Industrial Relations in a Global Context: Ukraine Case - Essay Example

? INDUSTRIAL RELATIONS IN A GLOBAL CONTEXT: UKRAINE CASE By Table of Contents Executive summary 3 Industrial Relations in a Global Context: Ukraine case 4 Introduction 4 Literature Review 5 Employer – Employee relationship in Ukraine 7 Recruitment 7 Education and Retraining 7 Remuneration 8 Trade Unions 8 Criticism 10 Bibliography 13 Executive summary Industrial relations refer to the process of regulating workplace relations between the employer and the employee. This is done to ensure that the manual and mental labor that the employee offers is commensurate with the remuneration they are offered (Kaufman 2004). There are various institutions that are established to ensure that the principles governing the operations are regulated. Emphasis has thus been given to industrial relations in most countries to ensure that employees are treated fairly and governments are able to portray a positive self-image to the international world. Industrial relations have been based on various concepts like pluralism, Unitarianism and Marxism that have allowed them to function in a variety of ways. Ukraine, a country in central Europe has been known to implement the concept of pluralism in its industrial relations. The formation of trade unions has been allowed constitutionally to ensure that each person's rights and interests are represented. The trade unions have however formed the basis for conflict that has arisen as a result of their nature of action. They may be politically influenced to serve other interests other than the interests of their members. They also openly relay the disparities between the employer and the employee portraying them as unable to be equal. Conflicts have also arisen as a result of failure of the trade unions to receive all that they have bargained for. Clearly, trade unions are a contemporary issue in industrial relations in Ukraine. Industrial Relations in a Global Context: Ukraine case Introduction Industrial relations include the processes of regulation and control over workplace relations, the organization of tasks and the relationship between employers and their representatives, and employees and their representatives. The employee provides manual and mental labor while the employer provides rewards that are commensurate with the services that the employee has provided. Interaction between the two are of a political, social and economic nature with institutions being established for the purposes of governing the operations of the workplace (Kaufman 2004). The great industrial revolution, a response to growing problems in the employment sector, led to the development of modern employment relationship currently encountered. At the time, there were free labor markets and large industries that employed thousands of people. The onset of massive economic and social changes led to labor problems that were fueled by low wages, long working hours, monotonous and dangerous work with abusive supervisory practices (Ackers 2002). This led to a threat in social stability as employees quit their jobs and organized violent strikes again their employers. This led to the rise of the concept of industrial relations to prevent further damage to the economy. Industrial relations define the relationship between employees and their employers as pertains to the protection of employee rights. It covers employees who are both unionized and non-unionized. Improvements in industrial relations and human resource management have moved management and employee bargaining down to the level of the firm generating interest in the conduct of employee relations at managerial levels. This is because labor markets are considered unfairly competitive. Employers have greater bargaining power than employees and are often viewed to have more profits as compared to the amount of wages they offer to employees. Literature Review With labor markets being perceived as imperfect, society cannot rely on managers and business owners to develop policies in the worker's interest. As such, institutional interventions have been initiated to protect the worker's rights. These interventions vary in their nature of implementation because of the differences in priorities from one organization to another. Adopting a pluralistic intervention is fundamental when the organization is perceived as having powerful and divergent subgroups each with its own agenda. It identified two predominant subgroups as trade unions and the management of various companies each with their own set of objectives and leadership structure. According to this intervention, the role of management favors persuasion and coordination as opposed to control and enforcement of laws in their companies. Trade unions are perceived as legal and considered legitimate representatives of employees (Banfield & Kay 2008). In this way, conflict is handled through a mechanism of collective bargaining that is expected to bring about positive change. When an intervention adopts the concept of Unitarianism, the priorities are geared towards establishing a relationship between the organization and its employees to ensure that they co-exist in harmony. The management and staff all share a common objective allowing them to attain mutual cooperation. Employees are required to be loyal to their employer with trade unions being deemed unnecessary (Rose 2008). Conflict is not encouraged and is considered disruptive leading to communication breakdown. Radical interventions are often applied by organizations who view the world as a capitalistic society. They perceive a fundamental division between capital and labor viewing the workplace as a potential source of inequalities in power and economic wealth. Conflict is perceived as inevitable and is often remedied by trade unions which are a natural response to exploitation. As a result of these varied interventions, industrial relations today is in crisis because of the dominance if mainstream economics. Organization behavior has also been changing fueled by post-modernism which favor free markets (Ackers 2002). As a result, labor unions are quickly declining with fewer companies embracing the concept of industrial relations. Introduction to Ukraine Ukraine is a considered to be located in central Europe with a territory of 607.7 square kilometers and a populations of 49.5 million (Motyl 1993). It is the second largest area in Europe after Russia and its people have endured difficulties during their long and complicated path towards independence. It has a huge industrial potential that leans towards black and color metallurgy, mechanical engineering, machine building and rocket production. It has massive deposits of mineral resources and also engages in agriculture in its areas of land that can support it. It has a well-developed education system with several higher education establishments. It is currently moving from a system of planned economy to market economy in all the fields of activity that it engages in. Owing to the huge period of time that it spent implementing a totalitarian system of management, it has had several issues with its industrial relations. Before it received its independence, employee compensation issues were strictly managed by the government who sought to pay them as it wished. A labor code was also instituted that handled issues of recruitment, termination, staff redundancy among other human resource issues (Motyl 1993). After their independence, companies sought to apply the western methods and practices in the management. This has realized an improvement in their labor relations gearing them to the standards that are present in the western countries. Employer – Employee relationship in Ukraine According to their constitution, all citizens are equal and have got the right to employment and equal opportunities in the area and nature of work that they would wish to engage in. The relationship between the employer and the employee is governed by the labor code and the safety code and social guarantees are provided for those who are unemployed to enable them get basic requirements (Motyl 1993). Recruitment Companies and organizations in Ukraine utilize the standard resume and interview method to recruit their staff. They employ the use of references and often check the background of the skills and qualifications of the employees before they are hired. Screening tests are carried out and a medical certificate issued to prove the health and condition of the employee and their ability to perform the specified job. The government has also allowed for the establishment of various recruitment agencies that are involved in seeking qualified staff, screening them and recommending them to various companies for employment (Casale 1999). Education and Retraining Since its independence, Ukraine has upgraded its education system to offer education to all its citizens. Since its education system is controlled by the government, it is able to quality educational services to its people. Educational systems have been reorganized and many new generation establishments set up to cater for the market's educational needs. Secondary education is compulsory with the government providing education from preschool to postgraduate level. It has also improved its vocational technical education to ensure that it is tailored to the industry's needs to prepare them for the workplace environment. Retraining courses are offered at these educational establishments whereby the adult population working in various industries are offered specialist training (Motyl 1993). Remuneration Remuneration in Ukraine is controlled by the labor code of Ukraine whereby compensation for employees of companies, establishments and organizations are calculated based on hourly rates or the number of pieces of an item that a person has produced (Motyl 1993). Compensations packages for employees are implemented through a collective agreement and in accordance with regulations and guarantees stipulated by the law. Salaries are offered to managers and specialized workers while the local blue collar workers are paid wages. Dangerous work, night work and overtime are also paid expenses that are offered to employees for the days that they work in that manner. Incentives are also offered to employees to enhance their motivation in the work they are doing. All employees, irrespective of their employer, are entitled to vacations and leave days including annual vacation, educational leave and maternity leave. Deductions are also made on employee salaries to state funds like pension and social insurance fund (Simon 2000). Trade Unions There are trade unions in Ukraine that have been evolving over time from the tyranny before independence to their advocacy for rights and privileges post-independence. Because of their abundance of mineral, the coal workers union is the most active union fighting for the rights of coal workers. These unions initiate most strikes and are united at national level with representatives in parliament (Simon 2000). Collective agreements are important for all types of companies with discussions, meetings and conferences dedicated to collective agreement. Termination of employment is a complicated process because of the stipulation that requires and employer to obtain consent from the union council irrespective of the reason for termination of employment. Court procedure is supported in the event of wrongful termination making industrial relations a sensitive subject in Ukraine. Freedom of association is granted by the law in Ukraine but unions must be registered through a complex procedure. Almost 66% of the country's workforce has been enrolled into trade unions in the country because of the limited level of protection that is accorded for discrimination against union members (Motyl 1993). These unions have a right to strike but these highly circumscribed strikes must be legal. Before it is deemed legal, these strikes must be voted in by at least two-thirds of the workers who are to be affected by it. The state may mediate on disputes between the employer and the employee in some occasions. The minimum working age in Ukraine is 16 years with minimum wage law having been implemented in the country. Criticism Ukraine utilizes pluralism in handling its industrial relations, characterized by the presence of trade unions to cater for the rights and interests of employees in the country. However, the implementation of such a system creates several pressure groups which may seek to work for their own interests. Trade unions are created for each department of workers making them very many in the country (Mullins 2005). Mine workers, teachers, doctors among other employees all have their unions each representing the rights of their various groups. It such diversity that may cause each group to work for its own interests which may not take into consideration other unions. These unions may make policies that would significantly affect the rights of other workers in the country. They are also connected to parliament and may thus be influenced by political activities that govern parliament. The pluralistic view towards industrial relations can be compromised through intricate politics which may significantly affect the nature of advocacy that these unions engage in. Politicians may influence top leadership in these unions to make them demand certain items from the government. These items may not be in the best interest of the employees but because of political interests, they may be passed at the expense of other basic needs that employees may require (Budd 2004). There is inequality of power that is exhibited in the system that Ukraine utilizes is a potential source of conflict. This is because by acknowledging the importance of trade unions in a country, one is acknowledging the presence of inequalities between employers and employees; that employers have greater power than employees and have used this power to create inequalities between the two groups. Profits are not equally shared leading to conflict between the labor and management fields. Considering that these inequalities of power could disappear and reduce the level of conflict present in society would be unrealistic. However, the pluralistic theory assumes that there can exist equality between the employer and the employee (Budd & Bhave 2008). This it perceives will ensure that the government develops public policy that is based on mutuality and consensus. This is an erroneous assumption because there cannot be equality between the employer and the employee. Several disparities will exist because of the employer's needs to increase profits making it difficult for the employee to be content with their current status. Conflict thus becomes a natural source of conflict between the two groups. The theory of pluralism accords freedoms and liberties to various sectors of its actors. The unions have been offered freedoms to pursue their rights from employers and seek better pay and better working conditions. The employers however are sometimes denied the power to seek reprieve from their economic problems and have to subject themselves to assistance from the government. This is seen in the case whereby employees demand for better pay in a market that is unable to support extra pay for its employees. Profit margins would be significantly affected such that the company would be operating at the bare minimum. This begs the question of why certain groups should be given more liberty and freedom over others. The method of handling industrial relations also assumes that there will always be a way to accommodate the issues of these trade unions in one way or another even though it may cause harm to the economic status of the company. It employs the use of bargaining that realizes a multitude of interest groups in society being accommodated. Various groups can employ the concept of negotiation because they understand that they will be given a chance to negotiate for their rights and interests. Hence, for the process to be successful there must be unconditional acceptance of certain broad societal values such as industrial control by minority private property interests. Problems will arise when the unions challenge the minority private property rights and minor disagreement occurs over an issue. The country may face economic sanctions as a results of the actions of these unions (Mullins 2005). Conclusion In conclusion, trade unions are a contemporary industrial relations issue that has taken hold in the modern day environment. Since independence, Ukraine has revolutionized its industrial relations policies to cater for trade unions that pursue the rights of its employees. However, these trade unions have proved cumbersome in their advocacy and have been riddled by corruption and self-interests of various factions. Nevertheless, they are bound to be in action for a long time to come hence governments have to seek amicable ways of regulating their actions. Bibliography Ackers, P., 2002. Reframing Employment Relations: The Case for Neo-Pluralism. Industrial Relations Journal. Banfield, P. & Kay, R., 2008. Introduction to Human Resource Management, Oxford: Oxford University Press. Budd, J.W., 2004. Employment with a Human Face: Balancing Efficiency, Equity, and Voice, Cornell: Cornell University Press. Budd, J.W. & Bhave, D., 2008. Values, Ideologies, and Frames of Reference in Industrial Relations. In Sage Handbook of Industrial Relations. New York: Sage Publications. Casale, G., 1999. Social Dialogue in Central and Eastern Europe. Kaufman, B.E., 2004. The Global Evolution of Industrial Relations: Events, Ideas, and the IIRA. Motyl, A., 1993. Dilemmas of Independence: Ukraine After Totalitarianism. Mullins, L.J., 2005. Management and Organizational Behavior, London: FT Prentice Hall. Rose, E., 2008. Employment Relations. Financial Times, p.96. Simon, R., 2000. Labor and political transformation in Russia and Ukraine, Ashgate. Read More