Journal of Industrial Relations current issue

Corporate Ownership, Governance and Employment Relations

Pendleton, A., Westcott, M. — 2009-09-16

Are Superannuation Funds and other Institutional Investors in Australia Acting Like 'Universal Investors'?

Marshall, S., Anderson, K., Ramsay, I. — 2009-09-16

This study investigates whether Australian superannuation funds and other institutional investors are concerned with the human resource management (HRM) and industrial relations (IR) practices of companies. It examines whether they use indicators of HRM or IR practices in their investment decisions and whether they attempt to influence these types of practices through other means, in the same way that investors are now doing so regarding corporate governance issues. The study finds there are embryonic signs of investors doing both. However, the ad hoc nature of engagement as well as significant information barriers, reduce the efficacy of this engagement.

Corporate Governance and Training

Goergen, M., Brewster, C., Wood, G. — 2009-09-16

This article uses the notion of national recipes of corporate governance to explore national differences in the provision, extent, range, cost and arrangements made for training by employers. Drawing on an extensive database, careful analysis shows that there are significant differences between the liberal market economies and others in their employer training provision and systems. The research also highlighted considerable differences in practice in coordinated market economies, most notably between the social democracies of the Nordic countries and the Rhineland continental economies. The data also shows evidence of the embeddedness of training systems in the society and the industrial relations systems in which they operate: there are a limited number of clusters of countries that retain distinctive features. These clusters broadly correspond to the five different models of capitalism identified by Amable (2003), with differences encountered being generally on the lines predicted by the latter.

Private Equity in the UK: Job Regulation and Trade Unions

Clark, I. — 2009-09-16

Private equity represents a ‘new actor’ in the British business system with the capacity to have a significant impact on industrial relations. However, while private equity and its associated business model appear as significant factors in corporate governance and industrial relations, neither the sector nor the business model has been evaluated theoretically or empirically. Indeed, for the UK at firm level the ways in which business strategy and job regulation are shaped by private equity are unclear other than by references made to institutional configuration in the business system — short-termism. This article outlines what private equity is, details its associated business model, describes how the sector affects workers and summarizes how trade unions have responded to the private equity business model.

The Impact of Private Equity and Buyouts on Employment, Remuneration and other HRM Practices

Wright, M., Bacon, N., Amess, K. — 2009-09-16

In this article we consider the impact of private equity and buyouts on employment, remuneration, and other human resource management practices by reviewing and synthesizing existing studies. We show that the impact tends to differ between buyouts and buy-ins, and argue that private equity is a heterogeneous phenomenon. Several issues that would benefit from further research are identified including the relative impact on employment, terms and conditions and job quality for managerial and non-managerial employees.

Private Equity: Levered on Capital or Labour?

Folkman, P., Froud, J., Williams, K., Johal, S. — 2009-09-16

This article argues that, during the 2002—7 conjuncture, private equity was levered on capital, not labour. During this period of rapid up-scaling the sources of the gains were variable and included financial engineering and windfall trading gains. In general terms, the favourable conditions of cheap and available debt meant that restructuring at the expense of employment conditions was not a necessary, or even important, part of all private equity deals. The first half of the article reviews the narrative and numbers on the employment effects of private equity, highlighting the counter claims of different narrative positions and the heterogeneous nature of the evidence. The second part of the article presents an alternative view of private equity, arguing that the change in conjuncture after the credit crunch that began in 2007 will mean that different sources of gain become more important.

Private Equity in Australia

Westcott, M. — 2009-09-16

Private equity investment in Australia has changed in both extent and nature over the last few years. In particular, transactions where a private equity fund buys out a mature publicly listed company have increased. The targeting of ‘iconic’ companies such as Qantas by private equity heightened the concerns held in some quarters of the possible impact of private equity ownership on corporate stability and employment conditions in these companies. This article provides an overview of private equity transactions in Australia. It also reviews the major concerns with the private equity business model, which were presented by various parties to a senate enquiry in 2007. It argues that a window of opportunity was open during 2006 and 2007 for private equity owners to extract returns on their investment by reducing employment costs using the Work Choices legislation. That such an approach was not pursued suggests that private equity funds realize returns through a number of avenues, not just by reducing running costs or rationalizing productive assets.

Private Equity and American Labor: Multiple, Pragmatic Responses Mirroring Labor's Strengths and Weaknesses

Beeferman, L. W. — 2009-09-16

This article briefly describes the recent growth of private equity, details some of the challenges such growth has posed for American labor, and outlines ways in which labor has chosen to respond. In so doing it suggests that the diverse, complicated, and practical choices labor has made to date have been shaped by the particular strengths and weaknesses of its position in American society. More particularly, these choices place the emphasis on (1) legislative change, relating mainly to tax rather than regulatory policy (labor-related or otherwise); (2) capital strategies, by which unions and pension funds engage companies in connection with corporate governance and investments that might be made in or withheld from them; and (3) high-profile campaigns relating to the reputation of private equity firms and their investee companies (as compared to traditional means of securing union recognition or exercising collective bargaining rights).

Australian Health and Safety Inspectors' Perceptions and Actions in Relation to Changed Work Arrangements

Quinlan, M., Johnstone, R., McNamara, M. — 2009-09-16

Extensive international research points to an association between changed work arrangements, especially those commonly labelled as contingent work, with adverse occupational health and safety (OHS) outcomes. Research also indicates these work arrangements have weakened or bypassed existing OHS and workers’ compensation regulatory regimes. However, there has been little if any research into how OHS inspectors perceive these issues and how they address them during workplace visits or investigations. Between 2003 and 2007 research was undertaken that entailed detailed documentary and statistical analysis, extended interviews with 170 regulatory managers and inspectors, and observational data collected while accompanying inspectors on 118 ‘typical’ workplace visits. Key findings are that inspectors responsible for a range of industries see altered work arrangements as a serious challenge, especially labour hire (agency work) and subcontracting. Though the law imposes clear obligations, inspectors identified misunderstanding/blameshifting and poor compliance amongst parties to these arrangements. The complexity of these work arrangements also posed logistical challenges to inspectorates.

Using Public Procurement to Promote Better Labour Standards in Australia: A Case Study of Responsive Regulatory Design

Howe, J., Landau, I. — 2009-09-16

The former Federal Coalition Government’s industrial relations reforms restricted the capacity of state governments to make labour law, inspiring them to consider more innovative ways of regulating labour standards in the private sector including through greater use of public procurement. This article presents a case study of a program in which an Australian state government has sought to use its purchasing power to regulate labour standards in the cleaning industry. The authors assess this program against a model of responsive regulation. They suggest that there is potential to extend this model to other areas of government procurement.