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Unit 7: Industrial Relations

other. Bargainable issues are dealt with under collective bargaining and non-bargainable Notes
ones under joint consultation. Where during joint consultation some issues become bargainable
(which could happen in relation to matters on which it is not clear whether they are
bargainable ones or not), they will be transferred to the collective bargaining forum. It is
also an important characteristic of the joint consultation system that it does not handle
individual grievances, which are dealt with under grievance handling procedures.
Joint consultation has made a significant contribution to enterprise level labour relations by
creating mutual understanding on a range of management issues which impinge on the lives
of employees. This in turn has had an impact on collective bargaining, which tends to take
place in an atmosphere in which workers have been informed of management objectives,
so that the areas for misunderstanding and conflict are considerably reduced. In effect,
therefore, collective bargaining takes place from a point which has achieved some degree
of common objectives. Since information on wage criteria is also shared, differences in wage
negotiations (which in most countries are highly contentious) are narrowed, facilitating
acceptable compromises and negotiations without disputes. Joint consultation has motivated
employers and employees to generate gains and to share them for their mutual benefit.

In essence, joint consultation has become the means through which information is shared;
mutual understanding is promoted; participation in arriving at decisions is facilitated; and
working conditions negotiated. As such, it is an essential part of Japanese enterprise level
labour relations. The enterprise level union system significantly contributes to the workability
and effectiveness of the joint consultation system.

7.4.4 Other Communication Mechanisms

The industrial relations system at the enterprise level several other channels of
communication exist such as small group activities (59 per cent of unionized and 45 per
cent of non-unionized firms); grievance procedures (45 per cent of unionized and 13 per
cent of nonunionized firms); suggestion systems (62 per cent of unionized and 47 per cent
of non-unionized firms); shop floor meetings (67 per cent of unionized and 68 per cent of
non-unionized firms).

Quality circles, introduced in Japan in the early 1960s, had increased by the early 1990s to
over three hundred thousand groups covering about 2½ million workers. A quality circle
is a small group which performs quality control activities in the workshop to which it
belongs. These groups, consisting of about 5-8 workers per group, are generally found in
the larger enterprises. Their role is:
“To continually engage in managing and improving the conditions of the work place
through self-development and mutual development under the participation of all members
as a part of companywide quality control movement. The birth of quality circles in Japan
was spearheaded by moves to initiate quality control after the end of World War 11. Such
moves included training programs on the technical and managerial aspects of quality
control, and the application of statistical principles to quality control (SQC). While it is true
that quality circles were originally established for the purpose of ensuring employee
participation in the process of quality control, its present scope of activity is not restricted
to quality control. Instead, the focus of quality circles has broadened to include quality
improvement, cost reduction, productivity and efficiency improvement.”
The impact of quality circles is reflected in improved organizational performance, increased
opportunities for employees to fulfil higher order needs which are not satisfied through
normal routine work, and higher levels of motivation.

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