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Public Sector Unions

The findings, interpretations, and conclusions expressed on this Web page are entirely those of the author(s) and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the information included here and accepts no responsibility for any consequence of its use.

Civil servants are often described as the most fearsome opponents of state reform, and not without some justification. First, civil servants have a direct stake in the outcome of any reform that would reduce the number of state workers and/or change standards for job stability and performance. Second, and equally important, civil servants are typically organised, a characteristic that can transform these actors into a formidable political force.

In practice, however, civil servant unions have often been crucial partners in administrative and civil service reform. This participation can be invaluable. Without some degree of "buy-in" from civil servants, the state faces a thorny principal-agent problem. The nature of this relationship makes it very difficult for the principal (the government) to compel compliance with reforms. Foot-dragging and a myriad of other subtle forms of obstruction can readily undermine administrative and civil service reforms. Similarly, unions and their members possess a large amount of privileged information that can assist greatly in the design and implementation of an effective reform.

The following text presents the viewpoint of a civil servant union representative. It was authored for this site by Mike Waghorne, Assistant General Secretary of Public Services International.

"We should be clear from the outset: public sector trade unions exist to serve the interests of their members and to represent those interests in whatever forum is appropriate – including the World Bank, where Public Services International (PSI) has been active for several years as both a partner and adversary. PSI is an international trade union federation for 20 million public sector trade union members in 145 countries. Do we support civil service or public sector reform? Are we willing to promote reforms, alone or with the Bank and/or individual governments? It depends.

Largely, it depends on whether governments and international institutions are prepared to treat public sector unions as genuine partners and negotiate such reforms in search of win-win results. The evidence demonstrates that governments that are prepared to do this will typically find in public sector unions willing partners who are very active in promoting reforms and modernisation. This kind of partnership has a long history in the Nordic countries, Germany, the Netherlands, Ireland, Australia until the 1990s, and South Africa since the ANC government came to power.

That the choice for a partnership lies totally in the hands of governments is vividly illustrated by New Zealand. Throughout much of the 1980s and 1990s, governments were not the least bit interested in talking with trade unions. In fact, the National Party governments from 1990-99 eliminated the term "trade union" from their industrial relations legislation. The re-election of a Labour-led government in late 1999 has prompted an immediate about-face: on 1 May 2000, the new Prime Minister, Helen Clark, in an act filled with symbolism, publicly signed a Partnership for Quality Agreement with the largest public sector trade union, the New Zealand Public Service Association. Similarly, the 1999 UK Minister of Health signed a similar deal for the health services in the UK with UNISON, an event highly unlikely under the previous government.

So, if governments wish to engage trade unions in building support for public sector reform, they hold the solution in their own hands. Not that this means that signing a piece of paper is the final act. In Denmark, for example, for decades trade unions have been full partners with governments of all colours. The Danish unions call this relationship one of "offensive co-operation." What this means is that, so long as the government (or other employers) treat trade unions as full and equal partners, then anything can be put on the negotiating table because there is trust that it will be respectfully negotiated with the aim of achieving a mutually acceptable outcome. But if the government/employer breaks the dialogue or acts unilaterally, then the unions reserve the right to resort to other means to protect their members’ interests.

In May 2000, at the UN Global Forum on Local Governance and Social Services for All, some delegates from countries that outlaw completely freedom of association and collective bargaining for civil servants asked: How do we get civil servants at the central level to move to the provinces and municipalities when they might lose position and access to services in the capital? There is every reason to believe that these were honest and sincere senior policy makers really looking for a solution to the problem. When a trade union representative at the conference suggested that they might care to sit down with representatives of these workers and negotiate salary packages, removal conditions, housing or education allowances (if necessary), there was a look of consternation on their faces. How could they possibly negotiate such issues given their governments’ stance vis-à-vis civil servant unions?

PSI cannot say that all of our current and potential members and their unions can play a positive role in building a support base for public sector reform and modernisation because in some cases no such unions are allowed to exist; in other cases they are tolerated but not allowed to bargain over anything; and in other cases, whilst the technical right to collective bargaining exists, the government is not interested in involving unions anyway. In other instances, however, unions have been active and willing partners in such reforms and have gone out to their members and community groups with education programmes and organising campaigns to engender such support from their members.

For several years PSI has been trying to convince the Bank that, when it is promoting privatisation or administrative reforms for governments which seek its assistance, it should encourage governments to involve trade unions in the discussions from the outset. When PSI has attended staff seminars on these issues, some staff were quite explicit: they didn’t like trade unions and they were unconvinced that unions were something to be encouraged; but if involving unions earlier in the process could stop these troublemaking workers from going on strike against privatisation or reform measures, then alright, bring them in. The challenge now, from PSI’s perspective, is to get the Bank to encourage governments to do the same. Perhaps governments will do it for the wrong reasons at first. But if they find that involving unions in an honest and full dialogue solves problems, then maybe they can learn that it’s worth doing across a wide array of issue areas as a matter of course."

PSI’s website addresses public sector reform issues and provides access to publications on privatisation and deregulation, economy and finance, and international trade. You may subscribe to any of PSI’s regular publications from the website.

Recommended readings:                                             

  • Douglas, Joel M. 1991. "Public Sector Labor Relations in the Twenty-first Century: New Approaches, New Strategies." In Carolyn Ban and Norma M. Riccucci, eds. Public Personnel Management: Current Concerns – Future Challenges. New York: Longman.
  • Freeman, Richard B. 1986. "Unionism Comes to the Public Sector." The Journal of Economic Literature XXIV (March): 41-86.
  • Fretwell, David H., Malcolm Lovell, and Robert W. Bednarzik. 1991. "Employment Dimensions of Economic Restructuring: A Review of Related Labor Policies and Programs in Industrialized Countries." Population and Human Resources Division, MENA, World Bank, Washington, D.C.
  • Public Services International. 1995. "A Public Sector Alternative Strategy." Policy, Practice, Programme Series (PPP 1995.1), PSI.
  • Public Services International. 1999. "Public Services in a Globalised Economy: The PSI Alternative Strategy Revisited." Policy, Practice, Programme Series (PPP 1999.2), PSI.
  • Strebel, Paul. 1996. "Why Do Employees Resist Change?" Harvard Business Review 74(3): 86-92.
  • Waghorne, Mike. 1999. "Public Sector Trade Unions in the Face of Privatisation." Development in Practice 9 (November): 557-567.

The body of this page  was authored by Mike Waghorne, Assistant General Secretary of Public Services International.  The page was introduced by Jeffrey Rinne of the World Bank.  It was submitted on 5/10/00.