Vol.33-No.07 July 1,1994
Professor of Labor Law
1. Why the Debate on Unionization of Middle Managers?
Amid the prolonged recession which began in 1991, the issue of "a labor union for middle management" has emerged. The following three points may be cited as factors behind the abrupt appearance of unions of middle managers.
First, the current recession has prompted personnel adjustments, and many middle-aged and elderly workers, those in managerial positions in particular, have been shed. They are no longer privileged members of corporate society. They are either the first to be driven out of the company or will be in the same boat as other rank-and file workers. They will likely face deteriorating working conditions. If so, should they not form labor unions for themselves to defend their own interests?
Second, there has been constant talk of future trends of middle managers. With labor organizations shifting their structure away from the pyramidal type and toward the network type, it is predicted that the number of middle management positions will decline and that their role to be played in corporate society will undergo change. Is there not the need for them to defend their interests as experts on business management by uniting and organizing themselves?
The third point runs counter to the second one. The ranks of middle management have fattened in recent years, particularly in big businesses. With employees aging, attempts at offering them posts with adequate titles resulted in excess nominal middle-management staff. Can this situation be left alone as a factor likely to reduce the significance and role of labor unions?
This paper first introduces the traditional mode and concept of labor unions for middle managers, then confirms what changes have occurred in recent years and last predicts how they will develop in the not-too-distant future.
2. Why Have Middle Managers Remained Unorganized?
The labor union movement developed rapidly after WW II. As a form of organization, labor unions adopted ways of organizing regular employees in the workplace en masse, regardless of job type and position. The period from the 1940s to the 1950s witnessed many cases in which young section chiefs, who would become mainstays of the workplace as middle managers, were also active as union leaders. It was no wonder that the leader of workplace, who was highly capable, with a strong sense of justice and popular amongst fellow workers, would also display leadership within the enterprise-based union organization. Naturally, however, the companies discouraged midlevel managers' participation with labor and against the top executives. This is because middle managers are primarily to work in the interests of enterprises. Labor and management thus scrambled for human resources to be their officers.
This problem, however, was overcome as enterprise-based unions matured. The collective agreement between labor and management defined the scope of organizable workers and whose actings resulted in strife between labor and management. In consequence, at present many unions have agreements or practices which more or less restrain the right to unionize those in managerial positions, such as section chiefs and above, together with the secretary to the president, staff members of personnel departments and security guards. (Note 1).
Japan's enterprise-based unions hardly organize non-regular employees who will likely come into and out of the external labor market (When they did organize non-regular employees, they first tended to put them on the regular-staff payrolls.); nor do they organize even those regular employees qualified to be unionized who are within the internal labor market, after they have been promoted to a certain level.
What, then, is the problem with managers joining enterprise-based labor unions?
One problem is that labor and management do not agree on their interests. Fears are strong that in the labor union, managers who represent the viewpoint of the employer, once admitted to be union members, would most likely ruin the autonomy of the unions. In administering the labor union, those in managerial posts and those in general regular posts sometimes have different interests. Conflicting interests will make the union's policy determination a complicated and difficult process. The employer, for his part, did not like the idea of managers, whom they want to work in the company's interest, joining a labor union.
Second, the number of managers was, once, not so large in the pyramid-type organization, and the union did not feel that organizing managers was a "must" to secure membership fees and union members alike. In terms of leadership, those talented workers who got off the elite track often became active as union officials.
Third, we must take into account the effects of provisions specified in the Trade Union Law (TUL). The present Law, enacted in1949, when industrial relations were construed as "confrontations between labor and management," defines labor unions as "those organizations, or federations thereof, formed autonomously and composed mainly of the workers...," (Article 2). In addition, the Law does not recognize as labor unions those organizations "which admit to membership officers; workers in supervisory positions having direct authority with respect to hiring, firing, promotion or transfers; workers in supervisory positions having access to confidential information relating to the employer's labour relations plans and policies so that their official duties and responsibilities directly conflict with their loyalty and responsibilities as members of the trade union concerned; and other persons who represent the interests of the employer." (Article 2(1))
As we have seen, the way that both sides think, administration of the labor union and legal provisions went hand in hand in keeping managers at a distance from the labor union. What is more, features of the labor union were widely believed to be alien to managers. The principle of equality and groupism does not fit well with those managers trying to make their way up to the corporate ladder to the executive suite. Managers who deem themselves better-treated than general workers in terms of working conditions, authority and rank do not want to put themselves back amongst organized labor.
3. Recent Changes and Reasons for them
Many enterprises do not consider those employees that are section chiefs and above eligible for union membership. In these enterprises where the seniority-based promotion is observable, those employees deemed to have reached a certain level of ability are promoted with their seniority as one of the important indicators. The natural consequence is that they are promoted to the post of section chief before they reach the 35-45 age bracket and leave the labor union (Note 2). In short, the labor union comprised primarily of employees aged 40 and under, with this age as the divide which represents their interests.
When the economy goes into a slump, enterprises are tempted to retrench through labor-adjustment moves amongst middle-aged and older managers rather than amongst young employees. Middle managers are no longer young. They are less adaptable to change and are costly. Also, they are not in a position to negotiate from strength. On the other hand, young employees are highly flexible, can be entrusted with the future of the company and are relatively low cost labor. In addition, they are difficult to fire because they are labor union members. Many young employees secretly harbor animosity toward middle-aged and older employees who are highly paid relative to their contribution to the company and who hamper young employees' promotion. This subtly affects the way labor unions respond to management (Note 3).
Thus, middle management staff find it difficult to expect preferential treatment from the company and to keep their interests in person. Yet they cannot rely on existing enterprise-based labor unions and so, some midlevel managers join trans-corporate labor unions to try to secure their own rights and interests (Note 4). But these labor unions are so small in size as to be virtually nonexistent. They are totally different from labor unions for middle management found in Western nations.
On the other hand, what has recently drawn much attention is the policy of uniting and organizing managers at enterprise-based labor unions of major firms. They are setting forth plans to unionize those who are in fact without any subordinates but who are treated as managers and lower-echelon managers (Note 5). These plans are intended to respond adequately to the problems of middle managers and to the changing environment surrounding them, thus ensuring their interests can be protected. At the same time, this move is intended to put brakes on the declining unionization rate and to secure the influence of labor unions.
How about the employer's stance? In firms, the section constitutes the basic unit of bottom-up management, which the chief manages. Accordingly, few employers, it seems, allow the section chief to be involved in labor unions. Furthermore, employers strongly wish to be given a free hand in personnel administration, unaffected by labor unions as practical as possible. Thus, it seems that they are not happy about the idea of even nominal managers without subordinates joining the labor union. Organizing these managers will depend on how labor-management consultations and negotiations will progress.
Organizing nominal managers without subordinates poses practically no legal problems (Note 6). What is more, there is little danger that employers will intervene in middle management unions through corporate hierarchy, if they are composed only of managers who are at almost the same level (section chiefs alone, for instance) and have none of their subordinates (general employees, etc) nor their superiors (division chiefs). Thus, they could be considered to be eligible for labor union participation in the context of the norm and spirit and the letter of the TUL. Even though it will be difficult to legally obligate employers to bargain collectively and to ensure normative force to collective agreements, and, in addition, it is dubious whether going on strikes would be justifiable, the door is always kept open to formation of an association of managers outside the labor legislation (Freedom of assembly and associations in Article 21 of the Constitution of Japan).
4. A Bright Day Ahead for Middle Management Unionization?
As can be seen, the possibility is that a certain of nominal managers, particularly at the lower-echelon, will become union members depending on how labor-management relations progress. They find themselves little hinderance from the TUL to organize. They will be able to proceed to unionize especially if subject to union shop agreements. With the landscape surrounding middle-aged and older managers becoming bleaker, this will likely be a harbinger of substantial change.
Even so, it is quite doubtful whether unionization of middle managers will expand smoothly. First, employers will resist to such a move. Second, there is little hope that unions of middle managers, if they are of the regional type, will grow into a big organizations since a transverse job market for middle management has yet to be formed. Third, the union for middle managers as an enterprise-based organization consists of those with high educational attainment who tend to be individualistic, career-oriented and choosy about work. They feel incompatible with the labor movement, and it is skeptical whether they will willingly unite and organize. Sometimes they are even conscious statuswise about becoming managers and being no longer unionists. It is thus predicted that targeted managers will oppose or show indifference toward the move to form a union for managers. Fourth, very often enterprises already have an organization of middle managers alone (a social gathering in most cases) (Note 7). Accordingly, it is not easy for a union of middle managers to grow into a large and effective organization, while at the same time competing with the existing type of gathering.
No moves have yet to emerge to clarify the legal status of unions of middle management through legislation. Moreover, the current TUL does not work outright against formation of unions of middle managers. If ever the move to unite and organize middle management staff progresses legally, it is more probable that the employee-representation system (labor-management consultation system) might be legislated in some form or another, with representatives of middle managers taking part.
Thus, future prospects are that through labor-management negotiations, a segment of nominal managers will be organized as members of enterprise-based unions by becoming professionals or specialists rather than managers that lower-echelon managers will be treated as union members in terms of job content. Judging from the negative stance adopted by managers, however, it is unlikely that the move will become a powerful force. Regional unions of middle management will also unlikely be universal or large unless structural changes take place in the labor market. Even though the scope of membership for enterprise-based unions does expand, it seems highly likely that regional unions of middle managers will end up being a passing phenomenon due to such cyclical causes as the recession, for instance.
1) These agreements, the content of which should essentially be drawn up independently by the labor unions, serve to determine the scope of application of the union shop system adopted by many firms. In practice as well, they serve to determine the eligibility of middle management to be unionists.
2) According to a National Personnel Authority survey on the realities of wages at private firms (1993), the average age of middle managers is 51.1 for clerical division managers, 49.8 for branch managers, 46.1 for clerical section managers, 42.8 for deputy clerical section managers, 40.7 for clerical chiefs and 29.4 for clerks. This shows that job statuses are, as a general, allocated according to age.
3) Take Honda Motor Corp's adoption of an age-limit to the tenure-of-office system for executives and managers, for instance. The company's labor union and employees aged around 30 reportedly welcomed the news (March 19, 1994 issue of Nihon Keizai Shimbun and March 19, 1994 issue of Nikkei Sangyo Shimbun). Furthermore, according to a survey of attitudes of new recruits conducted by Sakura Bank Sogo Kenkyujo (covering 1,512 new recruits at 466 firms in March-April 1994-July 6, 1994 issue of Nihon Keizai Shimbun), 67.8 percent of new male recruits and 58.5 percent of females replied that labor adjustments (such as dismissal) especially targeted at middle-aged and elderly workers were "natural" or "inevitable."
4) Well-known examples are: the CSU (Cemedine Supervisory Union) Forum organized by about 20 managers of Cemedine, a maker of adhesives, and the Tokyo Management Union (71 managers) affiliates with the Tokyo Labour Union of Zenkoku Ippan. In January 1994 the former union, which the employer refused to bargain collectively with, raised complaints of unfair labor practices.
5) Denki-rengo (Japanese Electrical Electronic & Information Unions) is moving toward organization of middle managers. Also, a federation of labor unions at Nippon Steel (about 43,000 members), an enterprise-based organization, set forth a policy of organizing a part of the company's middle managers (about 6,000 persons). At Nippon Steel, on-site and above and white-collar chiefs and above (with college education; in late 20s and above) are now non-unionists but the union is calling for organizing them.
6) There has been a case in which a union for middle management was recognized as a labor union (Aomori Local Labour Relations Commission, December 1984). But in many cases, unions prudently treated managers as non-unionists in applications for qualification of a union (As example, umpires of the Pacific League, one of Japan's two professional baseball leagues, created a professional baseball umpire branch of Solidarity Labor Union and applied to the Metropolitan Local Labour Relations Commission to act as a conciliator for collective bargaining. The union itself excluded chief umpires from its members (December 17 morning issue of the Asahi Shimbun).
7) For instance, a social gathering of 365 middle managers recently decided to support the merger of their bank at a general meeting (June 5 morning issue of Nikkei Shimbun). As shown in the case, more often than not middle managers speak up when confronted with serious corporate management conditions.
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