The philosophy HRM has been translated into the following prescriptions, which constitute the HRM model for employee relations:
- A drive for commitment – wining the ‘hearts and minds’ of employees to get them to identify with the organization, to exert themselves more on its behalf and to remain in it, thus ensuring a return on their training and development;
- An emphasis on mutuality – getting the message across that ‘we are all in this together’ and that the interests of management and employees coincide
- The organization of complementary forms of communication, such as team briefing, alongside traditional collective bargaining – i.e. approaching employees directly as individuals or in groups rather than through their representatives.
- A shift from collective bargaining to individual contracts.
- The use of employee involvement techniques such as quality circles or improvement groups.
- Emphasis on teamwork;
- Harmonization of terms and conditions for all employees.
The Parties to Industrial Relations
The parties to industrial relations are
- The trade unions
- Shop stewards or employee representatives
- The Trade Union Congress (the TUC)
- Employer’s Organizations
- The Confederation of British Industry
- Various institutions, agencies and officers
The Trade Union
Traditionally the fundamental purpose of trade unions is to promote and protect the interests of their members. They are there to redress the balance of power between employers and employees. The basis of the employment relationship is the contract of employment. But this is not a contract between equals. Employers are almost always in a stronger position to dictate the terms of the contract than individual employees. Trade Unions, as indicated by Freeman and Medoff (1984), provide workers with a ‘collective voice’ to make their wishes known to management and thus bring actual and desired conditions closer together. This applies not only
to terms of employment such as pay, working hours and holidays, but also to the way in which individuals are treated in such aspects of employment as the redress of grievances, discipline and redundancy.
Trade Unions also exist to let management know what there will be time to time, an alternative view on key issues affecting employees. More broadly, unions may see their role as that of participating with management on decision making on matters affecting their members’ interests. Within this overall role, trade unions have had two specific roles, namely to secure, through collective bargaining, improved terms and conditions for their members, and to provide protection, support and advice to their members as individual employees. An additional role that of providing legal, financial and other services to their members, has come into prominence more recently.
Trade Union Structure
Trade unions are run by full-time central and usually district officials. There may be local committees of members. National officials may conduct industry-wide or major employer pay negotiations while local officials may not be involved in plant negotiations unless there is a ‘failure to agree’ and the second stage of a negotiation procedure is invoked. Major employers who want to introduce significant changes in agreements or working arrangements may deal direct with national officials. The trade union movement is now dominated by the large general unions and the merged craft and public service unions.
Shop stewards or employee representative may initial be responsible for plant negotiations, probably with the advice of full-time officials. They will certainly be involved in settling disputes and resolving collective grievances and in representing individual employees with grievances or disciplinary matters. They may be members of joint consultative committees, which could be wholly or partly composed of trade union representatives. At one time, shop stewards were the ogres of the industrial relations scene. Undoubtedly there were cases of militant shop stewards, but where there are recognized trade unions, managements have generally recognized the value of shop stewards as points of contact and channels of communication.
International Union Organizations
The two main international union organizations are the European Trade Union Confederation and the International Trade Union Confederation. At present neither of these makes much impact on the UK, but this could change.
Staff association may sometimes have negotiating and /or representational rights but they seldom have anything like the real power possessed by a well organized and supported trade union. They are often suspected by employees as being no more than management’s poodle. Managements have sometimes encouraged the development of staff association as an alternative to trade unions but this strategy has not always worked. If fact, in some organizations the existence of an unsatisfactory staff association has provided an opportunity for a trade union to gain membership and recognition. Staff association have their uses as channels of communication, and representatives can play a role in consultative processes and in representing colleagues who want to take up grievances or who are being subjected to disciplinary proceedings.
The Role of Management
The balance of power has undoubtedly shifted to management who now have more choice over how they conduct relationships with their employees. But the evidence is that there has been no concerted drive by managements to de-recognize unions. As Kessler and Bayliss (1992) point out: If managers in large establishments and companies wanted to make changes they looked at ways of doing so within the existing arrangements and if they could produce the goods they used them. Because managers found that the unions did not stand in their way they saw no reason for getting rid of them. ‘They argued that management’s industrial relations objectives are now
- Control the work progress
- Secure cost-effectiveness
- Reassert managerial authority
- Move towards a more unitary and individualistic approach
As Storey (1992) found in most of the cases he studied, there was a tendency for managements to adopt HRM approaches to employee relations while still coexisting with the unions. But they gave increasing weight to systems of employee involvement in particular communication, which bypass trade unions.
Traditionally, employer’s organizations have bargained collectively for their members with trade unions and have in general aimed to protect the interests of those members in their dealings with unions. Multi-employers or industry-wide bargaining, it was believed, allowed companies to compete in product markets without undercutting their competitors’ employment costs and prevented the trade unions ‘picking off’ individual employers in a dispute.
The trend towards decentralizing bargaining to plant level has reduced the extent to which employers’ organizations fulfill this traditional role, although some industries such as building and electrical contracting with large numbers of small companies in competitive markets have retained their central bargaining function, setting a floor of terms and conditions for the industry.
Institutions, Agencies and Officers There are a number of bodies and people with a role in employee relations, as described below
The Advisory Conciliation and Arbitration Service (ACAS) ACAS was created by the government but function independently. It has three main statutory duties:
- To resolve disputes
- To provide conciliatory services for individuals in, for example, unfair dismissal cases
- To give advice, help and information on industrial relations and employment issues.
ACAS helps to resolve disputes in three ways: collective conciliation, arbitration and arbitration services declined considerably. But the individual conciliation case load has been very heavy and the ACAS advisory work has flourished. These are aimed at encouraging non adversarial approaches to preventing and resolving problems at work by facilitating joint working groups of employers, employees and their representatives.
The central arbitration committee (CAC)
The CAC is an independent arbitration body that deals with disputes. It arbitrates at the request of one party but with the agreement of the other. It does not handle many arbitrations but it deals more frequently with claims by trade unions for disclosure of information for collective bargaining purposes.
Employment tribunals are independent judicial bodies that deal with disputes on employment matters such as unfair dismissal, equal pay, sex and race discrimination and employment protection provisions. They have a legally qualified chair and two other members, one an employer, the other a trade unionist.
The Employment Appeal Tribunal (EAT)
The EAT hears appeals from the decisions of industrial tribunals on questions of law only.
Role Of The HR Function In Employee Relations
The HR function provides guidance and training and will develop and help to introduce and maintain formal processes; but it does not do line manager’s jobs for them. However, it is their role as industrial relations specialists. They are also likely to have a measure of responsibility for maintaining participation and involvement processes and for managing employee communications. They can and should play a major part in developing employee relations strategies and policies that aim to:
- Achieve satisfactory employment relationships, taking particular account of the importance of psychological contracts.
- Build stable and cooperative relationships with employees which recognizes that they are stakeholders in the organization and minimize conflict
- Achieve commitment through employee involvement and communications processes.
- Develop mutuality – a common interest in achieving the organization’s goals through the development of organizational cultures based on shared values between management and employees.
- Clarify industrial relations processes with trade unions and build harmonious relationships with them on a partnership basis.
In these capacities HR practitioners can make a major contribution to the creation and maintenance of a good employee relations climate.
Employee Relations Policies
Approaches to employee relations
Four approaches to employee relations policies have been identified by Industrial Relations Services (1994)
- Adversarial: the organization decides that what it wants to do, and employees are expected to fit in. employees only exercise power by refusing to cooperate.
- Traditional: a good day-to-day working relationship but management proposes and the workforce reacts through its elected representatives.
- Partnership: the organization involves employees in the drawing up and execution of organization policies, but retains the right to manage.
- Power Sharing: Employee are involved in both day-to-day and strategic decision making.
Adversarial approaches are much less common than in the 1960s and 1970s. The traditional approach is still the most typical but more interest is being expressed in partnership, as discussed later. Power sharing is rare.
The areas covered by employee relations policies are:
- Trade union recognition – whether trade unions should be recognized or derecognized, which union or unions the organization would prefer to deal with, and whether or not it is desirable to recognize only one union for collective bargaining and/or employee representational purposes.
- Collection bargaining – the extent to which it should be centralized or decentralized and the scope of areas to be covered by collective bargaining.
- Employee relations procedures – the nature and scope of procedures for redundancy, grievance handling and discipline.
- Participation and involvement – the extent to which the organization is prepared to give employees a voice on matters that concern them.
- Partnership – the extent to which a partnership approach is thought to be desirable.
- The employment relationship – the extent to which terms and conditions of employment should be governed by collective agreements or based on individual contracts of employment (i.e. collectivism versus individualism).
- Harmonization – terms and conditions of employment for staff and manual workers.
- Working arrangements – the degree to which management has the prerogative to determine working arrangements without reference to trade unions or employee (this includes job-based or functional flexibility).
Third Party dispute resolution
The aim of collective bargaining is, of course, to reach agreement, preferably to the satisfaction of both parties. Negotiating procedures, as described in the next section of this chapter, provide for various stages of ‘failure to agree’ and often include a clause providing for some form of third-party dispute resolution in the event of the procedure being exhausted. The processes of dispute resolution as identified by IRS (2004d) are conciliation, arbitration and mediation.
It is an attempt, through informal discussions, to help parties in a dispute to reach their own agreement. The third party does not recommend or decide on a settlement. One advantage of this process is that it helps the parties to retain ownership of the resolution of the problem, which can, in turn, engender greater commitment to its implementation. Conciliation is the most frequently used form of third party involvement.
The parties put the issue to an independent third party for determination. The parties agree in advance to accept the arbitrator’s decision as a means of finally resolving the matter. There is sometimes a reluctance to use this method as it removes control over the final outcome from employers, employees or trade unions.
Formal but non-binding recommendations or proposals are put forward for further consideration by the parties. The use of dispute mediation is rare, partly because it is seen as a halfway house. There is sometimes a feeling that if conciliation cannot succeed, it may be best simply to go all the way to arbitration.