Impact of the European Union on Employment Relations - Research Paper Example

Impact of the European Union on Employment Relations Impact of the European Union on Employment Relations Theinfluence of the European Union (EU) on employment relations in Britain is highly influential in many areas. The powers that the EU has in determining the conventions and policies, which guide the relations between employers and employees, have risen significantly over the last twenty years. Examples of areas where Britain has had to take into consideration the EU initiates in the employment law field include shared redundancies, transfers of undertakings, equal opportunities, and maternity leaves among other areas of employment. These are all areas in which EU legislations have direct effect on the day to day work of the British HR/personnel professional (Rose, 2004). This paper evaluates the effect that the European Union has on employee relations in the EU member states and specifically the United Kingdom. Organizations and HRM specialists have to realize that laws formulated at the EU level are superior to the domestic laws of the member states. This is relevant to employment legislation just as much as legislation in every other area. What is encouraging is that the EU incorporates the bodies that are tasked with formulating policies in the member states in the making of legislations that affect all the member states. Of course, the British government can continue to make any social and employment laws that it wants to implement domestically if they do not undermine the requirements laid down by the EU law (Morris, Willey, & Sachdev, 2002). The European Union Environment Starting from the late 1950s, the European Union has developed with stages of great activity followed by times of standstill. In essence, the Maastricht Treaty of 1991, which altered the issue of the European Economic Community to the European Union, marked the start of an active phase towards a deeper and bigger Europe. In 1992, the European Economic Area was characterized by accord on eastern expansion and 1995 saw Austria, Finland, and Sweden becoming fully pledged members of the EU. The Intergovernmental Conference (ICG) came into effect in March 1996, and agreed at Maastricht to offer prolongation of this active phase (Timming, 2007). The ICG is tasked with a triple mandate of reforming the EU decision-making and organizations, extending EU responsibility for mutual foreign and defence policies, and enhancing collaboration on immigration, safe haven, military and other home affairs matters. At the same breath, the EU needs to go on with balancing common financial interests with national and sectorial economic interests. Central to the achievement of political and economic integration in formulating the post-ICG planning of Europe will be the European Monetary Union (EMU). The formulation of an EMU, that is an identical European currency and a European Central Bank, will have a major effect on the manner in which the labor markets and mostly collective bargaining are going to operate in the coming days. The reasons for this are that supply or demand unpredictability in the financial sector within an EMU framework will bring about strict macro-economic procedures on salary increases and secondly there will be an effect since member countries must meet the convergence criteria established by Maastricht in 1991 (Hepple, 2005). Employment Relations The last ten years have been characterized by a rising interest in the idea of employee voice, both from the individuals seeking higher levels of organizational performance as well as from those desiring better systems of employee representation. In public policy terms, the environment is more tolerant towards trade unions something that has been brought about by heightened thoughts of employee rights as well as emerging legal regulations. In a way, this has been because of the numerous reforms engineered by the Labour government that were engineered in 1997 and upon their re-election in 2001. While the current government appears committed to labour flexibility, it has been forced to regulate autonomously on behalf of employees and to commit Britain to the European Social Policy in particular the newly established EU Directive for Employee Information and Consultation Rights. As a result, there has been a period of re-regulation to match the new EU legislations on employee rights and the working environment (Hug, & Tudor, 2012). Ideally, both the EU Directives on European Works Councils and Employee Information and Consultation, together with Britain’s statutory trade union recognition guidelines have the ability to directly impact the manner in which employers approach employee voice. The European Works Councils (EWCs) have given a new mandate to consultation in multinationals based in Britain. The desire by TUC’s to consult instead of just concentrate of collective bargaining as well as the readiness of trade unions to work alongside non-union representatives on EWCs has given dialogue a new impetus. Ten years ago, there appeared to have been a decline in the joint consultation alongside the collective bargaining. Direct communications as well as upward solving of problems have eclipsed this and this has brought concerns about a representation gap. For the organizations that were not unionized, EWCs have offered new avenues for employee voice just in the same that the transposition agreement endorsed by the CBI and TUC concerning the newly formulated EU Directive on Employee Information and Consultation does. In addition to this, the recognition of the statutory trade union has raised the probability of a certain type of trade union that employers have been forced to content with albeit reluctantly (Hepple, et al. 2000). At the present, employers are forced to work with a labour union that is willing to provide voluntary recognition trade unions. In the same measure, the EU Directive on Information and demands that all employers who have 50 or more employees come up with a framework where employees can air their concerns over the next few years. The span of such consultations will factor matters relating to the economic situation of the undertaking, improvements touching on employment and fundamental changes in work organization or contractual relations. In all these cases, the legislation is likely to bring about a whole set of choices and plans that will be brought about by the new regulatory environment (Baglioni & Crouch, 2012). Ideally, the EU legislations on employment first influence the manner in which organizational management function. This function can be the manner in which managers utilize power, control and organize workforces and manage the conflicts of interest arising in the workplace and this impact can be explained in the following manner. Traditionally, it was widely an accepted fact that most of the existing legislations on employment tended to favour employers. However, the new EU legislations on employment have restrained this employer power. While trade unions were losing their power in the past, the new regulations have given them more power and now they are at a better position to negotiate for collective bargaining power for the employees. This has been rewarded by a sharp rise in the number of employees joining trade unions. In the past, most employers could terminate the contracts of employees who were discontent at the workplace but the introduction of certain EU laws has changed the tide in favour of the employees (Deakin, & Morris, 2005). Traditionally, it was generally accepted in British employment relations that as far as terms and conditions of employment are involved, the legislation would guide the general framework but the details would be provided either by the employers or after discussing with the trade unions. Actually, Britain has been considered the only country in the world where employers have the sole mandate of defining the labour relations. This means that before the EU legislations the law and legal profession had very little to do with what happened in the workplace but it was rather the employers who determined the working experiences of their workers. However, the EU law managed to change all this and today employers and managers are forced to make decisions based on the rules that bind the whole EU region. Apart from the employers, the trade unions that make negotiations on behalf of the employees also have to adhere to the provisions of the EU on employment (Department for Business, Innovation and Skills, 2011). Unlike in the past where employers could sack employers without any basis, today things have changed and all the managerial decisions on matters such as sacking an employee have to be backed by statute law. While the statute laws did not offer any help for employees, the enactment of the EU laws has forced the government to change its existing laws to match those of the EU provisions. In addition to this, employers are now required to be fair and all the managerial decisions are supposed to be reasonable. This has also given rise to equal employment opportunities according to the equality law provided by the EU on employment relations (Lewis, & Clark, 2003). Another area that has been greatly impacted by the EU directives on employment is on procedural issues. In the traditional setting, there were no existing provisions for hiring employees on contract basis and this meant that the employer could terminate the services of the employee without any legal hitches. However, the EU law has changed this and today individual employees work under an employment contract that is signed between the worker and the employer. Agreement is at the centre of contract formation and contract alteration. Under the current laws, the employer must consult and seek the agreement of the employee wherever changes on the original contracts arise. This is something that was not in existence in the past and this has just been made possible by the EU legislations. What this law means for employers is that they now have to look at the long-term effects of any contract they sign since they are supposed to honour it even if it means that they are losing money in the process (Ministry of Justice, 2010). On the issue of collective relations, Britain, traditionally, maintained t strongest history of voluntarism in relation to planning the employment relations measures. For this reason, employers could make free decisions regarding whether they wanted or did not want to negotiate with trade unions and about the terms of employment that were applicable in their organizations. The employers also had the sole mandate of determining the consultation arrangements that they could make with employees. Although employers still have autonomy in this area, the European law has curtailed it to some extent. Today, wherever an organization is planning on collective redundancy, the employer is mandated to discuss with the trade unions or any appointed representatives of the employees. The organizations are also expected to be open with the employees on the economic state of the organization and on whether there are any expected changes in the labour force or existing contracts. This is something that was not possible in the past and the EU provisions have led to scenarios where employers have to engage in lengthy negotiations with unions before any meaningful changes can be enacted in their organizations. In most cases, this comes in the form of lengthy court battles that always goes in the employees favour something that costs organizations sizable amounts of money in trying to mitigate the effects of the law suits (Carley, 2010). Economic Perspectives Given the enormous influence that the EU legislations have had on the employment relations in Britain, there is no doubt that there have been economic impacts. Naturally, in all instances, any change in the law has the sole purpose of protecting both the employer and the employee. However, in the case of Britain, the formulated legislations have tended to benefit the employees more than they benefit the employer. This scenario does not suggest that the formulated EU legislations have been unfair towards the employers. Instead, this state has been brought about by the existing imbalances in the traditional labour relations in Britain where the employers nearly made all the decisions in affecting the employees (Bercusson, 2003). In recent years, membership on the trade unions had been dwindling since employees did not believe that the unions were capable of championing for their rights. However, the EU provisions that have granted more powers to the unions have seen its memberships rising again at a fast rate. This rate shows that the EU legislations on employment relations are taking effect and as such, they are benefiting employees who had suffered for long under a system that only recognized the decisions of the employers. Despite the benefits to the employee, the law has had some negative effects on the employers in that it is now hard to dismiss an unproductive employee since one has to go through a long and torturous process (Better Regulation Executive, 2010). This leads to a situation where an organization has to stick to an unproductive employee often at the economic detriment of the organization. However, on the positive side, the law has made managers to sharpen their hiring skills since they now have to think ahead before signing on any contract with employees. This has given rise to a situation where human resource managers only hire the best professionals and this has actually led to turnarounds of most organizations. Despite this, there is still need to look at some of the provisions of the existing EU laws since they do not really force member states to make decisions that are in agreement with the EU law especially in the area of negotiating contracts. In addition to this, while the contract law has brought numerous changes in the employment relations, there are still workers who are outside the scope of this protection and they continue to suffer under the traditional British employment laws (Gold, & Hall, 2013). References Baglioni, G. & Crouch, C. (2012). European Industrial Relations. Croom Helm: London. Bercusson, B. (2003). What has the European Parliament Done for Workers? Trade Union Congress Website. Better Regulation Executive (2010). Lightening the Load: the Regulatory Impact on UK’s Smallest Businesses. 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Employment Rights, Industrial Tribunals and Arbitration: the Case for Alternative Dispute Resolution. London: Institute of Employment Rights. Ministry of Justice (2010) Employment Tribunal and EAT Statistics 2009–2010 Available at: www.justice.gov.uk Morris, H., Willey, B. & Sachdev, S. (2002) Managing in a Business Context: an HR Approach. London: Prentice Hall. Rose, E. (2004). Employment Relations. Harlow: Prentice Hall/Pearson Education Timming, A. (2007). European Works Councils and the Dark Side of Managing Worker Voice. Human Resource Management Journal 17 (3): 248-268. Read More