The approach to assessment

The assessment will be conducted at two levels. At level one, based on the available data on the size of the labour force and union membership, each privatised enterprise will be examined as to

its union membership density by comparing its pre-and post-privatisation records. At level two, the union membership density of the four privatised enterprises will be compared and contrasted with the union density in the two State-owned enterprises in order to determine whether the nature of ownership has any correlation with the level of union membership density.

First, however, in order to gain a basis of comparison of the views at enterprise level it was considered desirable to have an overview of the general impression and perception on issues of trade unionism by the social partners at the national level. With this objective in mind, the views of the representatives 104 of the national association of the employees (CETU) on the one hand and the employers’ organisation (EEF) on the other were received in order to take them into account when evaluating the findings of the case studies.

One of the leaders of CETU was therefore interviewed105 _{to obtain his reflections on the current}

status of trade unionism in Ethiopia. His perception is that trade unionism, in Ethiopia, is currently at crossroads and exposed to very challenging condition. He classified the challenges into two types-legal and practical ones.106 _{Incidentally, it should be noted that CETU has been}

the single confederation of an umbrella organisation of the employees and it comprises nine federations.107

He began to explain his concern on the subject from what he considered to be problems with the law. According to him, one of the problems in the labour law is the way ‘managerial employees’ have been classified and regulated under the law. He stated that he understands why those designated as ‘managerial employees’ should not be allowed to be members of those trade unions in which membership is open only to non-managerial employees. The management staff at the enterprises basically represents and protect the interests of the employers and hence a

104_{Semi-structured interviews were conducted with the representatives of the national associations. However, these}

personalities may tend to view facts in light of the interest of their respective associations and hence partisanship would be expected, as a result, their views need to be considered critically.

105_{Interview with a member of the top leadership of CETU at the Head Office of the CETU, Addis Ababa, on 21}

October 2009

106 _{During the interview, it was known that this key informant had training in law at the level of LL.B. degree.} 107_{The nine sectoral Federations are: Federation for Transport and Communication Workers; Federation for Food,}

Beverage and Tobacco and Allied Workers; Ethiopian Banking and Insurance Industrial Federation; Federation of Tourism, Hotels and Generic Services Workers; Federation of Commerce, Technical , Print and other Workers; Federation of Energy, Chemical and Petroleum Workers; Industrial Federation of Ethiopian Textiles, garment and Shoe Workers; Ethiopian Federation of Metal, Wood, Cement and other Workers; National Federation of Farm, Plantation, Fishery and Agro-industry. The nine federations are composed of around 768 first level trade unions with a total membership of more than 350,000 employees.

conflict of interest may arise if they were to join trade unions representing the workforce, as result of which their exclusion from union membership of the non-managerial employees is understandable. In fact, the ILO is not also against such exclusion as long as the managerial staff is allowed to establish an association of its own. However, the way labour law defines ‘management staff’ and thereby excludes them is very broad in that even employees who genuinely are not engaged in managerial functions will be categorised as members of the management staff (Proc. No.377/2003, Art.3 (2) (c)).

This broad definition of the management staff has, in his opinion, the effect of dispossessing trade unions of their potential members from amongst the better educated employees because employers tend to assign such employees to team or group leadership and other supervisory tasks. Due to this, he is of the view that trade unions at enterprise level are becoming associations of the ‘blue collars’ who cannot convincingly articulate the interest of the labour force during consultations and negotiations. Consequently, trade unions are less skilled and weak in bargaining, more of confrontational than a cooperative engagement, thereby gaining no or minimal concession from their respective employers. In his view, failure of trade unions to obtain better concession paves the way for reduced interest in unionisation and confidence in union activities by the labour force.

This may be taken as a valid concern from the interest of labour point of view. However, from the employers’ point of view, the management team need to be strong in order to maintain workplace discipline and productivity, thereby competitiveness. One way of enabling the management team to strengthen its position is to give it an opportunity to have a wider pool eligible for managerial recruitment. This could be taken as one of the areas where the law became investment-friendly. Furthermore, even if the law allows the managerial employees to join trade unions, literature indicated (Slomp, 1996:48) that ‘white collar’ employees, where most managerial employees are categorised, have been less enthusiastic to join unions as many of them aspire to be promoted to managerial position. The CETU representative seemed to have failed to take note of these issues in his assessment of the law.

The other significant legal problem identified by the CETU representative is the provision of labour law that permits the formation of multiple unions in an enterprise (Proc. No.377/2003, Art.115). Earlier labour laws had adopted ‘unitary union’ policy. He admitted that allowing the

formation of diverse unions may be considered an aspect of freedom of association. Nevertheless, he was of the view that in countries like Ethiopia which do not possess a well- established democratic culture and where employee levels of literacy are low there can be problems. Unrestricted freedom may have undesirable consequences in that solidarity and unity of the workforce can be put at risk through proliferation of unions by over-emphasising on differences thereby igniting inter-union rivalry. He cited incidents where the law that allowed the establishment of diverse unions in the workplace has led to fragmentation of the labour force.108 Similarly, Fashoyin (2008:8) documented the inter-union friction that the ‘plurality paradox’ brought into the Zambian labour movement. Whether ‘diverse unions’ policy is a well-founded fear in bringing about adverse effect on unionisation will be empirically examined later in the case studies.

At the practical level, he stated that he had received numerous reports from the various federations of trade unions complaining that trade union leaders and organisers at the privatised enterprises were put at risk. He said that trade union leaders and union organisers were put under close surveillance by the management and at times had been dismissed from employment by the mere fact that they happened to be union members or organisers.109_{According to his observation,}

labour inspection services, though empowered by law to monitor labour law compliance, have not been helpful in this regard due to alleged resource and manpower constraints. Therefore, he concluded that the existing law and its implementation and enforcement appeared to be unfavourable for trade unionism. Those concerns of the labour community, he stated, were being raised repeatedly with the employers’ associations and government officials at tripartite consultation levels and with top government officials including the Prime Minister.

In order to obtain a balancing view from the employers’ side, an executive official at the Ethiopian Employers’ Federation110 _{(EEF) was interviewed. According to his observation, the}

108_{Trade unions at Adey Ababa Yarn Factory, at Bole Printing Press and Dashen Brewery were considered by him}

to be victims of the policy of diversity of unions in that multiple unions put the unity and solidarity of the labour force at risk.

109_{At the level of the formal legal framework, trade union leaders have been protected from any unfavourable}

treatment by the employer in connection with their union membership or leadership (Proc. No 377/2003; Art. 14 and 26). The protection against anti-union discrimination has been reinforced by sanctions to the extent of reinstatement even against the objection of the employer (ibid; Art. 43(1)).

110_{Interview with a former senior expert at the Ministry of Labour and Social Affairs, a ministry that handles labour}

and social issues. He is currently a member of the executive team of the Ethiopian Employers’ Federation (EEF). (Interview conducted on 08 November, 2010 at his office in Addis Ababa).

general tendency was that although employers cannot openly declare a ‘no union policy’ at workplaces due to legal prohibition,111 _{many private employers do not want to see unions}

established in their work premises for a number of reasons.

As a principal reason he stated that employers constantly fear and have the perception that when a trade union is established in an enterprise, employees cultivate a sense of disobedience to managerial instructions the result being a watering-down of a superior–subordinate relationship with loose discipline at workplaces prevailing instead. Employers are of the view that trade union leaders speak about their members’ rights without pin-pointing the duties of the employees simultaneously. Moreover, he recalled that during the military regime, trade unions were closely associated and affiliated with the then government which was basically against private sector development. Due to such an unpleasant memory of the past, private employers are generally sceptical towards trade unions.

In his view, employers strongly believe that they should have full and absolute prerogative over the management of labour, a derivation from their ownership of the enterprise and their managerial prerogative over employees emanating from the very nature of the employment relationship. He stated that many employers are suspicious that when trade unions are established and operate at their enterprises, unions will attempt to limit the exercise of their prerogatives. On the other hand, he did not dismiss the likelihood that, though not large in number, some employers still have the tendency to treat employees with a master and servant mentality, thereby inclined to have unfettered power over their employees. It is interesting to recall that although the status of slavery was abolished by law in 1942 in Ethiopia, Seyoum and Teferra (see, p.29) recorded their observation that the labour relation was mainly a master and servant relationship in the 1960s and this informant again suggested a similar attitude to exist in the 21st _{century. It}

seems that the change in the law did not bring about a change in social behaviour even in a prolonged period.

The Federation was re-established in 1997 having previously been dissolved by the military government in 1975. Currently the association has 132 employer members.

111_{The Ethiopian Penal Code of 2004 under Art 601(1) (a) provides that ‘whoever by intimidation, violence, fraud}

or any other unlawful means prevents a person from exercising his civil rights granted by the Constitution or other laws is punishable with simple imprisonment not exceeding three years, or fine.

Another reason advanced by him was that, at times, employers consider trade union leaders to be exclusively interested in the short term benefit of their members even to the detriment of the very existence of the enterprise. In this connection he recalled his own experience as a former expert at the Ministry of Labour and Social Affairs whereby a particular trade union, the morning immediately following its formation, submitted a request to the employer for collective bargaining with a proposal requesting for substantial additional benefit to the members of the union without bothering to inquire as to the soundness of the financial standing of the enterprise. Owing to this type of experience, many employers have the impression that trade unions have been self-centred and focused on short term benefits. In a sense, from his observation, many employers have the view that trade unions are there not for the strategic benefit of the union members but rather for the short term interests of personal or group gain.

Finally, he raised an economic reason as to why employers dislike trade unions. Industries in Ethiopia suffer from comparative disadvantage in relation to their competitors due to, amongst other things, their outdated machinery, low labour productivity and poor managerial organisation and hence producing goods of low quality but high in price. In connection with comparative disadvantage of Ethiopian products, a World Bank study recorded the following observation:

A typical worker in Ethiopia is (…) about more than 1.5 times less productive than the average Chinese worker. A total of 34 per cent of total productivity gap between Chinese and Ethiopian workers can be explained by the fact that Ethiopian factory workers are less equipped and less educated, while the bulk of the total labour productivity shortfall in accounted for by technology (Determinants of Private Sector Growth in Ethiopia, 2004:21)

Being in such a disadvantageous position, unionisation may aggravate the deficiency in competitiveness by enabling the labour force to collectively demand additional benefits, thereby increasing the cost of labour. As a result, employers would like to avoid extra labour cost that might arise from unionisation. However, the contention that low labour cost bring about competitiveness is itself contentious. The alternative view is that low labour cost may lead to de- motivation and low morale of the employees that then result in low productivity as a result of which competitiveness will be lost.

With the perspectives outlined above in mind, the balance of the chapter will focus on comparison of the status of unionisation and union density both within and among the enterprises

under study. We will return in Chapter 8 to consider the implications of some of the more general perspectives referred to above - some cultural, others historic-for the specific legal and employment issues examined in this thesis.

Section I. Pre-and Post-Privatisation Comparison of Union Presence and Density