Chapter 48- employer-employee relations: trade unions and consultation Flashcards
What are a significant factor that will help facilitate this successful change?
Positive employer-employee relations
What is an important management of change and is often conducted through a trade union?
Consultation
What do businesses have employees who are members of?
One or more trade unions
In order to achieve successful change what is important for a business to do?
- communicate and negotiate with the union involved
Trade union
An organisation of employees that seeks to protect and improve the interests of its members
- does this by negotiating with employers on pay and conditions of work
What do members of a union pay every month ?
A subscription
In return as well as the union negotiating for better pay and conditions what are members entitled to?
All sorts of support, assistance and benefits
- include free legal advice on redundancy, harassment, dismissal and pensions as well as special deals on non-work related matters such as insurance, travel agency services and so on
What is the governing body of unions?
Union executive
At local level what are union representatives elected from?
Workforce in that business
This person is by law allowed reasonable Time off work to take part in trade union activities
Trade union congress
An organisation that brings britains unions together to draw up common policies and lobby the government to implement policies that will benefit employees
What does a union now have to give notice to?
It’s intention to strike and offer its members a secret ballot regarding the decision to strike, otherwise it is breach of the law
Trade unionism today
- now only 27% of the workforce is unionised
- there is a distinct difference between the level of unionisation in the public and private sectors
- younger, male manual workers are especially unlikely to join a union; decline in the old ‘heavy’ industries, the rise of part time working and self employment have contributed to this as has the growth of zero hours contracts
What does the TUC now promote?
A partnership which it defines as ‘employers and trade unions working together to achieve common goals such as fairness and competitiveness’
How is this helped to achieve?
It urges businesses to recognise unions
Employers that recognise a union will negotiate with it over members’ pay and conditions- negotiation is known as (collective bargaining)
Union recognition may increase costs in the short run but result in benefits in the long run
Union recognition
Who recognise a union agree to negotiate with it over members pay and conditions
No strike deals
- when a union gives up the right to strike
- might encourage a business to recognise a union when it would otherwise be hostile to the idea of doing so
- apart from recognition, a union signing any such deal would normally expect several benefits in return- regular communication, system of employee participation and consultation, commitment from managers to agree to regular workforce training
- it would seek an agreement to go to some form of arbitration in wage settlements if there is a dispute
Work to rule
Employees do exactly what is stated in their contract and no more; there is no goodwill towards the employer
Confederation of British industry
- counterpart of the TUC is the confederation of British industry, the employers organisation
- CBI provides information to its members and lobbies the government on policy issues that directly affect business
Employee participation
- also known as industrial democracy
- if it is accepted that consultation with employees is necessary for effective change management
- one obvious way for employee participation to occur would be the union representatives
- if the union is recognised and the collective bargaining process already established the arrangements for the timing of meetings, the pay issues and the personnel involved may already be established
Employee participation
Employees have the ability to participate in the decision making process at work
Benefits to a business of employee participation
Participation indicates a willingness to engage in discussions with employees and treat them as stakeholders. This can mean:
- increased levels of motivation- may cause productivity to rise as they feel that their view counts. Can also lead to a greater acceptance of decisions
- better communication
- can improve trust, lead to agreed goals and improve that commitment
- improved quality of decision making
- complying with the law- consultation is now a legal requirement for many issues- non compliance would be a breach of the law and would be likely to attract bad publicity
Strategic benefits of participation
- reduced labour turnover and therefore reduced recruitment costs
- fewer days lost through work related injuries and illnesses thus minimising lost output fines and compensation payouts
- ability to manage change more easily- giving business a competitive advantage in a changing environment
Quality circles
- regular short meetings of a group of employees during working hours
- objective is to discuss and resolve work related problems
- through these managers can gain a much greater awareness of employees problems and concerns
Works council
- a formal meeting of managers and employees in a particular factory (or the business as a whole) to discuss pay and working conditions or grievances, and negotiate on issues such as changes in working practices
- there is a legal requirement for large multinational companies operating in the EU to set up a European works council
Consultation was defined as
The exchange of views and establishment of dialogue between employees
It strengthened the role and rights of EWCs in a number of areas. It:
- more clearly defines the information and consultation rights of EWCs
- gives a greater role to trade unions
- entitles EWC members to training without loss of pay
Employees as shareholders
- the owners of a companies ordinary shares are entitled to vote at the annual general meeting on the basis of one vote per share
- ability to vote is a form of participation
- but meeting is annual so opportunity to participate is restricted
Consultation in action
Would be naive to assume that if a consultation process will automatically lead to harmonious employer/employee relations
Much will depend on:
- whether or not the consultation is genuine
- if the process of consultation is driven from the top
- employees accepting that their views will not always be accepted
Costs to a business of recognising a union
- recognising a union might be a logical way to start the process of employee participation
- but union representatives will press for better wages and conditions for their members and decision making in the business will be slower but its hoped that better decisions will be made
- there will have to be a trade off between the need to reach a consensus and the speed with which some business decisions are made
- likely to increase costs and reduce the businesses profits in short term
- could mean a reduction in the benefits that other stakeholders in the firm gain such as a fall in dividends for shareholders, a rise in price for customers
- only if the gains to employeees result in greater productivity and profitability in the long term will recognition be beneficial to all stakeholders
Certain principles that will be useful when unions and managers are negotiating and/or bargaining
- meetings should be at a convenient time to both parties
- the personnel attending the meeting should be agreed in advance
- both parties should be allowed to submit agenda items for discussion.
- the chairman of the meeting must ensure that all agenda items are raised and that no one in the party dominates the meeting
- a written statement at the end of the meeting on what has been agreed is good practice
Industrial action
- refers to the measures that can be taken by a union to put pressure on management over a decision that has been made or is about to be made
- Failure to resolve a dispute could therefore result in the following
Strike action
- this will disrupt the fulfilment of the businesses contracts with customers
- employees who take strike action face financial consequences
- as they are not working they are in breach of their contract
- they can’t be dismissed for this if the strike is legal
- they will not receive any pay and there not entitled to any social security benefits while on strike
- any pension contributions due to be made by the employer will not be made for the period on strike
Work to rule
- effective as its not acting illegally
- simply doing exactly what is stipulated in their contract of employment
- no goodwill
Refusal to work over time
- a refusal to work any hours in excess of those in the contract can be quite effective
- can impact on the businesses ability to meet customer requirements
ACAS
- Main way to avoid conflict between management and employees is for unions and managers to follow ACAS guidelines
- it gives advice on industrial relations to employees and managers, offers them a service of conciliation (i.e. mediation- trying to reconcile two different positions and persuade one party to see the others view)and if both parties agree it will provide arbitration
- funded by the government which ensures that it is independent
- it can provide guidelines
- also has codes of practice
What does ACAS stand for?
Advisory
Conciliation
Arbitration
Service
It gives impartial advice on how to improve employer/employee relations
Advice
- ACAS: not a kind of emergency service that can be contacted and expected to solve the problem in a matter of hours
- first step is to call the ACAS helpline where they can speak to someone who can give general advice and refer the party to the relevant guidelines
- information in the guidelines can then be presented to the other party
- may help to resolve the dispute
Mediation
- if this does not succeed, ACAS offers mediation
- which is a way out of sorting out disagreements or disputes without having to go to court
- later on the mediator will bring both parties together in a meeting and once in possession of all the facts and opinions will seek to persuade them to reach an agreement that will sort out their problems to be agreeable to both
- emphasis is on the two sides reaching a settlement by themselves
Arbitration
- it is final and binding
- usually only available for serious matters such as unfair dismissal or flexible working disputes
- its a judgement as to which party is in the wrong
