Management of Industrial Relations - Essay Example

Management of Industrial Relations Employer organizations can be defined as formal groups of employers that have been set up with the objective of defending and advising affiliated employers as well as empower them especially in respect to labor matters. In a formal context, Employers’ Associations were recognized as a result of the formation of the International labor organization (ILO) as well as the growing power and presence of trade unions. To appreciate the scope and influence of employer unions in Australia, one can briefly examine the Australian Federation of Employers and Industries (AFEI); founded in 1903, it is unequivocally the oldest employers group and most respected advisory organization (Plowman, 1988). For the better part of a century, it has played a key role in the representation and advising of employers all over Australia and their employment law experts have been actively involved in majority of the test cases in the industrial jurisdiction of fair work Australia (Australian Federation of Employers, 2014). AFEI is a nonprofit organization and its membership spans over 3,500 with more than 60 affiliated industry associations, today, their key role is advisory and they also represent and assist employers in as far as meeting their obligations in respect to workplace relations in concerned. They may or may not include collective agreements and unlike trade unions which are comprised of individual workers, employer organizations allocate membership to enterprises instead. However, most of the legal terms that are used to define trade unions can also be applied on employer organizations. It has been argued that employer organization is simply the employer’s response to trade unions which by virtue of their numbers and activism tend to have considerable power over employers. While this is debatable, it is not by any means simple, employers’ organizations to a large extent are indeed the response to trade unions but they also serve other purposes that have no bearing on the issue of labor. There has nevertheless been an extensive history of antagonism between trade unions and employees organization which gives credence to the assumption that in many ways their interests are mutually exclusive. In the 1890’s in Australia, powerful worker unions tried to dictate to the ship owners what goods they should carry this was done through a strike that threatened to bring down the shipping industry and which rewired over 2000 constables to manage. However three years after the fact, the ship-owners had come together and in response to the depression, they acted in unison and unilaterally cut the wages by 25%. Predictably the workers unions took the offensive and tried to response by staging a strike, the ship-owners organization however turned the tables on them and dry-docked every shipyard where the workers refused to accept the new terms, This was a fatal blow for the Australian seaman’s union and within six weeks it was crippled and rendered ineffective and ceremonial at best. This is evinced by the fact that after this confrontation, there wasn’t another marine time strike in Australia for the next 23 years. It is based on such incidences that the relationship between the employer organization and trade union was founded, although such extreme incidences are uncommon in contemporary Australia it is evident that employer organization are capable of responding in kind to trade unions. In the making of the Australian constitution, the founding fathers were faced with a number of issues especially in respect to their approach to industrial relationships; despite the influence of the British in the constitution, the decentralized British approach to indusrtila relations was not applied. The constitution was created in the backdrop of fluctuating commodity prices, depression in trade and industry as well as an escalating unemployment rate characterized by insolvency of employers and retrenchments in the public sector. Employers had a hard time utilizing the glut from unemployed labor since in most cases the unions virtually held them captive to their demands. Eventually when the employer organizations were formed, their concern lay less with the issue of inefficiency and high labor cost and more on protecting member enterprises from manipulation by unions. They were cognizant of the fact that since most employers suffered from the same labor related inefficiencies, the system would ensure that employers would make uniform settlements with unions thus strikes would be more likely to be industry wide and thus avoid putting particular employers at a disadvantage. Before commencing on a comparison and contrast of the two, the roles and functions of the employer unions in Australia will be independently discussed. In general there are numerous reasons given for the formation of employer association and these are primarily justified by the roles these originations are deemed to serve. There three major reason that are propounded for the formation of such organizations, for one, there is the need for employers to combine so they can counter the ever increasing power of trade unionism ranging from established unions for skilled employees to modern ones with semi-skilled and unskilled workers. This is process which as aforementioned was commenced in the late 19th century not only in Australia but most of the western world. The coordination of employer came in hardy to resist the trend of Whipsawing; a process through which workers unions would individually take down a single employer and force them to increase wages and improve working conditions (Barry & Wilkinson, 2011). This often made the target employee weak and in the face of the union were forced to capitulate to the demands even when they were not in their best intrest, and unions maintained a considerable leverage in as far as company level bargaining was concerned. Through this version of “divide and rule”, the unions would use one establishment to set an industry wide pattern and by allowing the rest of its workers to remain in employment they strike fund was replenished. The second role of employer organization is to combat and seek to influence the encroachment by the state government which in the past had started to regulate employment. This process occurred form most countries towards the end of the 19th century, the national governments tried to control the labor market by setting up minimum wage, maximum working hours health regulation and introduction of collective bargaining laws (Cooper & Ellem, 2008). However through employer coordination, the leaders in the various companies came up with a way to lobby the movement and influence industrial relations on matters of trade. Today, the same role is played by employers’ unions’ world over, given the powerful nature of the corporate world in modern economics employers can have considerable sway over government actions as long as they speak in one voice (Howell, 2005). The third role of employer organizations which is unfortunately often neglected is the fact that they management the competition between employer. Taking to account the desire of most employers to achieve a decentralized and deregulated industrial relations system in recent years, one must recognize the fact that the main objective by many of these employers was to facilitate multi-employer coordination. Industries such as textile and coal mining for instance sometime agree to pay wages that are higher than the market clearing level and even work in harmony with trade unions so as to ensure that the competition is kept in line. This is often done to prevent undercutting by the competition; in addition, it is worth noting that larger employers sought to impose standards terms and conditions for their smaller competitors (Traxler, 2008). The key to understanding the various types of employer coordination is more than just the result of an aggregation of the mutual interests of the employer, on the contrary, employer intrest are inherently heterogeneous and when they conflict .In effect the conflicting of these interests would ultimately undermine their collectiveness as well as solidarity therefore weakening the concept of employer coordination (Broad, 2001). The understanding the underlying diversity of interests encompassed within the larger employer associations is imperative in providing clues as to how associations can re-invent themselves through the provision of multiple services. In the face of reducing influence of trade unions, employer associations in Australia have in modern times been more pronounced in their efforts to integrate the provision of traditional collective goods such as collective bargaining and coordination of industrial action. In a broad sense, it would appear that employer associations have gradually developed and reinvented themselves to some extent in such a way that they play the role of employment and labor management advice provides for small firms without in house, public relations facilities. On the other hand, the larger firms with HR functions whose labor is likely to be unionized are also likely to be members of an employers’ union for the sake of sheltering themselves from the power of powerful worker unions (Traxler, 2008). For any element of labor regulation to be effective, there must be compliance with certain minimum standards, while the government plays a role in enforcing them non state actors such as trade unions and employee organizations also play and active role. In Australia trade unions have historically been instrumental in the promotion and securing compliance with labor laws, the fair world act of 2009, continues to uphold and recognize the function of unions in respect to regulation and provides their members with the right to access work places for purposes of checking on compliance In addition hey can apply for court orders when there has been contravention of the act by an employer on behalf of the employee/s. It is however worth noting that in recent years, the density of trade unions has been significantly eroded in the face of a more effective and better resourced government inspectorate as well as the corporation of employers which as discussed above has tended to reduce the effectiveness of unions(Behrens and Helfen, 2009). The importance of trade unions is underscored by the numerous benefits their role portends for both the employees and the public. For one, they are motivated and have a significant capacity to monitor the extent to which employers comply with the labor laws; this is especially because they have a higher workplace presence through delegates employees who have direct contact with the conditions. In the absence of a labor union, institutional arrangements that affectively align their intrest with the workforce are difficult to conceptualize. Ergo, trade unions can also play a role in the assistance of individual employees who may have a legal right to enforce individual entitlement but lack the knowledge on how to go about the whole process. This is especially useful when the entitlements being pursued are small sums which the employers may neglect and the employee fear to pursue to avoid possible employee reprisals including but not limited to being fired. The unions also educate both the employees and in some cases the employer on matter concerning labor laws so that the former can know when they are being exploited and the latter can avoid causing friction with the employees or union. Like employer organization, trade unions primarily empower the members by through the pooling of many parties with mutual intrest in the industrial process. Unions provide an avenue through which workers can present their grievances and express disaffection to their employers on a common forum and minimize the risk of individual reprisals. Their methods of protest are varied and they are often determined by the nature of the grievances of the employer in question and their retrospective attitude towards the workers. In Australia unions commonly organize strikes, go slows, and pickets but only when dialogue has failed to work or when the firm in question is unwilling to sit down with the union members. Unlike employer organization, trade unions only register individual members; employer organizations on the other hand register entire companies that have mutual trade related interests. In addition, the scope of the trade union’s intrest mostly limited to agitating for rights of the workers in terms of working conditions and wages, however employer organizations carry out more numerous purposes such as giving financial advice and human resource functions. Both parties tend inevitably seek to increase the benefit to their members while reducing cost which in most case is the main source of antagonism (Colling, 2006). The trade unions will demand softer hours and higher pay than the employees organizations find acceptable or affordable until a compromise is arrived at. Although trade unions are not as effective today as they used to be in the past, they still wield considerable power and it in fact only the “unionization” of employers that some of this power has been curbed (Daniel, 1957). As intimated earlier in this paper, employer unions were motivated primarily by the need to control the trade unions which used divide and rule to zero in on one player in the industry and isolate them after which they would force their demands on them. With employer organizations, it has become difficult for trade unions to do this since most industries that have employer organizations provide roughly the same pay and working conditions. As a result, unions are forced to take on the whole industry and because of the united front employers are better able to improve their bargaining position. In a way, employer organizations actually borrowed from trade unions and by pooling their intrest together they are able to use the same tactics as their opponents who draw their strength from numbers. At the end of the day, employers association can be seen as providing a counterbalance to the labor unions by helping in the organization of resources and promoting their interests. Majority of the employer organization such as the AFEI engage in lobbying and engage in political activism aimed at promoting legislation that favors employer in the same way the unions do. However employers tend to use their financial clout as a bargaining chip while labor unions capitalize on the strength of numbers. At a general level, it is true not only for austral but most of the developed world that employer associations just like labor unions tend to be vulnerable to structural changes in the economy that make any form of organizing difficult. One of this is the growth of employment in small firms that may not be affiliated to either while the hiring rates at the big industries especially manufacturing decreases (Traxler, 2008). This brings out the question of whether it is possible that the present decline in membership and density challenge the employer association as they do unions. Sullivan (2010) posits that the density bias among the labor scholars has frequently resulted in oversimplification the immediate employment. Taking to account the mainstream industrial relations, employer associations are general viewed as a response to trade unions and to minor extent the role of the state in work affairs (Gallin, 2001). In the contemporary setting it is arguable that the relationship between the two entities remains a complex and oppositional one, in addition to counterbalancing each other, the employer organization also appear to be growing less concerned with directly confronting trade unions and prefer to influence the environment in which the latter operates. References AFEI. 2014. Australian Federation of Employers and Industries: About Us. Available at: http://www.afei.org.au/about Barry, M., & Wilkinson, A. 2011. Reconceptualising employer associations under evolving employment relations countervailing power revisited. Work, Employment & Society, 25(1), 149-162. Behrens, M. and Helfen, M. 2009. Interest Heterogeneity and the Effectiveness of German Employer Associations. Paper presented at the IIRA 15th World Congress, Sydney, August 24-27. Broad, P. 2001. Australian business associations – Their strategies for surviving the 1990s and beyond, Labour & Industry, 11(3): 27-54. Colling, T. 2006. ‘What Space for Unions on the Floor of Rights? Trade Unions and the Enforcement of Statutory Individual Employment Rights’ Industrial Law Journal 14035 (2) Cooper, R., & Ellem, B. 2008. The neoliberal state, trade unions and collective bargaining in Australia. British Journal of Industrial Relations, 46(3), 532-554. Daniel M. S. Trade Union Behavior and the Local Employers Association. 1957. Industrial and Labor Relations Review, Vol. 11, No. 1. 42-55 Gallin, D. 2001. Propositions on trade unions and informal employment in times of globalisation. Antipode, 33(3), 531-549. Howell, C. 2005. Trade Unions and the State. Princeton: Princeton University Press. Plowman, D. H. 1988. Employer associations and industrial reactivity. Labour & Industry: a journal of the social and economic relations of work, 1(2), 287-305. Sullivan, R. 2010. Labour market or labour movement? The union density bias as a barrier to labour renewal, Work, Employment and Society, 42 (1): 145-156 Traxler, F. 2008. Employer organisations. In P. Blyton, N. Bacon, J. Fiorito and E. Harry (eds), The Sage Handbook of Industrial Relations. London: Sage. Read More