world bank port reform toolkit module 7 : labor reform and related social issues
TRANSCRIPT
World Bank Port Reform Toolkit
Module 7 :Labor Reform and Related Social Issues
Module 72World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform• Key labor issues to be addressed• Organizing to address labor reform : a task force approach• The institutional framework for port reform• Developing the work force rationalization plan• International support for labor adjustment• Post-reform labor-management relations
Module 73World Bank Port Reform Toolkit
Port Labor Environment
• Overstaffing • Outdated and inefficient work rules
• Inflated Pay scales• Unreliability• Limited skills
Port Labor
Development in Logistics and
Transportation
National Economic and Trade Policies
Change in markets and services
Technological advances
Union discipline
Poor training, limited resources
Government policies to maintain or create employment
Out-dated management practices
Module 74World Bank Port Reform Toolkit
Factors Prompting Port Labor Reform
Within the port or from other ports
-Manufacturers-Exporters-Importers-Carriers
-Government support-Need to reduce government subsidies
Module 75World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform
• Organizing to address labor reform : a task force approach• The institutional framework for port reform• Developing the work force rationalization plan• International support for labor adjustment• Post reform labor-management relations
• Key labor issues to be addressed
Module 76World Bank Port Reform Toolkit
Aspects of Port Labor Potentially Affected by Reform
• Restrictions on which entities can offer services in the port• Reducing overstaffing• Rigid and outdated job descriptions and duties• Limitations on working hours and days• Inefficient overtime allocation at excessive wage rates• Hiring of port labor exclusively through the unions• Restrictions on output• Unsettled and combative workplace culture• Insufficient training and retraining opportunities• Lack of clear and meaningful productivity objectives• Inadequate occupational health and safety procedures
Module 77World Bank Port Reform Toolkit
Securing Constructive Involvement of Labor in Port Reform (1/3)
Principal areas of interest for port labor : Principal areas of interest for port labor :
• Stable and fulfilling employment
• Reasonable incomes
• Decent working conditions
• Social security and pension provisions
• Education and vocational training
• Health, safety and the environment
• Workplace democracy
• Freedom from discrimination, corruption and coercion
Module 78World Bank Port Reform Toolkit
Involving labor in port reform allows to…Involving labor in port reform allows to…
Securing Constructive Involvement of Labor in Port Reform (2/3)
• avoid mistrust stemming from the recurring conflicts between capital-labor trade-offs
• avoid inadequate and untimely preparation of port reform proposals
• find solutions to problems thanks to a trained personnel, with practical experience in port operations
• tap a source of ideas to add value to services to customers
Module 79World Bank Port Reform Toolkit
Securing Constructive Involvement of Labor in Port Reform (3/3)
Main Challenges :Main Challenges :
• Commitment from trade union leadership
• Ability to unify workers’ short- and long-term interests
• Need to improve expertise within the union
• Introduction of new trade union structures
• Finding solutions to social problems caused by privatization
• Acceptance of privatization
• Dealing with the new culture of competition
• Understanding the need for new labor relations
Module 710World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform
•The institutional framework for port reform• Developing the work force rationalization plan• International support for labor adjustment• Post reform labor-management relations
• Key labor issues to be addressed• Organizing to address labor reform : a task force approach
Module 711World Bank Port Reform Toolkit
Composition of the Task Force
• Ministries of transport, labor, finance, economics, planning
• Port Authorities
• Main port customers and users
• Private investors, terminal operators, cargo-handling companies and stevedoring companies
• Port labor
The task force should include representatives of…The task force should include representatives of…
Module 712World Bank Port Reform Toolkit
Scope of Work of the Task Force
• Undertaking or commissioning studies
• Organizing seminars or workshops
• Informing the community and consumers
• Fostering the creation of joint committees between unions and private terminal operators
• Defining government’s role with respect to ports
• Developing a workforce rationalization plan
Module 713World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform
• Developing the work force rationalization plan• International support for labor adjustment• Post reform labor-management relations
• Key labor issues to be addressed• Organizing to address labor reform : a task force approach• The institutional framework for port reform
Module 714World Bank Port Reform Toolkit
The Institutional Framework for Port Reform (1/3)
-Economic regulatory reform -Decentralization
- Job education and experience requirements- Training courses
Objectives Labor’s Participation
Meeting Commercial NeedsMeeting Commercial Needs
Defining the Relationship between Governments, Ports and LaborDefining the Relationship between Governments, Ports and Labor
Objectives Labor’s Participation
-No involvement of governments in • port-labor relations• collective negotiations• informal dispute resolution
- Negotiation- Suggestion of measures to improve productivity- Facilitate the work and reduce costs- Share decision authority
Module 715World Bank Port Reform Toolkit
The Institutional Framework for Port Reform (2/3)
Fostering CompetitionFostering Competition
Objectives
-Application of antimonopoly law
Labor’s Participation- Ensure fair use of market
mechanisms and no abuse of port operators’ market power
Redefining the concept of social equityRedefining the concept of social equity
Objectives
- Commercial opportunity-oriented approach
- Training programs- Occupational health and safety- Collaborative process to select and introduce a new equipment
Labor’s Participation
Module 716World Bank Port Reform Toolkit
Timeframe for Port Labor reformTimeframe for Port Labor reform
The Institutional Framework for Port Reform (3/3)
-Within the term of a single public administration
-Before concessions/investments are marketed and requests for bids tendered
Module 717World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform
•International support for labor adjustment• Post reform labor-management relations
• Key labor issues to be addressed• Organizing to address labor reform : a task force approach• The institutional framework for port reform• Developing the work force rationalization plan
Module 718World Bank Port Reform Toolkit
Gathering the Information needed to Draw Up the Plan (1/2)
• Port master plans and strategic goals for the short, medium and long terms
• Estimates of required activity levels
• Demographic information about the current port workforce
• Current staffing levels
• Estimates of minimum staffing levels
• National and local laws about labor rationalization
• Collective bargaining and employment agreements
Module 719World Bank Port Reform Toolkit
•Training needs and skills of workers who will be seeking alternative employment
• Existing government and private sector organizations capable of assisting with training, retraining and job searches
• General information about the overall national and regional macroeconomic situation, existing employment patterns, labor absorption capacity, skills and experience of the workforce
Gathering the Information needed to Draw Up the Plan (2/2)
Module 720World Bank Port Reform Toolkit
Alternatives to dismissals
• Normal attrition of the workforce : retirements, deaths, resignations
• Part-time employment, flexible working hours, reduction in working hours, variable workweeks, job sharing, overtime restrictions
• General or job category-specific hiring freezes
• Sharing of reductions in hours of work and pay
• Work rotation among other government departments
Module 721World Bank Port Reform Toolkit
Elements of a Staff Retrenchment Program
• Compensation, with incentives, for early retirement and voluntary separation
• Compensation for involuntary separation
• Provision of training and demand-driven retraining
• Guidance and assistance in job searching and outplacement
Module 722World Bank Port Reform Toolkit
Pitfalls in Designing and Implementing Severance Packages
• Paying too much
• Adverse selection : the best employees leave, the worst remain
• Revolving door : re-hiring of employees after the reform
Module 723World Bank Port Reform Toolkit
• Applying rules of thumb to identify overstaffing or insufficient productivity areas
• Reversing the sequence : (1)Identify the services to be cut ; (2) identifying the specific overstaffed jobs and chasing away “ghost” workers, and (3) offering a severance package to those targeted to leave
• Develop alternatives to the standard severance package, to keep the best employees
Ways to Shrink Smartly
Module 724World Bank Port Reform Toolkit
Rationalizing the Workforce (1/2)
• Pre-reform/privatization
Advantages
-“cleaner” business decision presented to potential concessionaires and investors, reduction of their uncertainty-the government pays for its previous decisions (overstaffing, rigid work rules…)-less disruption to port operations
Drawbacks
-Too little cut from the workforce, because of political pressure-Under-optimized cutbacks, severance packages and lack of incentives to retain the best personnel
Module 725World Bank Port Reform Toolkit
Rationalizing the Workforce (2/2)
• Post-reform/privatization
Advantages- Decisions are efficiency-minded and profit-oriented
Drawbacks- Uncertainty and risk for investors => lower concession or selling price- More likely pursuance of industrial actions by port labor
- Give the operator the freedom to determine the firm’s required number of staff and skill mix
A piece of advice…
Module 726World Bank Port Reform Toolkit
Who should pay for Offsetting Dislocation Expenses ?
• Governments, as former employers
• The private sector, as new employers
• Port customers, as beneficiaries
Module 727World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform
• Post reform labor-management relations
• Key labor issues to be addressed• Organizing to address labor reform : a task force approach• The institutional framework for port reform• Developing the work force rationalization plan• International support for labor adjustment
Module 728World Bank Port Reform Toolkit
Main Programs and Funding Sources
• World Bank support : Technical assistance Conditional direct financing for severance payment Poverty alleviation programs
• Training support from International Labor Office PDP (Port
worker Development Program) or from UNCTAD (United Nations
Conference on Trade And Development):
General education, broad industry-focused vocational training Specific job instruction Communication and social skills courses Health, safety and environmental training
Module 729World Bank Port Reform Toolkit
Labor Reform and Related Social Issues
• Context for Labor Reform• Key labor issues to be addressed• Organizing to address labor reform : a task force approach• The institutional framework for port reform• Developing the work force rationalization plan• International support for labor adjustment• Post reform labor-management relations
Module 730World Bank Port Reform Toolkit
Post-reform labor-management relations
• Cooperation and communication of labor and management (joint committees, participation of workers in workplace decisions)
• Balance of commercial goals of employers with social goals of their employees
• Agreement of all stakeholders about the proposed changes in labor regimes, collective agreements and work practices