Employment Relations in Britain - Case Study Example

Employment Relations s Full Full Employment Relations Introduction Relations between employers and employees are essential to raise productivity and confidence between the employer and the employee. The purpose of this paper is to explain how living wages relate to the labour movement and how does the labour movement relate to the living wage. The living wage means that labour should receive adequate compensation for the time spent working so that he can afford the basic essentials for himself and his family like food, shelter and clothing. This paper also examines the various measures taken by labour to get employers to accede to their demands, such as collective bargaining and resorting to strikes (work stoppage) in support of their demands. References are also given about different stages of employment relations starting from the beginning of the industrial revolution which resulted in mass production and mass employment. It is also why labour pressed for living wages and why labour movements at different times are connected to the living wage (Blanchflower et al., 2007). Literature Review Literature review for the paper was written by taking into consideration both hypothetical and practical aspects of the manner in which living wage is connected to the labour movement and why labour started the movement to be paid a living wage. Research for a living wage is quite a debatable area, and there are many different theories regarding the inception and implementation for a living wage. The review examines a few theoretical aspects and then reviews empirical evidence of some contemporary findings. Analysis of the literature suggests that the issue raised is pragmatic which must consider the framework of negative or positive domestic local factors that contribute to the overall analysis of current and past relationships between employers and employees. Conceptual issues involved were reviews which included the progression of employment relations since labour started demanding a living wage. Nevertheless, the purpose of the review is to evaluate the available evidence to reach a coherent conclusion about relevant viewpoints of employment relations. The demand for minimum wages depends upon different factors such as the overall demand for labour, skill required for the job and the cost incurred by the employer for the product. The most difficult aspect of this is calculating wages considering outside influences. Literature for the different aspects of individual and collective bargaining, including various steps taken to improve the relationship have been discussed in this paper (Coats, 2010) Several secondary sources were used which included papers from journals, books and articles derived from several publications. Economically, an increase in the minimum wage would lead to an overall increase in remuneration without considering whether this would lead to an increase in production. The negative repercussions from wage increase could be that the employer decides to hire less skilled labour at lower wages or install machines that could substitute for labour (Eironline, 2009). The information used for this review was accessed from different sources and was evaluated for its contribution to the understanding of the paper and also for understanding the reason for wages issues affecting employment relationships. All information that was part of the paper was taken from different sources. The facts given in this paper all have a historical perspective beginning with the advent of the industrial revolution. These facts are shown in their chronological progression and are being currently reviewed and updated (Bryson, 2005) How does the living wage relate to the labour movement? The idea of a “living wage” took roots in Britain in the 1870’s, with the beginning of the labour movement when the work force had the ability to negotiate over their share of profits through their representatives for a subsistence take-home pay. This is mentioned in the Literature Review citing the major reasons for a demand for wage increase. John R. Commons set up employment relations as an institution when he founded the first academic industrial relations program at the University of Wisconsin in 1920. John D. Rockefeller supported this program when he saw the need for reforms in labour-management because of a strike that took many lives in Rockefeller owned mine in Colorado. Another reform minded industrialist in Britain Montague Burton, endowed chairs in industrial relations at Leeds, Cardiff and Cambridge in 1930. Alan Flanders and Hugh Clegg made this discipline official in the 1950’s with the creation of the Oxford. Peter and Wilkinson, British Industrial Relations Paradigm: Ackers & Wilkinson (2005) “A Critical Outline and Prognosis: Journal of Industrial Relations”. Industrial/Employer relations were organized with the intention of solving management-labour problems that discarded the Marxist resolution of class revolution and the accommodating, nonjudgmental s attitude of economists. In effect employment relations came into being at the end of the 19th century as a focal position between classical economics and Marxism. Employment/industrial relations were based on Sidney Webb and Beatrice Webb’s Industrial Democracy, and was the major academic work which rejected both extremes of employer relations. It is this methodology that is the foundation of the New Deal which has resulted in the National Labour Relations Act and the Fair Labour Standards Act (Barry & Wilkinson, 2011). This was the best substitute for the demands of early trade unions who advocated socialist reform to replace the principles of “supply and demand”. Workers were collectively demanding enough money that would allow them to afford the basic requisites such as food, shelter and clothing for themselves and their families in place of payments based on the unpredictability of the laws of supply and demand. A century later the modern version of this line of reasoning by labour is to resort to work stoppages or ‘strikes’ to press for their demands. With the economy in dire straits, and politicians anxiously trying to prevent calamity by taking austerity measures, the demand for living wages is again gaining momentum. They feel that there is a dire need to change the composition of the economy including the dispersal of affluence. The campaign in London for living wages in coordination with comparable change causing events in other parts of the world is doing just that (Ackers & Wilkinson, 2005). Most public and private sector companies can and should be paying a living wage, and there are several reasons why a living wage as well as a national minimum national wage is needed. The “National Minimum Wage” is paid at market levels and not at the real cost of living. This wage is an indication of current market rates and not what is in fact a real living wage. An averages worker earns just a little less than 12,000 pounds in Britain is less than what a single person without any dependents needs. Research has confirmed that a person living in council housing needs at least 13,400 pounds a year to maintain a decent standard of living in the UK. This is quite more than the national minimum wage. The living rate in London is around 15,000 pounds which is twice the National Minimum wage. A lot of workers in London (around 400,000 people) are earning much below the living wage rate. Studies have found that most workers earning well below the NMW are migrants who do not have access to workers benefits. Most workers work at 2 or 3 jobs, and live in shared accommodations to make do with what they earn (Budd, 2006). The reason for low wages is that wealthy employers subcontract work to the lowest bidder which saves the employer a lot of money, but keeps wages low for many services and workers. The real beneficiaries of the low wages are the clients. It is easy to blame the subcontractors for low wages, but they have been forced by competition to bid for tenders at low prices which make it practically impossible to pay higher wages even if they wanted to. In comparison, large private companies make large profits by not paying tax and save money by subcontracting jobs like cleaning, catering and security or by having their work done overseas. How does the labour movement relate to the living wage? The labour movement relates to the living wage because the movement came into existence because labour was not being paid fair wages as compared to the profits that the employers were making. The remuneration being paid to labour was calculated on the basis of supply and demand. This means that the workers were not paid a fixed salary, nor were they given any additional benefits as compensation for the time that they spent working. They were paid an hourly rate, or only for the quantity of work that they had done. The amount paid was not sufficient for the workers to exist at the bare subsistence level. Wage rates are influenced by market forces that take into account demand and supply of the product. The literature review (Parcelle, 2013). The labour movement for a fair economic deal for workers was formed to address the economic injustices that were perpetuated because of the strong bargaining position of the employers. A little over a decade ago the labour recent movement began which has since then evolved into an effective strategy to engage in different ways to raise wages and workplace standards. The current labour movement was initiated in 1993 for which several ordnances were approved, the first being in 1994. The approved policy was then implemented in many municipalities in the country. In the following years, the labour movement moved beyond the traditional wages system ordnance to include other aspects for worker compensation (Lorenz & Valeyre, 2005). Employment relationships consist of three main aspects: skill construction, problem solving and principles or ethics which aims to comprehend employment relationships with all its manifestations through comprehensive research. In this context, employment relationships encompass labour economics, industrial sociology, labour and social history, human resources management, politics, law and many other areas. The .Literature Review cites where such measures are applicable (Blanchflower et al., 2007). Employment relationships are based on the presumption that labour markets are unevenly competitive, which gives employers greater bargaining power over employees such as higher wages versus higher profits. Conflict is regarded as a natural component of the employment relationship, therefore this takes into consideration the different institutional measures that describe and influence employment, from standard patterns of behaviour and power functions in the workplace, to employee bargaining power, both individually and collectively at company, regional and national levels. This also takes into account different levels of public policies, government regulations for different types of capitalism such as corporatism which refers to political and social organizations that cause participation of people into corporate groups like business, agriculture, racial and cultural, military, labour, investment or systematic associations for the pursuance of common interests (Jared, 2004) When labour markets are flawed and not perfect, and when disagreement is fundamental to the employment relationship, then it is not possible to place reliance upon markets or managers to give preference to the interest of workers or to prevent management and employers from taking undue advantage of their superior bargaining power. For this reason the employment relations professionals’ support organizational action to help develop and expand the employment relationship which gives protection to the rights of workers. The forms of organizational actions are different between groups of employment relations practitioners. The existence of different groups views the employment relationship as a combination of common interests and disagreements that are mostly restricted to the employment relationship (Willis, 2009). For that reason groups in the workplace support complaint measures and employees favour working bodies such as works councils and labour unions, communal/ cooperative bargaining and effective and congenial relationships between labour and management. Policy makers are in favour of laws that afford minimum wages, work-related health and safety measures and other relevant employment laws and civic contracts. These organizational interventions are regarded as means for bringing equilibrium to the employment relationship to create economic competence but employee impartiality and the right to be heard. As opposed to this, Marxist motivated analytical groups regard employer-employee disagreement as highly aggressive and intensely entrenched in the socio-political financial arrangement. From this point of view, the search for an impartial employment relationship gives excessive influence to the interest of employers, for which strong reforms are required to modify the deep hostile employment relationship that is an essential part of capitalism. Therefore groups therefore tilt towards a military form of trade unionism. Employer/employee relationships are strengthened and are evident in minimal employee turnover, high employee morale which increases productivity and job satisfaction (Levi et al., 2002) Conclusion This paper has attempted to describe the various aspects and stages of employer/employee relationships and the importance of a living wage for employees. It is in the interest of employers to make the most money for its owners and shareholders and they have found various ways to maximize their profits. This includes subcontracting and manufacturing done overseas to minimize costs. Since subcontracting is tendered and awarded to the lowest bidder and efforts by the subcontractor to raise wages is not possible. Subcontractors only pay by the hour and save employers millions of pounds in benefits, gratuities and pensions. This is a field that covers an extensive range of subjects which attempts to define ways that the interest of both employers and employees are adequately looked after. Employment relationships started when products began to be mass produced. It has not exactly been a smooth relationship due to the weak bargaining power of the worker (Taylor, 2013). However, with ordnances being promulgated and collective bargaining becoming the norm, labour eventually started getting what was its due. However, collective bargaining sometimes gave too much power to the unions. However, with the current state of affairs with the world economies has placed employer relationships in an entirely different perspective. Because of gigantic advances in communications and technology, employer relationships are now seen in a very different context. Most multinationals now outsource work that can be done overseas mostly by workers in Asian countries. This has created a lot of joblessness in industrialized countries because multinational are outsourcing manufacturing to other countries with a cheaper labour force. Manufacturers cannot compete in international markets because the cost of products rise considerably with the higher wages that constitute a living wage for workers of western nations because of their very high standards of living which have made their living wage quite high as compared to Third World counties (Alex, 2011). State intervention and subcontracting has further added to the woes of workers. Both these factors enable large companies to avoid their moral responsibilities to the workers with whole labour they have enriched themselves. Subcontractors serve as the buffer between workers and employers, and employers have absolutely no contact with the people who are indirectly employed by them. Employers should know and respect people employed in their industries. The quality of life of low paid employees must be improved, and efforts must be made to try and avoid subcontracting would fulfil the objectives of communal inclusion. This would alleviate poverty and give new skills to nations. According to experience gained at Queen Mary University, the above measures would improve the quality of work carried out (Alex, 2011). List of References Ackers, P. & Wilkinson, A.J., 2005. British Industrial Relations Paradigm: A Critical Outline History and Prognosis. Social Science Research Network, 47(4), pp.443-56. Alex, B., 2011. Employment Relations in Britain. Cambridge: National Institute of Economic and Social Research. Barry, M. & Wilkinson, A., 2011. Research Handbook of Comparative Employment Relations. Camberely: Edward Elgar Pub. Blanchflower, D.G., Bryson, A. & Forth, J., 2007. Workplace industrial relations in Britain,1980-2004. Industrial Relations Journal, 38(4), pp.208-302. Bryson, A., 2005. Union effects on employee relations in Britain. Human Relations, 58(9), pp.1111-39. Budd, J.W., 2006. Values, Ideologies and Frames of Reference in Employment Relations. London: Sage Handbook of Industrial and Employment Relations. Coats, D., 2010. Time to cut the Gordian Knot. London: The Smith Institute. Eironline, 2009. Europen Industrial Relations Observatory online. [Online] Available at: http://www.eurofound.europa.eu/eiro/country/united.kingdom_2.htm [Accessed 3 March 2013]. Jared, B., 2004. he Living Wage Movement. What Is It, Why Is It,and What’s Known about Its Impact? Chicago: National Bureau of Economic Research. Levi, M., Olson, D.J. & Steinman, E., 2002. Living-Wage Campaigns and Laws. Working USA, 6(3), pp.111-32. Lorenz, E. & Valeyre, A., 2005. Organisational Innovation, Human Resource Management and Labour Market Structure. The Journal of Industrial Relations, 47(4), pp.424-42. Parcelle, J., 2013. History of Industrial Relations. [Online] Available at: http://www.scribd.com/doc/12496059/Industrial-Relation-History-Of [Accessed 4 March 2013]. Taylor, R., 2013. The Future of Employment Relations. Swindon: An ESRC Future of Work Programme Seminar Series. Willis, J., 2009. The living wage campaign shows we can remake the moral economy – there has never been a more timely endeavour. Labor List, 27 February. pp.2-4. Read More