Collective Bargaining and Unions - Essay Example

?Running Head: EMPLOYMENT RELATIONS Topic: Employment Relations Lecturer: Presentation: Introduction Muharukuaand Vries (2009 p. 50) define a trade union as “a workers’ organization which represents workers in their dealings with management and owners of a firm.” It also deals with the state in formulating labour policies and negotiating national wages. Its main role is collective bargaining activities which entails negotiations between employer and employee representatives on terms and conditions of work and ensuring protection of workers’ rights. Today, the unions are also involved with legal issues concerning employees. Traditionally, trade unions were very powerful in championing employee rights hence were viewed as adversaries by the management but nowadays the management has realised the need to partner with them. Though collective bargaining is an effective way of ensuring favourable working conditions, the employment context has changed and new ways of handling employee issues have emerged such as the human resource management approach which views workers as assets hence partnering with them in realisation of the organization aims (Wilton, 2011). The question that begs an answer is; which is the most appropriate approach to employment relations in a dynamic and turbulent environment? This requires us to delve into the benefits of having strong unions and the disadvantages as well as the HRM approach to employment relations. Collective bargaining and a strong role for unions have various implications on the various actors in employment relations such as the employees, employers, trade unions and the state. In Britain, trade unions had a lot of power before the conservative government took over power. The players in British employment relations include the Trade Union Congress, European Union, staff associations, state, employee representatives, and employers among others (Armstrong, 2009). According to Ackers and Payne (1998), the government acts as the peacemaker between employer and the union, sets the standards of good employment relations, influences price and wages as well as legislating employee rights and standards. The trade unions in Britain are entrusted with the role of negotiating employment contracts which stipulate terms and conditions of work. They also help to settle disputes by participating in disciplinary and grievance hearings, legal representation for members, ensuring health and safety standards are maintained and ensuring job security by protecting them against unlawful dismissal. Trade unions can effectively bargain for improved wages and benefits for workers but what does this imply for the employer? If it results in higher wages than equilibrium wages in the market, the employer is unable to compete effectively in the highly competitive global market hence may be forced out of business or reduce production (Hyman, 2001). Moreover, increased wages lead to high production costs thus reduced output which may force the employer to cut labour costs by reducing the number of employees. This is a disadvantage to the employees as they lose income. For unions, increased wages means increased returns for them although a reduction in membership means loss of returns. Sometimes collective bargaining does not end up in an agreement hence conflicts arise. A strong union may influence members to go on strike until their demands are met or stay on the job but slow their production (Singh, 2010).This leads to great losses for the employer due to reduced productivity or lost production. For example, British Airways strike in 2010 led to disruption of flights from Heathrow airport hence massive losses due to cancellation of flights and loss of consumer confidence. Trade disputes are therefore inevitable where unions are strong. Collective bargaining determines the relationship between employee and employer through an agreed employment contract (Torrington et al. 2011). This may limit workplace flexibility which is much needed in today’s economic conditions. Despite these shortcomings, strong role of unions is essential in helping the organization to implement new work practices. The unions are vital in ensuring that the management gets support from the members and also explains to workers on new working practices such as technical compensation procedures (Arvinen-Muondo & Perkins, 2010). Unions also negotiate productivity deals with employers so as to increase the level of output. The EU has been on the forefront in encouraging union participation to ensure the social dimension is achieved. Due to globalization, political, social and economic changes the role of trade unions is losing relevance. To adapt to these changes in a timely and flexible manner, organizations have realised the need to improve on employment relations by partnering with employees and sometimes with trade unions. The employment relations have therefore shifted from collective approach where trade unions act as voice for employees to individualist approach where individual employees are given a voice through involvement and participation (Wilkinson et al. 2004). New HRM practices ensure that the employee and employer direct their interests towards the organizational vision and mission thus it is regarded as a unitaristic approach. This is through improved communication, teamwork, compensation practices, training and development among others. According to Hyman and Mason (1995 p. 21), the UK has been in pursuit of a ‘free enterprise’ in order to respond to the increasing competitive environment. Dundon et al (2005) argues that good communication is the foundation of a successful organization. The unitarist approach thus aims at enhancing communication at all levels and in all directions. Employees can air their grievances to management without being reprimanded and can also give views on certain decisions. This ensures commitment from staff to organization goals and highly motivated workforce leading to high performance. Communication may be in form of team briefings and attitude surveys. Furthermore, the organization is able to pass relevant information to staff thereby preventing destructive rumours (Harley et al. 2005). Workers are also made aware of the direction the company is heading and what is expected of them hence reducing conflicts. In Britain, the Company Act of 1985 requires companies to show the steps they have taken to consult with employees on issues that affect them (Cole, 2002). Another HRM practice to enhance employment relations is compensation procedures. Instead of collective bargaining through representatives, Rose (2007) notes that the employer offers better terms and conditions by linking pay to performance. The firm engages in training and development to improve worker skills and develop their careers thus job enrichment and satisfaction leading to high morale, commitment, reduced absenteeism and turnover as well as improved productivity. The firm can engage employees in financial participation by profit sharing and offering them shares. However, feedback on performance is very essential in helping employees to recognize their weak areas and work on improving them (Michael, 2005; Wood & Wall, 2007). In Britain, employee share ownership and profit sharing schemes are guided by a statutory framework and are promoted by the conservative government as a drive to extend spirit of private enterprise. The Workplace Employment Relations Survey (WERS) shows the extent of financial participation thus organizations are also supposed to register their schemes for approval with the taxation authorities (Biagi, 2002 p. 136). Team work is essential in improving working relations. Employees form groups which comprise individuals with different skills thereby creating a learning environment. They exchange ideas and improve on their skills hence are able to compete effectively in job market. As a result, the firm is able to retain high talent and improve performance as well as produce quality products that meet the needs of customers. Blyton and Turnbull (2004) emphasize the need for management to delegate responsibilities to the team or individuals and give them freedom to execute them thus enhancing commitment. Management should also provide support in terms of resources and time and reward their efforts. This makes workers feel that their work is valued and know how it fits in the organization thus building mutual trust. Gennard and Judge (2005) acknowledge the fact that the unitarist approach to employment relations cultivates a sense of trust, mutuality and commitment from employees. The employees are aware of what is required of them and are also aware of their rights and obligations hence successful employment relations. The employees or employer do not see the need for engaging unions or representatives as conflicts are minimal and can be solved efficiently through HRM practices. Conclusion Collective bargaining and a strong role for unions is both beneficial and disadvantageous to the parties involved especially in today’s economic conditions that require flexibility and adaptability to cope. It is useful in ensuring employees are not exploited in the workplace, bargaining for better terms and conditions, supporting new management practices, advising the state on labour issues so as to formulate better standards and regulations, representing workers in legal issues and ensuring job security among others. However, increased wages can lead to low output for employers and loss of employment for workers although it would mean high returns for the union. Trade disputes are prevalent due to failed negotiations and strikes can lead to high losses for both employee and employer. A partnership relationship between the workforce and management that enhances understanding, mutuality and commitment is crucial. The unitarist approach ensures this is attained by improving communication, enhancing teamwork, giving better terms and conditions, and delegating responsibilities. However, it may disadvantageous in organizations that do not value employees or aim at profit maximization at expense of workers. References Armstrong, M (2009) Armstrong’s Handbook of Human Resource Management Practice. 11ed. UK: Kogan Page. Ackers, P., Payne, J. (1998) British Trade Unions and Social Partnership: Rhetoric, Reality and Strategy, International Journal of Human Resource Management, 9 (3): 529-549. Arvinen-Muondo, R., Perkins, S (2010). A Decade of Change in Employee Voice. London: CIPD Biagi, M. (2002) Quality of Workers and Employee Involvement in Europe. Hague: Kluwar Law. Blyton, P., Turnbull, P (2004). The Dynamics of Employee Relations. 3ed. Basingstoke: Palgrave Macmillan. Cole, G (2002) Personnel and Human Resource Management. 5ed. London: Thomson. 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