Capability Theory, Employee Voice and Corporate Restructuring: Evidence from UK Case Studies

This paper is concerned with the relationship between enterprise structure, the sectoral environment of firms, and the regulatory framework provided by laws on employee information and consultation, in establishing the conditions for the effective exercise of employee voice – ‘capability for voice’ – in the context of corporate restructuring. The concept of ‘capability’ suggests that the well being of the members of a given group should be evaluated by reference to their capacity to achieve a set of subjectively valued states or activities, ‘functionings’, through which their potential, not just as economic agents but also as citizens, can be realised (Sen, 1999). Against the backdrop of a knowledge economy, this approach implies a shift away from an employer-centred notion of ‘employability’, in which workers are provided with the ability to respond to the changing demands of firms and organisations, to one in which the capabilities of individuals themselves are enhanced through participation in employment. Our study provides evidence on how far the organizational strategies of UK-based enterprises and the conditions in which those firms operated supported, or alternatively detracted from, the exercise of a particular kind of capability for voice in the period following the implementation in the UK of the European Union Directive of March 2002 on the information and consultation of employees (the ‘I&C Directive’). To this end, we look at a range of experiences in firms in three industrial sectors, chemicals, financial services and retail, using evidence drawn from interviews with managers, workers and other relevant actors, and material derived from documentary and public sources. Section 2 provides a brief overview of the legal and industrial relations background to the UK implementation of the I&C Directive. Section 3 outlines the theoretical framework of our study, developing the idea of the capability approach in this context, and describes our research methodology. Section 4 presents the empirical results, focusing in turn on the process of establishing I&C arrangements, the structural and operational dimensions of I&C agreements, and their operation against the backdrop of corporate restructuring in the UK economy of the mid-2000s. Section 5 concludes.