‘Commodifying institutions’: vertical disintegration and institutional change in German labour relations

The article analyses the impact of vertical disintegration on German labour relations. Previous research argued that the proliferation of outsourcing, divestment and non-standard employment results in a ‘dualism’ between a core of secure workplaces and a growing fringe of precarious jobs. Evidence from two key sectors, metalworking and telecommunications, however, suggest that this clear-cut division is replaced by a fragmented landscape of labour relations. In terms of institutional change, the analysis reveals a specific form of incremental transformative change, namely a shift in the meaning of formally stable legal-political institutions. Even in the allegedly stable core areas, the institutions of labour relations are gradually transformed from market-constituting institutions to market-dependent variables. Vertical disintegration plays an important role in this process of institutional commodification. It not only moves the core–periphery boundary; it is also deployed to subjugate collective bargaining, workplace co-determination and the utilization of labour law to firm-level economic calculations.