Trade unions and employment relationship in privatised state enterprises : a case-study of the finance and petroleum industries in Nigeria

Abstract

Privatisation (defined as change of ownership and control of State-owned enterprises- SOEs) is a controversial economic and political policy that elicits diverse opinions and academic conclusions on its impact. With regard to its impact on industrial relations, the privatisation literature concludes that in most privatised SOEs, problems anise between unions and management over some important dimensions of the employment relationship. This Author's search of the privatisation literature led to the emergence of two hypotheses, as follows: I. The employment relationship changes in its expression and management in privatised enterprises as a consequence of the change in ownership and control, structure and product market competition arising from privatisation; and, 2. The employment relationship in privatised enterprises changes, not necessarily as a consequence of privatisation, but as a consequence of changes in managerial/corporate strategies, national and firm-level industrial relations policies and other environmental factors not related to privatisation. Data was collected from two privatised finance SOEs and one privatised petroleum SOE in Nigeria to test these hypotheses. Some key findings emerged which differ slightly from the conclusions of the privatisation literature, as represented by these two hypotheses. First, the study concludes that contrary to the conclusion of the privatisation literature, the observed changes in the employment relationship of privatised SOEs are mediated by the different effects of environmental and sectoral factors, economic centrality, the nature of the unions involved in bargaining and the balance of bargaining power between unions and management, as determined by the development context of the country concerned. Secondly, the study concludes that contrary to the conclusions of the privatisation literature, the employment relationship in privatised enterprises changes as a consequence of changes in managerial/corporate strategies and fin-n-level industrial relations strategies directly related to privatisation. These conclusions suggest the need to slightly modify the conclusions of the privatisation literature and theory to take account of the economic, institutional and political differences between developing and developed economies, rather than seek to apply similar theories and conclusions to both development contexts like is currently the case