EXECUTIVE SUMMARY
This report contains key situational factors with the emphasis on employment relations in Germany. The major aim of this report is to identify and analyze the impact various situational factors on Germany’s employment relations systems. The report will cover the four major factors that affected Germany’s employment relations. The report will give an idea as to how German economy progressed or went through a transition period from the World War II up until the merger of the European Union.
INTRODUCTION
The connection between workforce/workers and authority and how this is legal in a particular period of the society’s economic and social growth is what is called employment relationship. A critical measurement of the employment relationship is how the authority of the employer over the employee is legitimate. (BOOK). This legitimate authority of the employer over the employee is quite apparent between countries, particularly between Anglo-Saxon countries and the European countries. This difference has emerged due to divergences in en each countries political, economical and legal system (Book).
Since this assignment focuses only on Germany, hence we shall examine the employment relations in Germany. The country has gone through a lot of political and economical uproar in its history since the World Wars began. This report will state the key situational factors that Germany as a country has witnessed. The three main factors that had the most amount of impact on the German public and the economy are,
World War II
The re-unification of east and west Germany
The introduction of the European Union.
All these three key situational factors had a startling impact on the Germany’s employment relations. Each of the three key situations had there own adverse effect on the German economy.
The report will now investigate the challenges both faced and posed by the German model of employee relations when it is confronted by these three key situational factors that plagued the country.
WORLD WAR II
During the Second World War, which was a worldwide conflict fought between the Allied Powers and the Axis Powers, from 1939 until 1945, Germany was divided into two main countries; East Germany and West Germany. During World War II West Germany was with the Alliance whereas East Germany followed the soviet kind of economy.
TRADE UNIONS AFTER WORLD WAR II
After the Second World War Germany went through a lot of important employment relations factors. Up until the Second World War Adolf Hitler, had abolished Trade Unions in Germany. It was only after the Alliance had won World War II did Trade Unions once again reformed in Germany. In 1946, 15 unions were founded in Soviet controlled part of Germany, later on in 1947, 12 unions were founded in the British controlled part of Germany (http://en.wikipedia.org/wiki/German_Confederation_of_Trade_Unions#History)
The unions were being formed back, and although tight bureaucratic control of the labour market could not be totally abolished, but it was mainly replaced by the collective bargaining of the unions. (http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA6,M1, pp10)
The main issue for the unions during those days was to place emphasis on the labour legislation. This included high degree of demand on working conditions, dismissals and co-determinations at the plant-levels (http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA6,M1, pp5)
The first major issue that the unions collectively fought for, was the plans for the establishment of a unified national insurance scheme. This was significantly crushed by those advocating the differentiation of workers and employees schemes. ((http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA6,M1, pp13)
Following this a political strike, by the unions, a law was introduced in regards to partial wage continuation in case of sickness, thus narrowing the gap between workers and employees entitlements ((http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA6,M1, pp53)
There fore we can see that this was a big step forward for the trade unions in Germany.
LABOUR MARKET DURING THE SECOND WORLD WAR
The next major issue was about the labour market and the workforce characteristics. The first few years after the World War II were bitter years in the German history. Everything from their lands, to their property lay in ruins. There were millions of people on both sides of Germany that were below the poverty line.
Just after the war it was estimated that there were close to 5 million people estimated to be unemployed. (Some name). In 1950 Germany had its biggest unemployment in terms of percentage, it accounted for just about more than 10% of the total population (http://econ161.berkeley.edu/Econ_Articles/ucla/ucla_marshall2.html). Although both East and West Germany had a high rate of unemployment, the western part of Germany was actually better equipped to counter this. What followed was the Western part of Germany’s economy growing quickly and efficiently during the 1950’s (http://www.iies.su.se/publications/seminarpapers/616.pdf). This was mainly because the federal government at that time came up with income maintenance schemes. This schemes were introduced to prevent and poverty and to provide other social securities (http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA53,M1, pp55). The German government had a policy of full-employment. The scheme was that no person should fall below the poverty line. This helped as the percentage of unemployment in Germany kept decreasing. Since the 1950 and eventually started stagnating in the 1960’s. (http://econ161.berkeley.edu/Econ_Articles/ucla/ucla_marshall2.html)
During the 1950’s the initially very high level of unemployment could be reduced continuously, as the number of openings in the labour market expanded much more than what was actually expected. (http://books.google.com/books?hl=en&lr=&id=GaWtd5zJfB8C&oi=fnd&pg=PR5&dq=employment+relations+in+germany+during+world+war+2&ots=Riuvyr5B1R&sig=n1YjoQ6b6TFZk2qNK9U-8KmvoRs#PPA53,M1,pp 51).
With full employment guarantees, during the early post- WWII this caused unemployment to decrease but on the other hand inflation started to rise. This made the German authorities in the 1960’s forced to adopt a more anti-inflationary policy (http://econ161.berkeley.edu/Econ_Articles/ucla/ucla_marshall2.html)
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