Employee Relations Practice at Royal Mail - Case Study Example

Employee Relations Practice Assignment (Royal Mail Case Study Introduction British Royal Mail is one of the largest mail services in the world. It has a long history of over 360 years in Britain and around the world. In March 2004, Royal Mail Group developed an independent charitable trust to manage the heritage of all their brands including Royal Mail, Post Office and Parcelforce Worldwide. Royal Mail is a service which includes delivering letters and packages and the business has touched the lives of many people in Britain and around the world. Everyday Royal Mail collects letters and parcels directly from their 113,000 post boxes, 14,300 Post Office branches and from some 87,000 businesses. These items pass through their network of 70 mail centers, 8 regional distribution centers and3,000 delivery offices. Then the fleet of over 30,000 red vehicles and 33,000 bicycles help them to deliver these items to their final destinations or recipients. Employment relationship or industrial relations particularly refers to the legal relationship between the employer and the employee. Thus it's obvious that employment relationship creates a set of reciprocal rights and corresponding obligations on the part of the employer and the employee (Darlington, 2009). A healthy relationship between employers and employees is a very important factor in the efficiency and the success of any organization. When considering the labor relations and disputes, a small conflict between the above parties can be a serious issue and it can turn the entire business into bankruptcy if both parties do not negotiate with each other and find solutions quickly and effectively. This is due to the fact that the bargaining power of individuals or trade unions is unlimited. So it is necessary to have a stable policy and procedure for the effective execution of employee relations, especially regarding the labor disputes (Bennett, 1999). Advisory Conciliation and Arbitration Service (ACAS) is the governing body and the facilitator of employee relations and conflict issues in the UK and hasover 30 years of experiencein helping and resolving conflicts for organizations of all sizes and shapes. At Royal Mail there is a clear conflict between employers and employees and thus it indicates the level of bargaining power of employees of the organization. The employees are demanding high wages to make adjustments to their living costs against inflation in the economy by giving various reasons to justify the issue, such as higher operating cost in the organization due to a lack of experience and the commitment of the executives. And they know the importance of the organization and its existence in order to serve the people in the country. They feel that there is a negative attitude towards the employees on the part of the administrative officers. They further argue that the high wages of Royal Mail's chief executive officers is one of the reasons for their woes. The employees feel that there is a huge discrimination in wage levels between and among executives and the workers. There are various bargaining positions adopted by the employees, such as distributive bargaining and classic bargaining. In all these positions are adopted in order to secure increases in the wage level of the employees, reduce the work hours and get approvals for medical leaves. Yet another type of bargaining is the integrative bargaining that includes raising health and safety of the employees to improve the quality of life of employees. Intra-organizational bargaining is concerned with the matters relating to internal problems such as wastage, long working hours etc. If employees are not confident that the authorities are not considering their bargaining issues they might possibly go for the union tactics to redress their grievances. Slowdowns of the operations, stoppages and even outright strikes are staged by them to win over rights. If the employees feel first two tactics are not going to work they might conduct a public strike as the final step. A successful strike occurs when the union sings an acceptable contract, involving skilled workers and when it is an integrated operation. All the members should actively participate in the process. The strike process becomes unsuccessful when the employer is able to replace the striking workers and if there is a possibility of subcontracting. Thus excess supply of labor as well as financial power of the employer to make alternative arrangements to the operations matters. There are tactics adopted by the employers to reduce bargaining power and strikes of employees. Such as stockpiling of goods, make options and arrangements for outside contractors, options for striker replacements and lockouts, thus preparing in advance for the possible violence. Because of the financial losses arising out of the strikes employer can consider the union offer and put pressure on unions to return to work. 2. Analysis 2.1. Critically analyses and examines the conduct of collective bargaining as reported in the case study and as demonstrated in the recent negotiations that you attended. Collective bargaining can be identified as a distinct procedure taken by both employees and the executives mainly the employers in order to resolve the conflicts between them and to make an agreement of the employee bargaining, such as the rights of the employees and their duties regarding the work place and to improve their comfortability at the work place. this model of bargaining targets to attend the important and common issues of employees such as increase employees payments, flexibility regarding long working hours, necessary training and career improvement such as education opportunities to the employees. Health and safety of the work place specially the provisions for women employees, and rights to participate in workplace or company affairs. Collective bargaining is made to reach an agreement with the employers regarding the above issues. The first step in the bargaining procedure is that all the employees form a trade union and tend to represent their issues through a trade union. At Royal Mail dispute the Communication Workers have formed a strong union consisting of 120,000 members. The British Government legacy at Royal Mail has consistently been one of the contributory factors to rising costs and the postal workers are much less inclined to believe in new technologies that could reduce drudgery but at the same time would result in job losses. According to the postal workers they did not have confidence in the executives of Royal Mail to resolve their issues so they wanted to conduct a strike by distributing ballot papers among all their union members. As a result of the industrial action taken by the postal workers the services in recent weeks have been delayed thus creating a backlog of thousands of undelivered mail. The union is more likely to negotiate with a single employer, i.e. the government to reach an industry wide agreement. According to the Royal Mail case study the employees were engaged in a collective agreement. It was an agreement among all the workers as a contract with the government. Thus the union is acting as only the facilitator of the implementation of the guidelines laid down by the government. The bargaining power of the union is of high concern to the representatives or leaders of a trade union and employers equally in respect of salary and incentives , long hours of work, working environment of the place and conditions, grievance, and incentive scheme procedures. There are tactics adopted by the British government in order to control and reduce bargaining power of the Royal Mail trade union and uncomfortable strikes of the postal workers. Undesirable outcomes such as stockpiling of mails and telling the public that there is an urgent situation regarding the distribution of letters will hurt the government. The strike may completely disturb delivery of urgent letters and parcels to the many local citizens as well as to foreign countries. The hiring of employees from outside sources might help to ease the disturbance caused by the strike. The timely delivery of the mails and other options adopted by the government for striker replacements and lockouts also would have an impact in reducing the bargaining power of the stickers to carry the strike further. Thus the British government prepared in advance to control the strike and to control the possible violence because the government knew about the union's proposed actions. Thus due to the financial losses suffered by the Royal Mail and the union action postal workers were not confident enough to carry out the action further because they felt that their jobs were under a tremendous risk if the government wished to privatize Royal Mail due to its inability to carry out the operations. Employers can consider the union offer and put pressure on union to return to work. Thus the union raised the issue that the wage differentials between postal workers and the executives of the Royal Mail after the revealing the wage incentives that have been proposed to the CEO of the Royal Mail. This was a good bargaining card for the union members to justify the labor issues raised by them against Royal Mail. The triangular employment relationship is associated with the more recent developments in both white collar and blue collar employment to avoid the issues and to have fair wages between the executives and the labor (Edwards, 2003). 2.2. Reviews the success or failure of the process in creating or resolving conflict, together with alternative methods of conflict resolution such as arbitration and conciliation The disguise employment relationship is much more complex. For instance employers might adopt a variety of definitions in categorizing employment status such as open ended employee, formal worker, fixed term employee, agency worker and self employed home based worker. Whatever the employment status the majority of benefits arising from the employment contract are more likely to accrue to the employer as against the employee. Employer employee relationship might tend to conflict due to the unfair trade practices and the unequal treat to the employees by the employer (Blyton, & Turnbull, 2004). The employment relationship by using excuses will lead to create more problems and may end from a strike of the work place and creating disturbances to the regular work. When the employment relationship is impliedly disguised there is much less opportunity available to the employee to question the credibility of the employer's commitment to the terms and conditions of the agreement. There is no need to have a bad impression on employees to exist a conflict. If the conflicts can be solved quickly personal and also professional growth of the organization can be achieved. If there is a good understanding between the employers and employees in industry relations it will be easy to find the answers to the issues from the both sides. For this fact the management of the company should be flexible and should have an attitude of listening to the employee matters. Thus the employees should not demand any unfair requirements from the executives when the company is undergoing a strict financial control procedure. Efficient conflict resolution can build the team spirit and faith on every individual who are working in the company. The members of the organization tend to respect each other more when team spirit builds on them. There are four types of conflict resolution methods can be adopted to successfully deal with an industrial conflict and resolving it, such as negotiation with the union members to identify the exact failure from the management side and to have discussion to resolve it efficiently. Another alternative method can be identified as Mediation. Mediation is the process of adopting a third party member in order to involve in the conflict and to conduct the meetings for the both the parties, and to help both parties to generate the solutions and finalize the decision according the facts generated and considered through the discussions. Mediation is not a compulsory method so thus it is not a legal aspect to always follow. When considering negotiation method, it is an independent method and thus the participation of conflict parties are conducting the procedures without the help of anyone and there is no third party involvement, but in conciliation there are parties who are facilitating the process apart from the respective parties. Another alternative method of conflict resolution can be stated as the Conciliation. It regards as an alternative dispute resolution process; here all the relevant parties to the industrial dispute are attending to a common solution and thus finalizing a decision to use the expert knowledge and advice from a conciliator, conciliator is the person who coordinates the both parties together in an attempt to resolve their differences (www.acas.org.uk). He is the person who provides the technical assistants and reduces the aggressiveness of the persons of both parties. Thus encourages communication between the union and employers and gives the full support to resolve the conflict as soon as possible. Arbitration, is regarding another alternative method of conflict resolution and thus it is more towards a legal action to solutions to resolve the conflict. It is a settlement process and method that the court consisting the case and thus gives a fair decision that gives necessary satisfaction both the parties. Arbitration is a very important and effective method that comes to the role of conflict resolution. Thus it is most commonly used for industrial disputes; in global transactions arbitration plays a huge role in resolving employee and customer related conflicts. Today many companies have gone in to global market so they must be having many branches around the world. Dealing with employees who are working far than the headquarters is a much concern in the industry field. Because the difficulties with negotiations, wastage of time can be reduce if the company adopts arbitration method (Bratton, & Gold, 2007). According to the employers view this method can be either voluntary or compulsory. Thus there is a clear difference between conciliation and arbitration. In legal binding conciliation does not have any legal standing when comparing to arbitration. 2.3. Identifies whether disciplinary action might be taken by the company against any of its employees and also whether any grievances might be lodged by employees against the company Disciplinary action against the employees should be a progressive action and thus it is a process of dealing with on the work behavior. Any disciplinary action should be taken if the expectations of the management does not meet performance standards and to maintain violence free environment at the work (Beardwell, & Claydon, 2007). The main objective of the disciplinary action is to assist and pressure the employees to understand that well maintained discipline helps to boost the growth of the company and as well as boost the careers of the employees. Due to the strike conducted by Royal Mail postal workers the government has suffered a huge financial loss. Most of the government and private organizations are relying on the service of Royal Mail, because most of their business is depending on strong customer relations. Sending quotations and all the business documentation activities at Royal Mail encountered uneven delay of their services due to the employee's action. Due to this reasons Royal Mail executives have taken various disciplinary actions against the employees. Those are indicated bellow. Many of the postal workers are suspected due to the union action by the Royal Mail. After appointing a disciplinary committee, the officials found that certain employees willingly disturbed the process of negotiations and thus they have to be removed from their current positions (Wilkinson, 1999). The management felt that they should be suspended from the work at least for a period of two weeks. According to the decisions taken by the committee certain employees were suspected for two weeks and most of the employees were advised by the management and strictly under certain conditions promised by the employees were released, such as to obey the rules and not to take part any further union activities. Certain postal workers were replaced by some hired workers from various other sources as job sharing process. They were given a higher incentive and appointed only for a short period of time. After the strike the regular workers attended for the work the temporally workers were terminated from the job. Certain promotions of the postal workers were halted due to participation of the strike and unfair practices adopted by the union. And thus salary increments of some postal workers were halted to a certain period of time. 2.4. Suggests what should be done in order to protect either the company's position or an appellant's position at any subsequent employment tribunal. Royal Mail has to fear class action much in labor tribunals on the basis of its inability to come to terms with some trade unions (www.employmenttribunals.gov.uk). Such class action might compel Royal Mail to withdraw cases that it has already files or not to initiate legal action against offending employees. As a result the best suggestion is that Royal Mail negotiates with individual employees on the basis of individual grievances. However the recent developments in the sphere of employment relationship have demonstrated that a number of new factors have forced both employers and employees to mutually agree on certain non-extant or poorly defined rules and regulations (Gibb, 2001). For instance when the labor law is ambiguous the employment relationship becomes much more individualistic. In other words when an employment relationship does not exist it is almost impossible to define the legal outcomes such as rights and obligations of the relationship. In such a situation the Royal Mail and the employees could be developed a vague and individualistic employment relationship. Despite the general vagueness of many labor laws and social security provisions in the UK employers including Royal Mail have got in to recruitment drives with the intention of sign in employment contracts on this particular premise, i.e. they come to a mutual agreement on their individual understanding of the law. For instance the workplace health and safety legislation in the UK is variously interpreted by individual employers and employees (Burchill, 2008). In the same way the minimum wage rules have been often violated by employers on the ground that they are amenable to a variety of interpretations. In such a situation many employers and employees tend to agree on their individual understanding of the law, thus avoiding a strict legally defined employment relationship. The same applies to triangular employment relationship in which the employee might sign the employment contract with the agency rather than with the end-user. In such a situation the employment relationship might become too individualistic (Daniels, 2006). The same principle can be applied to the disguised employment relationship in Royal Mail, in which the employee is treated by the employer as a non-employee without the rights provided by law and therefore minus the legal obligations cast on the latter by labor legislation. In other words it is an individual arrangement between the employer and the employee. Secondly both employers and employees have informal arrangements that preclude intervention by the government or law enforcement authorities. Thus critics of individualized employment relationships have suggested that the existing gap between compliance legislation and the subsequent enforcement has been responsible for the extensive violation of labor laws and social security provisions (Fitzwater, 1999). 2.5. Considers the future recognition of the trade union together with alternative strategies that the company might adopt in order to manage its employee relations in the future in terms of either participation and / or involvement techniques Employment relationship can be too narrow when the law itself is narrow. Sometimes labor laws lack depth because they have been formulated to meet a specific need. As such they happen to be interpreted too narrowly since they do not have the provisions to identify and address all possibilities arising from particular situations in the workplace. Thus both employers and employees might stick to one narrow version of the law and arrange an individual employment relationship. Such convenient individual employment relationship can be regarded as the outcome directly related to the inadequacy of the law. The modern trade unions are a result and were a necessity due to industrial revolution started in Britain in early 17th century. Due to the complexity of the trade and commerce, certain labor rules and recognition of trade unions was needed to protect the employees and reduce the exploitation of labor. Many times capitalistic economy and socialistic factor conflicts each other regarding labor rights and unions. The recognition of most of the trade unions by government and the employers has been understood by the society and the working people to ensure the quality of life of the people and improvements of the conditions of working environment. Fair bargaining from the employee's side should be concerned by the employers and for this objective there should be an appropriate governing body such as ACAS and other labor regulations. There are considerable elements in discussions and negotiations. The parties can have an argument regarding required level to analyze the acceptable support from the whole workforce. The recognition of the trade union can be increased among employers if it does in the interest of the employees. And the activities undertaken by the trade unions should be according to the guidelines and pattern lay down by the labor authorities and accepted government institutions. Unions are not allowed to involve in violence and unfair union practices. It is obvious that Royal Mail is compelled by narrow and ambiguous laws to come in to agreements with employees outside the legislation. This means that Royal Mail has been familiar with such individualistic and informal employment relationship because more often than not employees have a tendency to accept what if offered unless they have very high marketable skills (Hunt, 1987). The disguise employment relationship is much more complex. For instance employers might adopt a variety of definitions in categorizing employment status such as open ended employee, formal worker, fixed term employee, agency worker and self employed home based worker. Whatever the employment status the majority of benefits arising from the employment contract are more likely to accrue to the employer as against the employee. Employers might tend to disguise the employment relationship by using excuses. When the employment relationship is impliedly disguised there is much less opportunity available to the employee to question the credibility of the employer's commitment to the terms and conditions of the agreement. In other words in the spirit of the letter, the agreement will be formal as far as the employee's obligations are concerned while employer's obligations can be held in abeyance because it is the latter who interprets it. In the first scenario employers enter in to employment contracts with employees in accordance with statutory requirements. Assuming that certain statutory provisions do apply to the type of employment status within strictly defined limits, the employer might be compelled to comply with such provisions. However the extent to which he will comply with them depends on the employee's willingness or unwillingness to accept some limitations. It is here that disguised employment relationships come in to existence. In the same manner an employer can apply duress on the employee to fall in line with the formers needs such as not to join a trade union. However this is actionable liability on the part of the employer. In the absence of statutory protections for either party a disguised employment relationship can be the next best alternative. This reality is not lost on many employers and employees who have entered in to informal agreements. In conclusion it must be said that the employment relationship has becoming more and more individualized due to a number of factors. They include those related to the ambiguity and limited scope of labor laws; the implied absence of the employment relationship; the uncertainty about who the employer is; lack of enforcement and compliance; the triangular employment relationship and the disguised employment relationship (Rollinson, & Dundon, 2007). The above mention factors have contributed in large measure to individualize the extent to which informal employment relationship can exist. In other words the legally defined work place relationship between the employer and the employee has become rather individualistic to a greater extent depending on a number of endogenous and exogenous variables such as employers' preferences, employees' willingness to accept such relationships and even time related economic pressures such as the current global economic recession. Therefore the limitations that have cropped up against government and institutional efforts to curtail informal individualization of the employment relationship are many. However the problem is widely prevalent in some sectors in the economy while other sectors are relatively free. References 1. ACAS - for information on employment regulations and dispute resolution, retrieved from, http:// www.acas.org.uk, on May 17, 2010. 2. Beardwell, J & Claydon, T 2007, Human Resource Management - A Contemporary Approach, Pearson, Harlow. 3. Bennett, R 1999, Employee Relations, M&E Pitman, London. 4. Blyton, P & Turnbull, P 2004, The Dynamics of Employee Relations, Palgrave, Basingstoke. 5. Bratton, J & Gold, J 2007, Human Resource Management: Theory & Practice, Palgrave, Basingstoke. 6. Burchill, F 2008, Labour Relations, Palgrave, Basingstoke. 7. Daniels, K 2006, Employee Relations in an Organizational Context, CIPD, London. 8. Darlington, R 2009, What is the Point of Industrial Relations In Defense of Critical Social Science, BUIRA Manchester. 9. Edwards, P 2003, Industrial Relations: Theory and Practice, Wiley-Blackwell, Oxford. (pp. 37) 10. Employment Tribunals Service - for information on employment tribunals, retrieved from, http://www.employmenttribunals.gov.uk, on May 17, 2010. 11. Fitzwater, TL 1999, Manager's Pocket Guide to Employee Relations, HRD Press, Amherst. (pp. 20) 12. Gibb, S 2001, 'The state of human resource management: evidence from employees' views of HRM systems and staff', Employee Relations, vol. 23, no. 4, pp. 318-336. 13. Hunt, JW 1987, 'Predicting Differences in Employee Relations Practice from Values and Beliefs of Managers', Personnel Review, vol. 16, no. 3, pp. 9-15. 14. Rollinson, D & Dundon, R 2007, Understanding Employee Relations, McGraw-Hill, Maidenhead. 15. Wilkinson, A 1999, 'Employment relations in SMEs', Employee Relations, vol. 21, no. 3, pp. 206-217. Read More