Comparative Employment Relations: India vs Germany

This essay provides a comparative analysis of employment relations in India and Germany based on government structure, ideology, employer practices, legal mandates, and experience of work. It discusses the role of state and non-state actors in regulating employment relations, the variety of capitalism followed in the chosen nation, and the themes of employment relations. It also highlights the legal mandates and experience of work in both countries. Get solved assignments, essays, and dissertations on Desklib.

Running head: COMPARATIVE EMPLOYMENT RELATIONS
COMPARATIVE EMPLOYMENT RELATIONS
Name of the Student
Name of the University
Author Note

1COMPARATIVE EMPLOYMENT RELATIONS
Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
Introduction......................................................................................................................................3
Background..................................................................................................................................4
Government Structure, Ideology and Employer Practice........................................................6
Variety of Capitalism followed in the chosen nation (LME/CME)........................................6
Globalization and the Role of the Actors................................................................................7
Themes.............................................................................................................................................7
Legal Mandates..........................................................................................................................10
Experience of Work...................................................................................................................11
Recommendation: Convergences and Divergences.......................................................................12
Convergences.............................................................................................................................12
Divergences...............................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................15

2COMPARATIVE EMPLOYMENT RELATIONS
EXECUTIVE SUMMARY
The employment relations with regard to the concept and the most basic understanding of
the concept that can be provided consists of the coherence between the employers and the
employees for the purpose of maintaining a healthy organizational culture that is conducive to
the growth and the development of the organization as well as the stakeholders of the
organization. The comparative analysis of the employment relations are particularly beneficial
for the managers and for the purpose of upgrading the standards of the method of working of the
organization on part of the managers and for the employees it can be an opportunity for the
purpose of choosing the nation to work and have a good work life balance. Thus the need for
comparative employment relations is for the sake of enhancing the work experience both from
the part of the organization and also on part of the employees. The comparison in this regard
shall be of India and Germany to show which nation is more conducive to working.

3COMPARATIVE EMPLOYMENT RELATIONS
Introduction
There is a difficulty in providing an appropriation of the definition of the concept of
Employment Relations as different thinkers have tended to provide different understanding with
regard to the concept and the most basic understanding of the concept that can be provided
consists of the coherence between the employers and the employees for the purpose of
maintaining a healthy organizational culture that is conducive to the growth and the development
of the organization as well as the stakeholders of the organization (Martin & Bamber, 2004).
As per the views of Martin and Bamber (2004), there are certain common themes that the
academic enquiry of International Economic Relations deal with which comprise of, the role of
the State in the Employment Relations, the Degree of the autonomy exercised by the
management at the enterprise level, the role of the employee collective representation and the
role of collective bargaining. These are the most important elements and the common elements
that are harped upon in the theorization of the International Employment Relations (Martin &
Bamber, 2004). The need for comparative employment relations is for the sake of enhancing the
work experience both from the part of the organization and also on part of the employees (Frege
& Kelly, 2013).
This particular essay shall be dealing with the comparative analysis of the employment
relations that exist in India and in Germany on the basis of the four basic pillars of
conceptualizing of the employment relations as pointed out by Martin and Bamber (2005) and
they include, , the role of the State in the Employment Relations, the Degree of the autonomy
exercised by the management at the enterprise level, the role of the employee collective
representation and the role of collective bargaining. Apart from that for the purpose of a

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conceptual clarity, several theories, and factors in shaping the idea of international employment
relations shall be discussed.
Background
History
The chosen nations, Germany and India have had to undergo a lot of political troubles in
order to arrive at their current state of statehood that is known to the world in the contemporary
world. Germany was formerly known as the Kingdom of Prussia and had been united into a
politically integrated and unified nation state after the Franco Prussian War in 1871. Post the
Second World Germany was divided into East and West Germany and was reunified into a
single nation once again after the fall of the Berlin Wall and the disintegration of USSR (Maass
& Shifrinson, 2017).
India was never a nation-state as it is now, but a loose confederation of kingdoms
occupying the entire geographical contiguity which is in modern day considered as the Indian
Sub-continent. It was only after the British colonial occupation that India had been introduced to
modernity and the drawing of the border of the modern nation-state of India had been done. In
the year 1947, India had gained her independence from colonial rule and had gained her
sovereign rights (Watson, 2016).
Post independence, several Transnational Regulatory Bodies, especially the
Brettenwoods Institutions such as ILO, World Bank, WHO have been proactive in the chosen
nations in helping the economies of the chosen nations, and the chosen nations are also members
of the orrganizations. The World Bank had helped Germany to rebuild her economy post the
Second World War and today the nation is the thirdmost important stakeholder in the
organization. The World Bank had also helped India recover from the financial crisis of 1991

5COMPARATIVE EMPLOYMENT RELATIONS
and as a developing nation, India looks up to the organization for help in form of loans (Lipscy,
2015). Apart from the World Bank, the ILO also helps in the economic and social matters of the
chosen nations. The ILO is responsible for the setting up of the labour laws of the nations since
they are members and the labour laws of the ILO enables Germany and India to fulfill their
corporate social responsibilities alongside economic gain. Germany being a developed nation is a
major contributor to the WHO in enabling the nation to be champion the cause of enhancing the
physical health conditions of the world and India being a developing nation receives a lot of help
from the WHO in settling the health and sanitation issues especially in the rural areas. The three
Transnational Regulatory Bodies, ILO, World Bank, WHO play a key role in monitoring the
social, economic and health related concern of Germany and India and also documents them
accordingly (Lipscy, 2015).
Government Structure, Ideology and Employer Practice
With regard to the government structure both the nations chosen Germany and India are
democratic Republics and are capitalistic economies following the principle of laissez faire
economy owing to the fact that both the nations have private sectors. From the economic
perspective, the chose states are capitalistic, but that however does not imply that the principle of
communism which calls for equitable distribution of resources, equity and equal access of
resources are not present in the chosen nations. Thus, both capitalistic and communist ideologies
coexist within the capitalistic economic framework. However that does not imply that the
employment relations and the employer practices are not subject to scrutiny by the government
since both the nations believe in upholding the principle of accountability and responsiveness to
general public for the purpose of upholding the principle of welfare state (Wheeler, 2017).

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Variety of Capitalism followed in the chosen nation (LME/CME)
From this particular point of the comparison and contrast of the employer practices, the
government structure, and the ideology of capitalism and communism, the discussion shall now
focus on a contrasting analysis whether Germany and India follows Limited Market Economy
(LME) or Coordinated Market Economy (CME). In a LME, the enterprises are free from any
governmental interference and are free to take any business decision as per their wish. A CME is
also a system where the government interference in minimal in business affairs and the
enterprises are free to take their business decisions, but the factor that sets the CME unique is the
fact that the managing body of the enterprises tend to take decisions by means of various
channels and the labour and the government are important channels whose contribution to tge
decision making process is important. Based on the discussion on the comparison and contrast of
the employer practices, the government structure, and the ideology of capitalism and
communism, it becomes clear that both Germany and India follows CME system as the
enterprises are free to take their business decisions but the governmental regulations should be
adhered to for the sake of safeguarding the rights of the labour (Hall & Soskice, 2001).
Globalization and the Role of the Actors
The advent of capitalism and the opening up of the nations to the global market and the
role of both the state and non state actors in regulating the employment relations had taken place
due to historical changes in the nations. Germany under Hitler was not open to the globalized
world and followed a policy of protectionism in economic matters. However after the defeat of
the Axis powers in the second world war that Germany was divided into two sections, East and
West, the former followed communism and the latter capitalism, during the period of Cold war.

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Thus West Germany was the first one to open up to the globalized world and allow the state as
well as the non state actors to regulate economic matters than East Germany (Wheeler, 2017).
In India, until the Gulf War and the Financial Crisis of 1991 that the nation had not been
open to the globalized world and followed a policy of protectionism in economic matters. The
Economic Crisis had been the reason why India had opened up to the globalized world, and the
private and the public sector, that is the non state and the state actors respectively had started
working in tandem with each other in solving economic matters of the nation (Wheeler, 2017).
Themes
The concept of Employment Relations as discussed by John R Commons had been highly
influence by his personal experience of instability which he had witnessed. The transformation of
an industrial society into a post industrial one had been marked by a series of economic problems
which tended to affect the global market negatively. The advent of the post industrial method of
production had led to the downsizing of the labour as the labour intensive industry had been
replaced by industries which relied more on the intellectual labour rather than the physical
labour, as witnessed in the United States of America. The aim of the theorization of Employment
Relations of Commons thus had been to protect the interests of the workers from being
downsized and exploited. Commons had thus provided the idea that the need for the intervention
of the government into the corporate affairs is necessary for the sake of ensuring a healthy
employment relation between the employer and the employees. Thus the philanthropic touch in
shaping the theoretical understanding of employment relations provided by Commons is very
much evident. This particular understanding of Commons has been quite instrumental in the

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formulation of the Labour Laws which seeks to protect the rights of the workers from being
encroached upon by any form of jeopardy (Wood & Goddard, 1999).
Kerr had in his theorization had based his ideas upon the need for a workplace relations
act or law as per the situations that prevailed in Ireland. He had witnessed that the need for a
employment rights had to be created as the prevailing bureaucratic method of seeking redressal
for the purpose of violation or some form of disruption of the process of work at the workplace.
There were huge number of strikes whereby the work process was affected severely and thus
Kerr had through his theorization of the employment relations act sought to put an end or provide
a method of resolving the conflict at workplace as a result of strikes. Thus the rectificatory
approach in shaping the concept of employment relations had been the most important
contribution of Kerr which can be manifested in the Workplace Relations Act of 2015 passed in
Ireland which sought to deal with the issue of workplace relations between the employer and the
employees (Barry & Wilkinson, 2011).
The theorization of Dunlop about the Employment relations can be called as an
appropriation of the ideas provided by Kerr and Commons. Dunlop has included in his
theorization the importance of both the labour management authority and the government in
determining the employment relations in a workplace. Borrowing from Kerr, Dunlop had also
harped upon the proactivity of the management as well in shaping the need for a healthy
workplace relations that shall be conducive to the growth and development of the employees and
the employers as well equally. The rectificatory approach in shaping the concept of employment
relations had been the most important contribution of Kerr and that is very much an integral part
of the theorization of Dunlop. In the theorization of Dunlop thus employment relations comprises

9COMPARATIVE EMPLOYMENT RELATIONS
of the centrality of labour, management and the government has been maintained (Farnham,
2017).
Legal Mandates
The German state even though it permits the flourishing of the laissez faire economy and
the growth of the private sector, but it however ensures that the rights of the labours are not
violated at any cost and which is why there is a well defined body of labour laws which fixes
working hours, minimum wage and the patterns of leaves and other entitlements of the labours
which are to be equally followed in all German federating units by both the government and the
private enterprises. Thus there is a uniformity of the labour laws of Germany, whereas in India
the labour laws are not unified and they do not apply equally to all sectors. There are a total of 45
national laws and there are about 200 state laws dealing with employment relations which means
that in India the Employment relations do not have a fixed basis as they vary and the possibility
of violation of the labour rights are rampant in India than in Germany (Ford & Gillan, 2016).
Experience of Work
The German state allows autonomy of the management to take their business decisions as
long as they are not violating the general benefit and the rights of the labour. However, new
businesses are encouraged as long as they abide by the German legal set up. On the other hand in
India, the management exercises exercises complete authority with regard to taking business
decisions and that can sometimes lead to violation of the labour rights as well. Opening of new
business is however a big problem in India as the nation suffers from the problem of license
procurement and that is a big deterrent to the opening up of new businesses in India owing to the
high level of corruption. The degree of autonomy is thus more in Germany than in India (Hayter,
2018).

10COMPARATIVE EMPLOYMENT RELATIONS
Germany has a strong culture of setting up labour unions and is very much permitted by
the constitution. The same prerogative is also there in India but that is a legal principle which is
rarely followed in all sectors of the employment structure in India, for example the corporate
sector lacks unions and the private sector usually does not encourage the formation of the labour
unions and even challenge the legitimacy of such organizations. Thus from this it becomes clear
that the Indian state is not conducive towards the formation of the labour unions in practice even
though it is legally permitted by the Indian constitution to form assembly and even labour
unions. Thus in this regard it can be said that Germany fares better than India (Ng, 2017).
Recommendation: Convergences and Divergences
Convergences
Both Germany and India follows CME system as the enterprises are free to take their
business decisions but the governmental regulations should be adhered to for the sake of
safeguarding the rights of the labour (Hall & Soskice, 2001).
Both the nations tend to follow a mixed economic system whereby they follow a mixture
of both capitalism and communism. The government structure both the nations chosen Germany
and India are democratic Republics and are capitalistic economies following the principle of
laissez faire economy owing to the fact that both the nations have private sectors. From the
economic perspective, the chose states are capitalistic, but that however does not imply that the
principle of communism which calls for equitable distribution of resources, equity and equal
access of resources are not present in the chosen nations (Wheeler, 2017). Thus, both capitalistic
and communist ideologies coexist within the capitalistic economic framework, and that implies

11COMPARATIVE EMPLOYMENT RELATIONS
that both the employment relations of both the nations are guided by the model provided by
Dunlop (Wheeler, 2017).
Divergences
There are areas of divergences in the employment relations between the nations as well.
There is a uniformity of the labour laws of Germany, whereas in India the labour laws are not
unified and they do not apply equally to all sectors. There are a total of 45 national laws and
there are about 200 state laws dealing with employment relations. It means that in India the
Employment relations do not have a fixed basis as they vary and the possibility of violation of
the labour rights are rampant in India than in Germany as per the views of Ford & Gillan (2016).
With regard to the opening up of new business it can be said that new businesses are
encouraged as long as they abide by the German legal set up. On the other hand in India, the
management exercises exercises complete authority with regard to taking business decisions and
that can sometimes lead to violation of the labour rights as well. Opening of new business is
however a big problem in India as the nation suffers from the problem of license procurement
and that is a big deterrent to the opening up of new businesses in India owing to the high level of
corruption. The degree of autonomy is thus more in Germany than in India (Hayter, 2018).
From the perspective of Unions it can be said that the Indian state is not conducive
towards the formation of the labour unions in practice even though it is legally permitted by the
Indian constitution to form assembly and even labour unions. Thus in this regard it can be said
that Germany fares better than India (Ng, 2017).

12COMPARATIVE EMPLOYMENT RELATIONS
Conclusion
Employment Relations is as such a subjective affair which differs from one nation to the
other and studying the international employment relations needs to be done on a comparative
basis. The comparative analysis of the employment relations are particularly beneficial for the
managers and for the purpose of upgrading the standards of the method of working of the
organization on part of the managers and for the employees it can be an opportunity for the
purpose of choosing the nation to work and have a good work life balance. Thus the need for
comparative employment relations is for the sake of enhancing the work experience both from
the part of the organization and also on part of the employees .Thus from the above discussion it
becomes clear that Germany fares better than India in terms of employment relations. With
regard to the role of the State in the Employment Relations, the Degree of the autonomy
exercised by the management at the enterprise level, the role of the employee collective
representation and the role of collective bargaining, Germany fares better than India. This is not
to provide a destructive criticism of India and glorify Germany, rather to show that both
Germany and India has potential to grow and develop.

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