition from Fordist to post-Fordist production concepts,
together with the many associated structural changes in labour markets, have all left their
mark on the system, in many cases drastically. But at the same time the key IR players and
the employees and companies they represent can look back on a system which has a proven
track record of bringing order to labour markets, distributing profits and participating the
workforce, even if their coverage scope is now somewhat reduced. Despite being declared
dead many times, the German modelof a conflictual partnershipof capital and labour
within a social market economy has survived many turbulent changes although affecting it
to the core[1].
This paper describes and analyses the web of interests, institutions and organisations
shaping the German IR system, focussing on how the social partners have interacted and
learned from each other over the past 70 years. It looks at the roots and rationale of these
institutions and organisations and how they were shaped and modified by differing
Employee Relations
Vol. 40 No. 4, 2018
pp. 634-653
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-01-2017-0016
Received 22 January 2017
Revised 5 March 2017
Accepted 10 March 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
634
ER
40,4
constellations and arrangements, highlighting their ability to resolve conflicts in the face of
fundamentally divergent interests. At a higher, more reflective level, the developments are
mirrowed in the concomitant socio-political discourse and academic research.
The prose of the narrative is an implicit essay in political economy and historical
institutionalism, theoreticallyguided by several analytical concepts: first of all by the concept
of conflictual partnership as the dominant mode of German job regulation (lastly elaborated
in Müller-Jentsch, 2016) in the dual arena of collective bargaining and co-determination
(Müller-Jentsch, 2004, pp. 26-33); further by the concept of path-dependency (Thelen, 1999),
combined with the understanding of organisational learning through institutions (Argyris
and Schön, 1978) .
1. German reconstruction and post-war Fordism (1945 until the late 1960s)
At the end of the Second World War, Germany found itself faced with massive
destruction. Moreover, following its unconditional surrender, it was occupied by the
Allies. The so-called Stunde Nullgave the impression that everything that had
previously existed was now defunct and that the country was ready to go back to square
one and start again. Looking back on those years, German sociologist and unionist
Theo Pirker (1968) characterised them as a period where everything seemed possible, yet
where so little was possible(p. 10).
Though the upper echelons of the business world, the military, the judiciary and
academia had been discredited by their complicity with the Nazi regime, the sanctions
imposed onthem by the Western occupyingpowers were highly selectiveand mildly dosed[2].
As pointed out by socio-historian Hans-Ulrich Wehler, the continuity of the economic
system and the principles on which its organisation was based were in no way impaired,
being strongly defended by the merely temporarily disempowered functionaries who, in
conjunction with the Western occupying powers, were able to successfully prevent any
fundamental change(Wehler, 2003, p. 974 f.).
In the early post-war years, two important and hard-fought decisions set the course for
Germanys future pattern of IR. The first was the politico-economic decision in favour of
the Soziale Marktwirtschaft, i.e. a market economy with a strong social footing, while the
second was the statutory decision, reached under the threat of strikes, in favour of
Montanmitbestimmung, i.e. co-determination in Germanys coal mining, iron and steel
industries. However, the authorities of the allied forces had established parity
co-determination in the de-cartelised steel industry already in 1947/48 before it was put
into law in 1951.
Prior to the foundation of the Federal Republic in 1949, important decisions setting the
future course of the whole West German economy were taken in the early post-war years by
the Allies. The socialisation article contained in the Hessian constitution and the decision to
socialise the mining industry adopted by the North Rhine-Westphalian parliament had been
suspended by the US and British authorities who argued that taking such fundamental
decisions should be the prerogative of a parliament representing the whole of Germany.
In the newly constituted Federal Republic, the course was set for a capitalist regime: first,
the Währungsreform (20/21 June 1948) introducing a new currency (the D-Mark) and
the associated liberalisation of prices de facto introduced a market economy. Second, the
new German constitution, the Grundgesetz or Basic Law, came into effect on 24 May 1949.
While not giving precedence to any specific market regime Article 14 guarantees property,
Article 15 allows the possibility of socialisation on a statutory basis and against
compensation , it created many legal barriers preventing a socialist economic regime.
Third, the first Federal elections on 14 August 1949 ended with the Conservative parties
gaining power, and not as expected the left-wing SPD. They were to remain in office
until the end of the 1960s.
635
Industrial
relations in
Germany

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