Main Processes of International Employment Relations - Essay Example

International & Comparative Employment Relations Contents Contents 2 Introduction 3 Discussion 4 International & Comparative Employment Relations 4 Globalisation as a barrier to the regulation of labour standards 5 Dunlop’s system theory 7 Main processes of international employment relations 8 Examples of MNCs to analyse the regulations of labour standards 9 Conclusion 12 References 14 Introduction Employment relations include the study of the different aspects of employees at work. Also, the employment relations are concerned with the existing relationships between employer and employee groups and the interactions and communications between these two parties. The study of employment relations also include the identification and evaluation of the functions and effectiveness of the representative bodies of the employers and employees like the trade unions, employer associations and also the regulatory authorities who significantly influence the relationships between employers and employees. The international employment relations include an analysis of the global labour markets. On the other hand, the comparative employment relations include the comparisons between the employment relations and labour standards maintained in two different nations. Comparative employment relations are especially profound when the comparisons are made between the operations of multinational enterprises in developing countries and those in already developed countries. International employment relations consider the transnational as well as the foreign employment relation systems. The transnational employment relations encompass the phenomena and institutions that cross national borders, the international labour movements, the functioning of the state level regulatory bodies like the International Labour Organization (ILO) and the different Multinational Corporations (MNCs). The comparative employment relations consider the evaluation of the foreign employment relation standards i.e. the employment relations standards and processes in different countries. It is a systematic method of analysing the employment relations in two or more nations. Discussion International & Comparative Employment Relations The international industrial and comparative employment relations deal with the different aspects of labour management and employment relations which also include the dimension of human resource management. Although employment relationships in the international perspective focuses on the regulatory aspects of work, yet other dimensions like the wider social and economic influences and the relations and communications between the organizations, states, employers and workers are also necessary to develop a deeper understanding of the comparative employment relationships in the international platform (Arrowsmith and Marginson, 2006). On the other hand, international employment relations encompass the exploration of different international labour market institutions and the employment phenomena that exist across national boundaries. These may include the behaviour and regulatory mechanisms of the intergovernmental institutions and organizations, the roles of labour markets, the control and behaviour of the unions and multinational enterprises that operate across different locations in the globe. However, both international employment relations and comparative employment relations merge at a point wherein the employment conditions and relations are studied on the basis of the traverse boundaries existing between different nations. There are five main parties involved in international employment relations. These include the employers, employees, state and government agencies, professional and union associations and the international labour market regulatory bodies and policymakers. The main processes involved in the international employment relations and labour markets include collective bargaining between the employers or employer associations and the employees or trade unions, participation of the employees at the workplace, industrial disputes, and minimization of conflicts of interests between the employers and the employees and the different mechanisms of dispute and conflict resolution in the labour markets. the main outcomes of this system includes the collective agreement formed between the employers or employer associations and the employees and trade unions, the agreements between the employer and the employee groups regarding the resolutions of any issues faced by the workers in their respective work environment or the decisions taken by the conciliation committees or tribunals to reach the resolution of any reported dispute in the workplace (Mathieson and Pendleton, 2006). The comparative and international employment relations are much debated topics in which the issue of convergence of the national patterns involved in the employment relations is a majorly focused on area. The employment relations in different countries indicate at the convergence as well as divergence of the international employment relations and systems. The comparative employment relations study identifies that in some countries the patterns of employment relations and labour standards are becoming similar or convergent while in some other countries they are becoming different or divergent. Also, more complex patterns of divergence and convergence are expected to take place in this system in the future years. Globalisation as a barrier to the regulation of labour standards Globalization has acted as an important influence of the international and comparative labour market and employment situations and relations. The advent of globalization has created significant changes in the economic, social and perspectives in countries across the world. As such, it has also influenced the working lives of people across the globe. Some critics are of the opinion that globalization has brought about positive benefits for the international trade practices and labour markets, On the other hand, some other scholars and critics are of the opinion that globalization acts as a barrier to the regulations implemented in the international labour markets and employment relations. Globalization can be defined as a factor that has led to fundamental changes in the underpinning of the international political, social and cultural orders. The concept also refers to the shifts in the international economy which have led to changes in the financial and business transactions, flows of Foreign direct investments (FDI) and Foreign Institutional investments (FII) , international trading of products and services etc. This has subsequently led to the increase in the level of interconnectedness and communications in the economic activities conducted on the international domain. Globalisation creates pressure in the way the multinational organizations and regulatory institutions operate and therefore, has brought about contemporary waves into the international employment relation practices. The flow of human resources, ideas, information, products and services and technologies across international borders has brought about significant changes in the international employment practices. For example, the regulatory mechanisms that are applicable in one nation have started to become obsolete on a global platform because the social, political and economic situations in different countries are different. The company level practices of employment relation maintenance like the introduction and adoption of new technologies, formulation of new remuneration and compensation systems and the shifting patterns and practices of training, skills acquisition and retention, employment security, staffing, adjustment of human resources according to the structural changes and needs of the company are examples of how globalization has caused the introduction of new patterns and techniques on the comparative as well as international employment relations. Globalization has fuelled the drastic changes in the perspective of the international economy. Since globalization leads to increasing interconnectedness a communication between different entities in the international economy, therefore, the need for standard labour practices and regulations are felt more deeply in the current employment relations. Globalization is associated with the development in cross border trade activities, Foreign Direct Investments (FDI), Foreign Institutional Investments (FII), international financial and business transactions etc. It has been argued by many economists that globalization has led to diverse economic pressures on the parties functioning in the international labour markets and thus directly and indirectly impacts the international employment standards and practices. Dunlop’s system theory The Dunlop’s conceptual framework for industrial relations system devised by Dunlop in the year 1958 is one of the most famous theories used for describing the industrial and employment relations. According to this framework, an industrial system can be described through the use do three sets of parties and three sets of actors which are the representative organizations for the three actors. The three main actors in the industrial relation system are the workers, employers and the state. The internal relations between these three parties are decided on the basis of three main environmental contexts which are market forces, technology and the relative status and power of the individual parties (Lewis, Thornhill and Saunders, 2003). The network of rules is a concept of network that governs the workplace functions and structures as the main production of the international employment relations systems. In 1967, Walker developed an extended theory of international employment relations based on Dunlop’s theory of industrial relations systems. This theory established that the descriptive approaches to the international relations processes and systems should be transcended upon and focuses on the identification of the roles, interactions and importance of the different components that impact and shapes the international and comparative employment relations in the context of multiple nations (Dundon and Rollinson, 2011). Main processes of international employment relations There are certain inbuilt functions and process in the domain of international as well as comparative employment relations. These are discussed so as to create a suitable background for understanding how various countries and multinational enterprises function to develop suitable labour standards and employment relations (Bouquet and Birkinshaw, 2008). International employment relations or industrial relations, as it is popularly known have three main faces. These are ethicality, science building and problem solving. Maintaining ethicality in all the business processes and employment activities has become more significant with the advent of globalization and the establishment of strict regulatory regimes by the legal authorities to control and review the international labour markets. Minimizing the conflicts of interest among the employees and the employers is one major objective of the industrial relation study. Collective bargaining is identified to be one of the most significant concepts in the area of international employment relations which is commonly used by the employees as a mode of reducing the conflicts of interest with the employers (Smith, McSweeney and Fitzgerals, 2008). The fundamental differences between the divisions of interests and objectives of labour and capital employment form the basis for the regulations in the international labour markets. Collective bargaining is a negotiating process conducted between the groups of employees and the employers. This process is usually aimed at the fulfilment of the demands of the worker groups related to fair working conditions, wages and equal treatment and opportunity in employment. The process of collective bargaining follows the right of association according to the Fair labour Standards Act and as such involves a trade union which acts as the representative of the interests of the employee groups. Examples of MNCs to analyse the regulations of labour standards Globalization has provided a volatile combination of social disruption and economic opportunities for both the employees and the employers in the global platform. With the changes in the way businesses are carried out across the world, the experiences and requirements of work and employment opportunities have been redefined (Bamber, Lansbury and Wailes, 2011). Also, these changes have significantly challenged the national and institutional regulatory institutions and policy makers which govern the labour markets, As such; all the companies which aim to operate on a multinational platform have taken up suitable approaches to ensure the conformation and implementation of sustainable labour practices (Harley, Hyman and Thompson, 2005). Most of the big multinational companies are focusing on addressing three main concerns with respect to employment relations in the global economic perspective, these include the creation of safe, healthy and decent work environment and culture, fair and justified compensation policies and providing the rights of association in the employment place (Rebecca, 2008). Some examples of the multinational enterprises are being discussed in the following section to develop a better understanding of the common practices of multinational companies to ensure proper labour standards and mutually beneficial employment relations. Nike is one of the most well-known global brands which conduct its operations in both developed and developing economies across the world (Kochan, Romis and Qin, 2007). Nike has been selected of this study because the company is a truly global enterprise which has more than 830 suppliers from across 51 nations. The company has emerged as a pioneer in the development of compliance programs, especially after the sever criticisms faced by the business because of the sweatshop practices in its factories and manufacturing units set up in the developing countries like China, Bangladesh, Sri Lanka and Mexico (Gennard and Judge, 2005). Nike has enforced effective labour standards in their supply chains as well as the employment relations. The company aims to develop a healthy work environment in more than 80 workshops located in the developed and developing countries. The company has allowed the right to association for all levels of workers and ensures that safe, healthy and fair working conditions and treatment are provided to all the employees (Almond and Ferner, 2009). Another case selected for evaluating the labour standards of the multinational enterprises in the era of globalization is the Foxconn Technology Group. The Foxconn Technology Group is one of the main suppliers of Apple Inc. and the third largest information technology products manufacturing company in the globe when measured by revenue generation. The company has suffered major criticisms in the recent years due to the union democracy activities and the stringent 60-70 hours of work system in its factories. The company has been struggling to adhere to the labour laws in the China mainland (Block, 2010). The Foxconn Technology Group is based in Washington. The company has set up its workshops and factories in underdeveloped countries like China which employ more than 17000 labour group of workers (Standing, 2009). The Fair Labour Association assesses the working conditions of the workers in three factories of Foxconn Technology Group in Chengdu and Shenzhen in the first quarter of 2012. The assessment revealed the poor treatment of the labours in these factories and the lack of healthy working conditions for the workers as well. After the assessment, Foxconn was highly criticised by the international labour market regulators and assessors. Since it was found out that the company was exploiting cheap labour in the deprived locations, therefore, major loss of reputation occurred for Foxconn Technology Group after this assessment. The repercussions of not complying with the international labour standards and practices were so huge that the main client of Foxconn Technology Group - Apple Inc. refused to conduct further business with Foxconn if it did not take immediate remedial actions for improving the existing working conditions and treatment of the workers in the factories (Martinez, 2013). This indicated the degree of importance of conforming to the international labour laws and standards in order to ensure sustainability of the business. Following this, the management of Foxconn started giving much importance to complying with the international labour standards and requirements and also invested sufficiently in the ways of improving the international employment relationships in all the factories of the company. Recently, the chief executive of the Fair Labour Association (FLA) has mentioned in a report that Foxconn Technology group has reduced the working hours to 40 hours per week from 60-70 hours per week and has also introduced standard remuneration systems and worker support systems to ensure better compliance with the existing labour standards. These initiatives taken up by the company are likely to result in the improvement of the employment relations and practices of the company to a significant extent and this create a sustainable and dependable image of the company as an international employer (Rose, 2008). All companies which operate in the international domain have been forced by the strict legal requirements to set up standards and policies that effectively consider the interests and benefits of the employee groups. Globally successful businesses like MacDonald Corporation have set up benchmarks and standards in their global operations in order to comply with the international labour market regulations and standards (Fernie and Metcalf, 2005). These standards include the authorization of legal workers, provision of fair and just working conditions, suitable payments made to all races of workers, prevention of indiscrimination on the basis of race, gender or background and the provision of accommodation for the disabled employees in the factories and other business units. The Fair Labour Standards Act is a milestone law in the arena of international employment relations and labour markets (Niforou, 2012). This Act was established in the year 1938. Since, McDonalds Corporation was established in 1955, therefore, it was necessary for the company to set up its labour standards according to the requirements specified in this law. Since its inception, McDonalds Corporation has been paying much attention towards the benefit and fair treatment of all its employees. The company provides fair pay to the workers as per the enforcement of the minimum wage practices and the overtime pay systems for workers included in the Fair Labour Standards Act (1938). Though this kind of payment system did not allow the company to retain more income into the business but the system was found to be highly beneficial for the reputation and goodwill of McDonalds Corporation in the long run (Dundon, 2005). Apart from this law, McDonalds Corporation has also conducted its business in compliance with several other Acts like the Equal Pay Act of 1963, The Occupational safety and Health Act of 1970, The Immigration Reform and Control Act of 1986, The Family and Medical Leave Act of 1996 and The Americans with Disabilities Act of 1990 (Heery, 2003). All of these laws were formed as the avenues to ensure healthy international and comparative employment relations and McDonalds Corporation successfully complied with all the laws through the years of its existence. This has helped the company to establish itself as a globally renowned, sustainable and appreciated company in the international fast food market (Royle and Towers, 2011). Conclusion It can be concluded that globalization had and is continuing to have profound impacts on the way in which the labour markets and employment relations or industrial relations are regulated and controlled. The analysis of the international and comparative employment systems help to identify that the compliance level of different nations and different organizations are significantly developed. While some multinational enterprises like MacDonald Corporation have successfully adhered to the continuously evolving regulatory requirements of the labour markets, some other companies like Nike and Foxconn technology Group have faced a number of hurdles in the way of establishing impressive and fair work practices. Comparative employment relations indicate that differences in the employment relations standards and labour market systems in some countries are likely to persist or even increase in the future years and are largely fuelled by the increasing influence of globalization. But in overall, a convergence of many patterns of the system is expected in the near future. References Almond, P. & Ferner, A. 2009. American Multinational in Europe: Managing Employment Relations across National Borders. Oxford: OUP. Arrowsmith, J. & Marginson, P. 2006. The European cross-border dimension to collective bargaining in multinational companies. European Journal of Industrial Relations. 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