Varieties of workplace dualisation: a study of agency work in the German automotive industry

• Date: 01 November 2017
• DOI: http://doi.org/10.1111/irj.12193
• Published date: 01 November 2017

Varieties of workplace dualisation: a study

of agency work in the German automotive

industry

Chiara Benassi

ABSTRACT

This article investigates the variation in workplace arrangements on agency work

across four German automotive plants. The plants differ in terms of the proportion

of agency workers, the length of their assignment, their function and their wage level

compared with the permanent workforce. The article explores how the interaction be-

tween national-level deregulation, workplace power resources and the local political

and economic context affects the bargaining outcomes achieved by works councils.

Findings rely on interviews with human resource managers and labour representa-

tives at workplace and sectoral level.

1 INTRODUCTION

In the last 30 years, atypical work has been growing in all advanced political

economies, including the so-called coordinated market economies (CMEs), which

were traditionally characterised by homogenous outcomes in terms of wages and

working conditions within the workforce (Emmenegger et al., 2012). This

phenomenon of ‘labour market dualisation’is attributed not only to structural

shifts such as technological change and the expansion of services but also to

labour market and welfare reforms supported by national-level coalitions between

employers, political parties and unions. Traditional institutions of CMEs such as

high employment protection and codetermination rights are argued to provide

incentives to unions, which typically represent the interests of the core permanent

workforce, to form coalitions with employers in support of reforms at

the expense of the peripheral workforce (Emmenegger et al., 2012; Palier and

Thelen, 2010).

This macro-level approach overlooks aspects which are fundamental for under-

standing the negotiation processes between labour and management underlying

dualisation in CMEs. By looking exclusively at national-level dynamics and institu-

tions, the dualisation literature largely neglects the role of power resources, which

are deeply rooted in sectoral and workplace structures. It focuses on the role of actors’

preferences in the process of dualisation, and especially labour preferences, rather

than on the power resources available to counteract employers’casualisation strate-

gies. Furthermore, it overemphasises the stability of cross-class coalitions, while

❒Chiara Benassi, Lecturer in Human Resource Management, King’s Business School, 30 Aldwych,

London WC2B 4BG, UK. Correspondence should be addressed to Chiara Benassi, King’s Business

School, 30 Aldwych, London WC2B 4BG, UK; email: chiara.benassi@kcl.ac.uk

Industrial Relations Journal 48:5-6, 424–441

ISSN 0019-8692

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd

compromise between labour and management ‘is dependent on the degree to which

institutions can protect it from pressures in the market’(Bélanger and Edwards,

2007: 728)—pressures that are usually felt stronger by labour at workplace than at

national level.

In order to shed light on these aspects, this article investigates the variation of

workplace bargaining arrangements about agency work across four similar plants

in the German automotive sector. Automotive is a core manufacturing sector of the

German dual economy, where collective bargaining institutions and unions are, at

least formally, still strong (Bispinck and Dribbusch, 2011) and where works councils

are claimed to cooperate with management at the expense of the marginal workforce

(Hassel, 2014). Therefore, it represents a critical case for analysing how contextual

factors and the availability of power resources affect negotiations over agency work

at workplace.

Findings will show that the cross-plant variation in workplace arrangements for

agency workers is due to the interaction between national-level institutional changes,

the local context and the power resources that labour could mobilise during the

workplace negotiations with the management. Therefore, workplace arrangements

were the primary outcomes of power dynamics at workplace rather than of labour

preferences and needed to be fought for, re-negotiated and defended. This evidence

questions the narrative of the dualisation literature about stable labour-management

coalitions (Hassel, 2014) and rather points at the ongoing micro-level conflicts

between labour and management in the increasingly fragmented and deregulated

German labour market (Streeck, 2009). This article demonstrates the value of incor-

porating workplace dynamics in national-level accounts of labour market dualisation,

thereby further developing the contribution of the industrial relations literature to

political economy debates (e.g. Doerflinger and Pulignano, 2015; Pulignano and

Keune, 2015).

This article develops as follows. The next section discusses the literature while the

third section presents the methodology. The fourth section illustrates the case studies

and the broad socio-economic context. The fifth section discusses the cases and

concludes.

2 THE ROLE OF LABOUR IN DUAL LABOUR MARKETS

Dual labour market theory explained workforce segmentation through production

and skill requirements and the political and economic resources of individual

workers (Doeringer and Piore, 1971; Osterman, 1987). Shifting the focus from the

firm to the national level, recent political economy research also claims that labour

market dualisation in CMEs is due to a combination of structural and political fac-

tors. Increasing pressure from global product and financial markets, the expansion of

the service sector and technological change caused a shift in actors’preferences and a

reconfiguration of actors’constellations at national level (Emmenegger et al., 2012).

This process led to an increasing divide between ‘labour market insiders’, who are

full-time permanent employees mainly in well-established manufacturing industries,

and ‘outsiders’, who typically are low-end service sector employees, migrants and

atypical workers. The preferences of insiders, represented by unions and social-

democratic parties, moved away from working-class interests and became compati-

ble with employers’preferences, who want to reduce production costs by

deregulating the service periphery while retaining their core skilled workers. This

425Varieties of workplace dualization

© 2017 Brian Towers (BRITOW) and John Wiley & Sons Ltd