Employer/Employee Relationships 1.4.1

Employer/Employee relations - are the defining features of how employers and employees interact with each other on a day to day basis.

Employee representation - are the systems put in place to aid communication between employers and employees.

Individual approach - suits many employees nowadays, because many people with scarce skills find that they can benefit from dealing independently with their employers

Collective bargaining - suits employees in large organisations where the employer is likely to treat all employees doing the same kind of work in the same way. Usually in collective bargaining the workforce is being represented by a trade union.

Trade unions - exists to represent employees in situations where group action is more effective than any individual can be. Typically trade unions represent specific occupations e.g. RMT, which includes many people working on the railways and London Underground, or certain types of work - Unison represents mostly public sector employees.

Industrial dispute - exists when there is a disagreement between the employer and the employee or employee representative

Industrial action - is when the employees take sanctions to try and impose pressure on the employer.

Work council - A formal meeting of employer and employees to consider issues affecting the business and workplace

EMPLOYEE REPRESENTATION

Employee representation arises when employees are part of a formal structure for involving them in the decision-making process of a business.

Employment law in the UK requires employers to involve employees in the following;

1. Proposed redundancy schemes
2. When employees are transferred from one employer to another (e.g. the sale of the business)
3. On changes to pension arrangements
4. Proposed changes to working time arrangements.

It also makes a good business sense to involve employees in a range of other decision making processes. A formal system of employee representation helps:

• Make employees' views known to management
• Strengthen both employers and employees understanding of workplace issues and other matters affecting the business
• Create an atmosphere of mutual trust between employees and management and therefore improve workplace relations.

ADVANTAGES 

• Increased empowerment and motivations of the workforce
• Employees become more committed tot he objectives of the business
• Better decision making because employee experience and insights taken into account.
• Lower risk of industrial disputes
• Effective 2 way communication
• Reduces feeling of them and us
• Employees become more informed

DISADVANTAGES

• Time-consuming - potentially slows decision-making (OPPORTUNITY COST)
• Conflicts between employer and employee interests may be a block to essential change.
• Managers may feel their authority is being undermined.
• Slows down decision making

TRADE UNIONS

 A trade union is an organised association of workers in a trade group, group of trades or profession, formed to protect and further their rights and interests. The traditional role of trade unions is to;

• Protect and improve real incomes of their members
• Provide or improve job security 
• Protect workers against unfair dismissal and other issues relating to employment legislation
• Lobby for better working conditions
• Offer a range of other work-related service including support for people claiming compensation for injuries sustained in a job.

The two key functions of a trade union are therefore to:

1. REPRESENT - represent and protect interests of employees
2. NEGOTIATE - Negotiate on behalf of employees with employer

Although the employer - trade union relationship is often viewed as being confrontational, there are some sound business reasons to pursue a good working relationship between the two:

• Negotiating with trade unions (ideally a single union) saves time and cost rather than dealing with all employees individually
• Unions are apart of a communication process between the business and employees
• Employee morale and motivation may be improved if they know that their interests are being protected by a union.
• The trade union can be a supportive partner in helping a business to undergo significant change

UNIONS WORK TO AVOID INDUSTRIAL ACTION AND SOLVE POTENTIAL DISPUTES BEFORE THEY HAPPEN

INDUSTRIAL ACTION

Industrial action arises when workers do something that is intended to force an employer to agree to something, especially by stopping work. The most common methods of industrial action are:

1. WORK TO RULE - Employees follow the strict conditions of their employment contract - no voluntary overtime, no participation in supporting activities. Staff still get their basic pay.
2. OVERTIME BAN - Employees refuse to work overtime. Can have a significant effect on production capacity during period f peak demand, but ineffective as a bargaining tool during quieter periods!
3. GO-SLOW - Employees work at the slowest or least-productive pace that is allowable under their employment contracts
4. STRIKE - The action of last-resort; fraught with danger for both employer and employee and strictly policed by legislation on industrial action.

In most cases of industrial action, the effect is lose-lose,  i.e. both employees and employers suffer in the short-term. For example;

DAMAGE FOR THE BUSINESS

• Lost sales and profits from the lost output
• An internal distraction for management and the business (worse if competitors are not affected)
• Damaged relationship with staff may adversely affect motivation, productivity etc.

DAMAGE FOR THE EMPLOYEES

• Lost pay
• Potential loss of jobs if the action results in action to cut costs
• Possible loss of customer and public support (depending on the reasons for the action)
• Risk that illegal action will result in legal proceedings.

It therefore makes sense for the employees and employers to avoid industrial disputes where possible. Good communication is key, for example;

1. Regular consultations with a trade union - pick up problems before they escalate
2. A staff forum or joint working group to pass on information and collect ideas from workers and consult with workers. 
3. An employee consultative body to discuss major issues as they arise
4. Team and group meeting and feedback sessions.

WORK COUNCIL

If a business has more than 5 employees, they can elect a works council. This person represents the interest of all workers. Trustful co-operation between the employer and the works council is expected and essential. The typical agenda for a works council includes:

• Business objectives and performance
• Workforce planning issues (e.g. recruitment, staffing levels)
• Employee welfare issues (working conditions, health and safety)
• Training and development programmes
• Compliance with legislation e.g. discrimination

Unlike unions, the work council does not have a political mandate. it cannot call a strike, yet has the right to information and consultation in respect of many matters, for example, in working practices or the planning of technical installation.

In other areas, the employer expressly requires the consent of the works council, for example, with the definition of the beginning and end of the work shift or the approval of over time.

As a rule, the procedure of co determination, is specified in a shop agreement. If the employer and the works council cannot agree, a mediation board will make a ruling. A neutral chairman may force that agreement.

With drastic measures, mass redundancies, for example, the employer will negotiate with the works council about the balancing of interest and the social plan. employees have a legal right to request a works council if working in a business with over 50 employees.

INDIVIDUAL APPROACH

• Each employee would negotiate individually with management for their own interest e.g. pay or working conditions.
• Decisions would be made on a one to one basis rather than for the workplace as a whole.
• Individuals may be better equipped to "fight their own corner" 
• Managers can judge each case on individual merit.

SETTLING INDUSTRIAL DISPUTES

The three main methods of settling industrial disputes are outline below:

1. Conciliation
2. Arbitration
3. Mediation

Conciliation -  Used when an employee is making, or could make, a specific complaint against their employer to an employment tribunal.

• Conciliator has no authority to seek evidence or call witnesses, or make decision or awards.
• Conciliator discusses the issues with both parties in order to help them reach a better understanding of each others position.
• Conciliator encourages the parties in dispute to come to an agreement between themselves, and so avoid the stress and expense of contesting the issue at an employment tribunal.

Arbitration -  An alternative to a court of law, held in private rather than in public. It involves an impartial outsider being asked to make a decision on a dispute

• Arbitrator makes a firm decision on a case based on the evidence presented by the parties
• Arbitration is voluntary, so both sides must agree to go to arbitration; they should also agree in advance that they will abide by the arbitrator's decision
• Often used in disputes between employers and trade unions over collective bargaining issues (e.g. pay awards) 

ACAS (Advisory Conciliation Arbitration Services) - an independent body that can be called in to help, avoid or resolve disputes by helping both parties work together and communicate. Its mission is to improve organisations and working life through better employment relations.

Mediation - Involves an independent, impartial person helping two or more individuals or groups reach a solution that's acceptable to everyone

• Aim is to restore and maintain the employment relationship wherever possible - not put blame on one party
• Best used early on in an industrial dispute
• Agreements are not legally binding, but usually carried out.