Labour Relations Flashcards
Define Segmented Market
Segmented market exists when there are different skills and employment requirements
Define derived demand
Demand that is the result of the demand for another good
Define wage rate
Payment for labour per hour, per week or per month
Define Labour conventions
Labour standards developed by the international labour organisation
Define Collective bargaining
When workers negotiate as a group with employers with regard to working conditions
Define bargaining councils
Group of representatives from the major unions and employer groups within each sector
What is the labour force participation rate
The formula used to express the percentage of the population that is presenting itself for work and that is earning a wage
What is Mediation
A negotiation to resolve differences that is conducted by an impartial party
What is Conciliation
Bringing parties together and getting them to agree on a certain course of action
What is Arbitration
The hearing and determination of a dispute by an impartial referee
What is Equality
Refers to all people receiving the same fair treatment
What is a labour market (6)
A market where labour is traded
A factor market
Is people-orientated
Only trades working terms
Income of people is determined by the jobs done
Supply and demand within the labour market determines what wages are paid
What are the 7 differences between the labour market and goods market
- Workers usually have to be physically present when their services are used. Factors such as location of employment are more important in labour markets
- Labour services are not transferable.
Goods are transferable - Labour is always rented rather than sold.
- Labour markets are characterised by trade unions, employee’s associations, collective bargaining and government intervention.
- Labour is usually employed by long term contracts.
- Labour is heterogenous it cannot be classified or standardised.
- The payment of labour does not only consist of wages.
What are the 2 determinants of the Demand for Labour
- Performance of the economy
- Productivity of Labour
What are the characteristics of the performance of the economy as a determinant of demand for labour (3)
- If the economy grows, more goods and services are sold, thus more labour is employed
- If the economy is in recession, fewer goods and services are sold and less labour is employed.
- In a recovery phase, the opposite of number 2 occurs
What are the characteristics of labour productivity (3)
- Productivity is the relationship between real output and the quantity of input used to produce that output
- Productivity is, therefore a measure of input efficiency
- Labour productivity is the number of units of output obtained from a unit of labour input
What is the productivity calculation
Productivity = Increase in output / Increase in input x 100
Define the basis of an increase of demand for labour
When the economy is growing, more workers are employed
Define the basis of an increase of supply of labour
Within the economy, more people will give up their leisure time and work if wages are higher
What are the 3 factors that affect supply of labour
- Population growth rate
- Labour Force participation rate
- Skills and other competencies
How does ‘skills and other competencies’ influence the supply of labour
All the workers in the aggregate labour supply may not have the skills and other competencies required.
What are wage rates determined by
The demand and supply of labour
What is market failure (2)
- If unemployment is in excess of its natural level
- Labour market failures are shortages of skilled labour, workers that are in jobs that they are not best suited for, lack of training, and wages that are above or below their equilibrium levels
What are the 8 reasons for market failure in the labour market
- Immobility of labour
- Oligopoly Employers
- Trade Unions
- Market inflexibility
- Lack of information
- Attachment between workers and employers
- Lack of training
- Discrimination
What is ‘immobility of labour’ ‘s role in market failure
Geographic - Workers can’t move from one location to another
Occupational - Workers may not be trained for the kind of work that is available
What is ‘Oligopoly Employers’ role in market failure
In a market where there are few employers, they have the power to determine wage rate and employment. It is thus more likely to be lower than a free market
What are ‘trade unions’ role in market failure
Trade unions may push the wage rate above the equilibrium price which prevents market clearing. It will worsen unemployment.
What is ‘Market inflexibility’ ‘s role in market failure
The market fails to adjust to changing conditions because workers are overprotected. Employers switch to capital intensive technology.
What is ‘Lack of information’ ‘s role in market failure
Workers may be unaware of vacancies with better benefits.
Employers may not always appoint the most productive workers as they are not in touch with all the potential workers
What is the ‘attachment between workers and employers’ role in market failure
Workers may stay in jobs that pay poorly because they like working for their present employers
What is ‘lack of training’ ‘s role in market failure
Some workers and forms take a short-term view and underestimate the benefits of training
What is ‘discrimination’ ‘s role in market failure
When workers are treated differently to others in the same job.
What is the LRA
Labour Relations Act
What is the general purpose of the LRA
Advance economic development, social justice, labour peace and democratization of the workplace
What does the LRA therefore do (7)
- Govern relationships between employers and employees
- Enforces the fundamental rights in all labour-related issues
- Sets rules so that employers manage employees fairly
- Ensures employees earn fair wages
- Ensures employees perform duties to the best of their abilities
- Provides a framework for collective bargaining
- Promotes the effective resolution of labour disputes
What is the BCEA
The Basic Conditions of Employment Act
What is the purpose of the BCEA
Advance economic development and social justice
What is the primary objective of the BCEA
Ensure workers’ rights to fair labour practices
What are the 5 typical issues covered in the BCEA
- Working hours
- Leave and sick leave
- Public holidays and yearly holidays
- Wages, salaries and deductions
- Termination of employment
What are 3 other problems the BCEA specifically addresses
- Child labour
- Overly long working hours
- Lack of fair payment or mistreatment of vulnerable workers
What is COIDA
The Compensation for Occupational Injuries and Diseases Act
What does COIDA do
Provides for the payment of compensation for disability caused by injuries or diseases in the execution of work duties
What are the 6 types of employees that are not covered by COIDA
- Any employee guilty of misconduct
- Domestic workers
- People in military training
- The SAPF or Defence Force
- Foreigners
- People who are temporarily employed
What does the Labour Court do
Handles labour disputes
What are the 3 participants in collective bargaining
- Workplace Forums
- Bargaining Councils
- Labour or trade unions
What are workplace forums
Formal meetings between the representatives of labour unions and employers
What is a bargaining council
A group of representatives from both the labour unions and the employer’s organisations in a particular industry
What is a labour or trade union
A workers’ association that aims to help employees achieve good wages and working conditions through collective bargaining
What is the CCMA
The Commission for Conciliation, Mediation and Arbitration
What does the CCMA do
Provides fair judgement and mediation between opposing parties in a working environment
