Employment Relations Concept - Essay Example

Task Introduction The last quarter of the twentieth century has seen the decline of traditional industries and the enormous growth of the service sector that has coincided with the steady decrease in British union membership from 13 million in the early eighties, to 8 million in the late 1990’s. This paralleled the increase in the use of human relations practices and new forms of work organization that provided the basis for good relationships between staff and their employers. This lead to the introduction of employee relations as a concept that broadened the study of industrial relations from a union focus to include wider aspects of the employment relationship, including non-unionized workplaces, personal contracts, and socio-emotional, rather than contractual arrangements. (Taylor & Bain, 2005) In Australia, the legislation change further decentralised employee relations systems to provide employers considerable power in their ability to dismiss employees and to promote individual contracts without the protection of awards and collective agreements. There is an increase at the international level for employers using contractual employees and require longer working hours in their quest of labour flexibility. There is an assumption that labor markets are not purely competitive, and when you compare this assumption to the mainstream economic theory, employers have more negotiating power than employees do. It is also assumed that there are natural conflicts between employers and employees, for example, high profits without increase in wages could cause conflicts hence conflicts are viewed as a vital part of the employment relationship. Since labor markets are seen as imperfect and employment relationships include conflicts of interest, workers cannot depend on markets or their superiors to protect their rights, and in extreme cases to prevent worker exploitation. Therefore, institutions need support in the endeavor to protect rights of workers. Narrow Focus In many organizations, an issue that arises out of industrial relations is a narrow focus by the employees of the organization. Employees or staff members may view tasks at hand as duties they have to perform to complete their job rather than viewing how the role the employee plays benefits the organization as a whole. Many employees simply see their managers as someone who tells them what to do rather than as a facilitator that can help them achieve their own professional goals as well as bring the company to a point where it achieves the goals of the business. Inflexibility of Employer An inflexible employer stifles the employees’ creativity and when employees feel as if their creativity is being stifled or that their opinions do not matter, it can cause rivalry between the employees and management of the organization. When creativity is squashed, it causes the company to lack in innovation, which ultimately leads to incompetence of the company in the marketplace. Employers that allow employees to participate in running the company by allowing suggestions and feedback from the employees and even empowering employees to take on more responsibility for the route the business takes, typically enjoys a more successful employment relations environment. Thus, the poor pay package of employees at Rio Tinto and its inflexibility as an employer has adverse effects on its employment relations (Hannan, 2011). Division Another issue that directly relates to employment relations environment is an “us against them” attitude in terms of Rio Tinto and its employees. Employees have the notion that there is a great segregation between them and the management or their superiors in the workplace. This division between the two groups of a business has caused a lot of issues such as contract negotiation problems, strikes and the required intervention of trade and labor unions. When management and employees can relate and communicate with each other, they easily solve their problems, such as not being able to negotiate work contract agreements or having to bring in the labor union to negotiate the terms and conditions between employees and management. This is the case between Riot Tinto and its employees with the introduction of AWU into the issue. Employment Relations Legislation The employment relation legislation is the law, which is used internationally to define the relationship amid an employer and their workers. The employee carries out his work under certain conditions and expects a salary or wages. It is through the employment relations, however, that rights and obligations of both of them are stipulated. Employment relations has been, and continues to be, the main means through which workers gain access to the rights and benefits associated with employment in the areas of labor law and social security. It is the key point of interest when establishing the nature and extent of employers’ rights and duty to their workers. Therefore, Australia must have a fair and equitable employment relations system for all workers and all individuals should be given the right to have the permission to pursue their well-being in terms of freedom and dignity, economic security and equal opportunity in accordance to international labor laws. Thus, the case against Rio Tinto is a legislative issue in that it infringes on the right equity and proper remuneration of employees at their work place. There are profound changes occurring in the world of work, and in particular, in the labor market, these have given rise to new forms of relationships, which do not always fit within the parameters of the employment relations. While this has increased flexibility in the labor market, it has also led to a growing number of workers whose employment status is unclear. In the case of employees at Riot Tinto, who were being paid less for the same work that other employees in the mainland were being paid, they were outside the scope of the protection, which is normally associated with an employment relationship. The laws governing the employment relations are important components of national policy for managing the labor market while considering flexibility and security of the employers and employees. Thus, this case is a legislative issue that must be taken into account and proper laws put into place to protect employees from such situations, and that laws for just and equitable remunerations are put in place. Role of State in Issues Affecting Employment Relations The State plays a key role in the creation of an enabling institutional framework to balance the need for flexible enterprises and security for workers in meeting the evolving demands of the global economy (Gennard and Judge, 2005). At the heart of national policies to meet the social challenges of globalization is a dynamic strategy for managing labor market change. The approach suggested globally is to achieve industrial peace through protecting and promoting of social welfare of labor. It means that, apart from acting as the arbiter of social conflict, the government should take a proactive role in the reduction of social and industrial conflicts by acting on its source in this case media reports on the Rio Tinto affair, that is, by improvement of the institutional arrangements to welfare of labor and its share in the wealth of the nation. Two concepts may be useful in discussing the objective of the state ensuring equity at the work place. The first refers to the idea of decent work, which is what should be done to promote the welfare of employees and the other to the principle of subsidiarity that shows how and what can be done by the social partners for the same purpose. Decent Work The concept of decent work has been adopted by the International Labor Organization as the main standard that governs their actions. According to the ILO, decent work has four main standards to uphold, which are promoting respect, generating decent and productive employment, improving social protection and encouraging social dialogue among employers and employees. Principle of subsidiarity This is where the principle of subsidiarity becomes a useful concept. This principle states that each or a combination of the social partners should be doing what they are good at. For example, determining what firms and industries can afford in terms of labor welfare and social protection can best be left to be a negotiation amid employers and trade unions. The role of the state is to ascertain that the two parties stick to policies, even more precisely, to promote an environment where fair bargaining can operate. This has not been the case with Rio Tinto since it has not been abiding by the agreed policies thus the government has to come and ensure that these policies are implemented. Impact of Employee Voice An employment relation is concerned with power and control in the employment relationship and the degree to which management is ‘free’ to make decisions freely. Thus, a key dimension of employee relations is the means by which employees are able to influence employers’ decisions. Employee ‘voice’ is used to refer to a variety of processes and structures that enable, and empower employees directly or indirectly to contribute to decision-making in the firm. There are a number of mechanisms through which employees can contribute to or share in decision-making with management. Traditionally, the pressure for employees to be allowed ‘a say’ at work has risen from notions of industrial democracy or industrial citizenship (Gollan and Wilkinson, 2007). At Rio Tinto, there has not been much room for employees to voice their concerns hence resulting to the current stalemate within the company. Lack of willingness from managerial staff to allow the employees voice their concerns leads to lack of loyalty in the organization, which may lead to employee exit and other expressions of dissatisfaction resulting to low productivity from employees. Partnership between management and employees does not exist in the organization thus employees join unions such as AWU to voice their concerns. Employee commitment and identification with aims and goals of the organization has also deteriorated immensely among the employees due to the fact that there is no employee influence in decision making. Management Approach in Resolving Employment Relations Issues Organizations today use consensual approaches to resolve conflicts rather than use litigation or administrative measures to resolve the disputes. Incase of a problem, it is important for both parties to have a clear idea of the issues, check the facts and make sure that both sides have the time and opportunity to take advice and think through the issues (Gennard and Judge, 2005). Taking advice at the early helps ensure both parties to the conflict are aware of their options in the circumstances. If the problem is about understanding or agreeing on minimum employment entitlements, such as pay as in the case of Rio Tinto, a labor inspector from the Department of Labor can help.  Every employment agreement must have a clear enlightenment of the processes to be followed when solving employment disputes. This explanation should be short and simple and should be written very clearly, so that all parties know what processes they are required to follow, what their rights are and what happens when a problem is raised (Barnes, 2005). It is important both parties act in good faith in trying to resolve any problems directly. Rio Tinto and its employees should use a mediator settle their differences quickly, which will be with less formal support and cost than a formal process. The Department of Labor provides a free mediation service which can help. Also the organization and in this case Rio Tinto should consider employee involvement towards resolving this issue. Employee involvement seeks to harness the talents of employees through the taking their views, opinions and ideas to identify and address organizational problems. However, EI should not be a form of ‘power-sharing’ between managers and employees in eventual decision-making because such might be regarded as a relatively weak form of voice in that while it seeks to engage employees and provide a channel for employee expression it preserves management’s right to make decisions and generally provides for limited employee influence. Therefore, EI is underpinned by the assumption that managers and employees share common interests, and that management retains fundamental control of decision-making. Conclusion Many issues of employment relations are concerned with a company's treatment of its employees and workers. What used to be domestic issues of labor management are now global issues and this is because globalization. When the influence of one principal used globally is perceived to be relevant than others, it triggers a possible examination of that principal's relationship with its home-based workers, and possibly even doubt and uncertainty of future transactions. Today, employment relations are in crisis and its earlier positions have continuously been threatened by the supremacy of mainstream economics and organizational behavior. The employment relations emphasize on institutional intervention in ensuring that employees are protected and job satisfaction is upheld. References Barnes, A. (2005). Trade Unionism in 2005. Journal of Industrial Relations, Vol.48, Iss.3. eHOW.com. (2011). Issues on industrial relations. Demand media. Retrieved on November 29, 2011from: Gennard, J and Judge, G. (2005). Employee Relations: People and Organizations. London: CIPD Publishing Gollan, P and Wilkinson, A. (2007). Employee Representation in Non-Union Firms London: Sage Publications. Hannan, E. (2011). Rio Tinto Paying below the Rate, Union Leader Claims .The Australian News. Retrieved on November 29, 2011from: Schneiders, B. (2011). Workers to Fund TV Ads on Rio Pay. Fair Max Media. Retrieved on November 29, 2011from: Read More