Employer-Employee Relations

Legal Requirement For Employers to Consult with Employees:

• Proposed redundancy programmes

• When employees are transferred from one employer to another (e.g. the sale of the business)

• On changes to pension arrangements

• Proposed changes to working time arrangement

What is Employee Representation?

• Where employees are part of a formal structure that involves them in business decision-making

Reasons for Formal Employee Representation:

• Make employees’ views known to management

• Help strengthen both management’s and employees’ understanding of workplace issues and other matters affecting the business

• Help create an atmosphere of mutual trust between employees and management and therefore improve workplace relations

Benefits of Employee Representation:

• Increased empowerment and motivation of the workforce

• Employees become more committed to the objectives and strategy of the business

• Better decision-making because employee experience and insights are taken into account

• Lower risk of industrial disputes

Drawback of Employee Representation:

• Time-consuming - potentially slows decision-making

• Conflicts between employer and employee interests may create resistance to necessary change in the business

• Managers may feel their authority is being undermined

Work Councils:

• EU legislation makes these mandatory for firms that operate in two or more EU countries and have more than 1,000 employees

Typical Agenda for a Works Council:

• Business objectives and performance

• Workforce planning issues (recruitment, staffing levels)

• Employee welfare issues (Working conditions, health and safety)

• Training and development programmes

• Compliance with legislation (e.g. discrimination)

Role of Trade Unions:

• Protect and improve the 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 work-related services (e.g. legal support)

Advantages for an Employer of a Good Relationship with Trade Union:

• Negotiating with trade unions (ideally a single union) saves time and cost rather than dealing with employees individually

• Unions are part of the 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 undergo significant change

What factors influence the success of industrial action?

• Nature and strength of the union

• Workforce concentration e.g. lots of union members in one firm compared with a few members in many firms)

• Management tactics e.g. if stocks are available to meet demand during a strike)

• Economic and legal climate

• Public support

What problems of industrial action can affect employers?

• Lost production, reduced revenue and lower profits

• Continuing poor relationships and grievances with employees, which lead to poor motivation and communication

• Shifts management's focus away from strategic planning for the future

• Harms the firm's reputation with its customer

What problems of industrial action can affect employees?

• Reduced/lost earnings and possible redundancies

• Must conform to legislation or be liable for damages

• Stress due to friction with other workers and with management

• If unsuccessful, workers are in a weaker position

• Support from the public may decline if the action affects them

What are the benefits of industrial action?

• Resolves ongoing grievances and improves the atmosphere

• This leads to new and agreed rules, e.g. about rates of pay or the need to consult

• This leads to a greater understanding of employer/employee positions