British industrial relations - Essay Example

Running Head: BRITISH INDUSTRIAL RELATIONS British Industrial Relations s British Industrial Relations Introduction The aim of this essay will be to access and explain the management of British employment relationship and then derive lessons concerning the management of the employment relationship from the study of the operation, structure and effectiveness of systems of the employment relations in Britain. An argument will be put forward that what the future of the British Industrial Relations system is. This essay will then give a description of the recent management of the British Industrial Relations system in Britain and discuss the future of British Industrial Relations System. Analysis According to the Answers.com (2005), Britain is a country of Western Europe comprising England, Scotland, Wales, and Northern Ireland. Until July 2003, the British population is 60,094,648 (www.answers.com/topic/united-kingdom). In the 19th century Britain was at the peak of its power it ruled over a huge territory. In fact the whole world. It is the leading industrial and naval power of the 19th century; it led the way in developing parliamentary democracy and in advance literature as well as science. The British industrial relations system has a long history and has gone through much change in recent years. Industrial relations are also known as employee relations. Employee relation is are partly concerned with groups of employees who are represented by trade unions (Ed 2004 p 4). There are three phases in the evolution of employee relations since the end of the World War II, the third one being the partnership approach. Until 1979 (date of the election of the Conservative Party), work relations were based on collective bargaining and collective agreement aiming to determine and regulate, in varying degrees, the terms on which individuals will be employed (Flanders 1968 p35), with a strong voluntarism encouraged massively and informally. The trade unions (basically, it is an association of wage earners, totally independent of employer's pressure, who struggle to improve work conditions) had a lot of power and everything was negotiated through deals. A Trade Union, through collective bargaining can force employers to deal with labour as a collective identity, rather than isolated individuals and so, secure better the terms and condition of employment. Nevertheless, in 1979when the conservative party won the election, everything changed. The new government used a lot measures to restrict the role of trade unions. In addition, it introduced an enterprise culture in which individuals and organisations, rather than government, were to be held responsible for economic performance. Thus, as well as rejecting the maintenance of full employment as a major policy objective, they in effect abandoned the commitment of their predecessors to voluntary collective bargaining as the most effective method of determining pay and conditions. Then, there was a total break with the old work patterns but an explanation of this will be the economical context. In fact, after the war, there was a period of reconstruction that engendered a lot of work; manufacturing was the backbone of the economy, it was a period of full employment. After that, there was a wave of privatisation, many companies became multinationals, and there was an internationalisation of business. Because Britain is the candle of industrialisation, the British employment relations system has a long history. It is extremely important as it's the FIRST system in the modern sense and thus other ER systems such as Australia's, has been 'modelled' on it (Marchington et al. 2004 p36). For example, many percent trade unions can trace their roots back to this mid-19th century or earlier in Britain. The legislations and rules of employment relations in many countries are also modelled on the Britain's. As a result, studying the British employment relation system can help to know the history of the ER system and then can deeply understand the principle of the ER systems in other countries. Since the early days of the Industrial Revolution, from 1760-1830 progress, innovation and growth in every field of human endeavour have served to transform industry, economics and society. The discovery of new and better ways of combining land, labour and capital enables the production of goods, determining technological progress. Whether progress has been embodied or disembodied it has facilitated economic development from agricultural to industrial dominance (Heathfield & Russell 1992 p25). In the last ten years nevertheless the third or tertiary stage of productivity, that is the service sector, has become the focus of economic growth in Britain, outstripping the manufacturing sector. New sort of work has replaced old, new regions expanding, often at the expense of older industrial regions. 'Growth implies change, a painful process for some' (Heathfield & Russell 1992, p19), the pace of change increasing beyond the capabilities of adjustment. This turn to Informationalism at the expense of industrialism, leading many to believe Britain has experienced a second industrial revolution. According to Answer.com (2005), over the past two decades the government has greatly reduced public ownership and contained the growth of social welfare programs. Agriculture is intensive, highly mechanized, and efficient by European standards, producing about 60% of food needs with only 1% of the labour force (www.countryfacts.com/unitedkingdom/economy). The British voluntarist system The British system of industrial relations has often been considered as being as voluntarist, by which is generally meant the abstaining of the state from direct interference in the managing industrial relations. This rule of abstention can be clearly understood in the traditionally small volume of law influencing industrial relations; without a doubt, voluntarism has even been considered as legal abstentionism.Along with legal abstention, voluntarism also depends on the theory of the primacy of voluntary action within the realm of industrial relations. Voluntarism has by no means been constant and, especially in the 1980s there are excellent reasons for finding out if it is still a suitable part of the British system of industrial relations. However till the 1970s it was protected via unions, employers as well as the government, not the smallest amount on the basis that agreements reached by means of voluntary means were expected to be more constant and long-lasting than those forced via state intervention. In the past, these trade unions played a vital role in creating the British voluntarist system of industrial relations (Rollinson 1993 p 23). The Confederation of British Industry (CBI) is the peak employer body. They do not take part in collective bargaining however they have played an important role in shaping the 'voluntarist system' of TU. Change in British Industrial System in the Last Few Decades Trade union is a union of workers made to improve their economic as well as social conditions by means the procedure of collective bargaining with their boss. Traditionally, TU have 'stood alone' (having no employer or State involvement). Also, it has no direct role in collective bargaining (CB). In Britain, TU are predominately craft based in which the membership is restrictive based upon the person's skills. The role of TU is to lobby government and European Union (EU), but this role was reduced dramatically in 1979-97 when Conservative Party was in power; regulate inter-union relations; and has an effect on political agenda via participating in a lot of tripartite bodies or agencies. TU movement has always been a 'tradition of voluntarism'. Only in certain employment sectors - is TU membership compulsory (in the form of legislation making it so).The TUs are instrumental in establishing the Labour Party in 1906 to ensure TU kept their 'rights'. However since mid 1980, the Party has distanced itself from the TU and policy making power as been reduced (Marchington 2004 p 39). From 1980 to 1990, the new legislation limited the ability of TU to organise lawful industrial action. It also narrowed TU's 'immunity' from legal action brought about by employers and/or TU members eg. TU could now be sued. This ensured TU were responsive to the wishes of its members. Moreover, new government outlawed secondary industrial action (eg. organisation can't go out on strike in support of another industry) and made TU now liable for unauthorised / unofficial industrial action. Thus, TU and Collective Bargaining had reduced. The Role of the State has been subjected to change, however has always been a crucial role in Britain's ER weather directly or indirectly. The government is responsible for the undertaking legal reforms of industrial relations; conducting the economic policies; ensuring the equity and discrimination at work; fixing legally enforceable minimum pay and conditions in industries; conciliating and arbitrating dispute. Also, the state is an important employer. In Britain, the intervention of the State and of IR laws is small except during and after when 'compulsory arbitration process' was introduced that is the World War II (Marchington 2004 p 45). From the 19th century, governments have usually ignored legislating for fundamental collective rights (Brown & Oxenbridge 2004 p 143). They have chosen to let employers and unions to make their own schedule, and to make sure that their disagreements were not brought to the courts. A few times governments have motivated trade unions and supported specific bargaining structures and practices. At others they have dejected both unions as well as bargaining. The law has been utilized by both to assist and to stop trade union organisation. However the law has never needed and imposed any specific bargaining structure. CB covered 70% of workforce in 1970, but it is only 40% in 2000. As a result, CB has diminished and it now only affects a minority of employees. TU involvement in the regulations of the workplace has also been marginalised. Today, managers set the terms and conditions of employment matters directly rather than bargaining with unions. Moreover, government has distanced itself from settlement of industry disputes although their influence is still important. Although 3rd party involvement in disputes has not been a feature of 'peacetime' (only during the Wars), conciliation and arbitration has been regarded as a 'supplement' to voluntary collective bargaining. It is also noted that arbitration is not compulsory (like in Aust), nor is it compulsory legally (Marchington 2004 p 52). When we study the alteration of Britain's employment relations system the changing way of work cannot be ignored. The effect of technological innovation, work reformation and job redesign are all assisting to redesign shop floor approach amongst executive, unions as well as workers. The fundamental shifts in labour markets with the self-effacing however essential relative development in the amount of those who are given part-time jobs, temporary as well as contract work is also assisting determining the development of British employment relations by new methods. (Marchington 2004 p60). The Future of Work Research Programme point out that a really new type of employment relations across a vast array of Private Sector businesses based on doctrine of industrial partnership comes into view. (Taylor 1998 p60). The use of this term of partnership is a relatively recent political phenomenon. Some people affirm that it is just a term used by the Government to attract popular support because nobody can be against 'Partnership' (Knell 1999 p30). Some others, more optimistic, see in this term a new pluralist approach to industrial relations. This concept comes from the idea that enterprises should recognise the interests of each stakeholder, namely employees, employers and their representatives, in order to satisfy each party. The Involvement and Participation Association (IPA) identifies six key principles: a joint commitment to the accomplishment of enterprise, as well as encouragement for flexibility and the removal of adversarial relations; an acknowledgment that interests of the partners might justifiably differ; job security, as well as ways to develop the employability of employees and restrict the utilization of compulsory redundancy; pay attention to the value of working life; an obligation to transparency, including a genuine sharing of hard, undisguised information, an openness to discuss strategies for the future, authentic session and awareness to pay attention to the business case for different strategies; adding worth - the trademark of an effectual partnership is that it gets into cause of commitment as well as / or resources that were not used in prior agreement (Knell 1999 p35). For the New Labour government, 'partnership' at work becomes an important objective. The partnership is between individual employer and individual employee and their representatives but the latter partner is weak in the new work relation. The partnership approach is more focused on individual relationships than a collective one, like in the past. Indeed, New Labour insists on individual choice. For them, it is not an obligation to integrate a working union. It emphasises that individuals are the best judges of their own individual interests. That is to say that the individual has the choice of whether or not to join a trade union and whether or not to take part in the coverage by collective agreement. It might mean the government is not really in favour of the trade unions. In fact, some people think that a trade union would be an enemy of the partnership approach in the sense that trade unions defend the workers' interests and they always have a confrontational relationship with the employers. Then, how can a partnership be formed if one of the partners does not make an effort to find a common agreement In this way, the trade unions' role has to be redefined. They have to play a co-operative role with employers in order to find some common interests which satisfy both the employees and the employers. The psychological contract is the basis of a partnership approach. It is the link between employers and employees. It establishes the expectations, aspirations and understandings which they have of each other (Herriot 1998 p10). It is noted that the psychological contract has changed since the last few years because of the changes of the work environment (change in workforce structure, re-engineering, downsizing...). The previous psychological contract's was designed on security and predictability, the present one is situational and short term , it also assumes that every party is a great deal less dependent on the other for continuous existence and growth. The psychological contract has to be strong and truthful to allow a partnership relation. New Labour insists on the voluntary aspect of the new work relation. The partnership should be introduced through cultural changes which will lead to 'more positive relationships amongst employers and employees than the law might ever attain. That is to say that the law itself can not resolve the problem of employee relations, some cultural changes have to emerge first. Employers and employees have to make some effort to improve the work relationship. With the partnership approach, employees benefit from a family atmosphere with friendly policies. For example, they benefit from new working arrangements which allow a greater flexibility. There is a harmonisation of working conditions, policies and procedures for all employees (training...). The partnership approach introduces a new pay structure: pay is monthly trough credit transfer, and the traditional annual pay is replaced by an objective formula. Moreover, a reduction of the working week for manual and craft employees can be observed. However, the partnership approach introduces the notion of the individual worker. In this way, trade unions are less useful in the employer/employee relationship and lose their power. Then, the employee is in a weaker position than his/her employer (a caution has to be noticed because, trade unions have a right to accompany their members during the disciplinary or grievance interview) (Knell 1999 p40). For the employers, firstly, the partnership gives a good reputation to the enterprise which applies it. Moreover, it allows a greater stability of employment because employer talks to employee and establishes some rights and some obligations that each party has to respect (limit the turnover, strikes and so on). The relationship between both is more respectful and equal. Furthermore, the partnership allows a greater openness over the enterprise. Through it, the employers know what is wrong with the employees and try to find how they can fix it. The work atmosphere is more friendly and truthful. The partnership approach is, as well, a need for a change in approach to the trade unions. To date, the relation between employers and trade unions is based on confrontation. This new approach gives a secondary role to the trade unions and privileges the individual employer/employee relations, which is easier to manage. Furthermore, employers attempt to improve work conditions, in return they profit from a greater activity because workers feel good in the company. In addition they can have greater performance appraisal and a new understanding of performance management through control and feed back. However, this approach demands a lot of administration and is quite constraining for a company. To fire an employee who has a poor performance for example, the employer has to give a first warning and propose a disciplinary interview in order to detect what is wrong with this employee. If nothing has changed, the employee can receive another warning, the last one, before the dismissal (or other sanctions). Sometimes, procedures take too much time and engender an economical loss. Moreover, the enterprise can lose some power in relation to its employees. Previously, employers had the economic power over employees. Now, this power is more shared between both because their relationship is more interdependent (Knell 1999 p43). For the trade unions, there is a new stake in their role as representatives. They have to prove the value of the employers to the employees and the value of the employees to the employers. Furthermore, the trade unions may attain some profit from a partnership fund so that the employers and employee legislative body work jointly to support inventive projects to develop the partnership approach in the workplace (Knell 1999 p35). However, the partnership approach has more drawbacks than return for the trade unions. Through it, trade unions lose some power. Firstly, their recognition is limited. According to the government, the trade union has a secondary role in the employer/employee relationship. Then, their role has to be redefined in a more consultative sense; it has to focus on the information, the communication, the representation and the partnership. Their contribution to the partnership is potentially useful but far from being essential. Moreover, according to the IPA, the partnership needs a different channel than the union one, because this model is not adequate anymore. In fact, the union presence is weak or non-existent in the majority of companies in Britain, therefore, the partnership needs a new representative structure. The employment relation through the partnership approach becomes fairer. For example, union co-operation in more flexible work patterns, team working, the introduction of annualised hours and the harmonisation of terms and conditions of employment are all greater assets of the partnership approach. Concerning job security, the partnership approach remains limited: the job security guarantees have been identified as the hallmark of partnership approach by many of its advocates, although, they have no featured in all such agreements. In a lot of cases, they sum up to rather restricted management commitments to keep away from the utilization of compulsory redundancy as a way of labour shedding- a fairly familiar practice in organisations that can attract sufficient candidates for early retirement and voluntary redundancy with enhanced severance payments. Furthermore in a number of partnership agreement, trade unions and employees are to assist with measures and which results in easy avoidance of compulsory redundancy including the acceptance of the company's use of subcontracted, temporary or short-term contract staff. (Taibly & Winchester cited in Batch & Sission 2000). Moreover, the fundamental need for a successful approach requires some cultural changes; we have to break with the old practice (industrial/adversarial ones) because we cannot access a new form of management without this (Knell 1999 p45). Furthermore, the partnership approach appeared in a particular political context. In fact, it was the end of the Conservative government (characterised by a policy of deregulation) and the beginning of the Labour party which developed the important idea of commitment to the partnership in the workplace. But, its aim has to be analysed very carefully because we can notice that the government refused to take part in some social policy proposals developed by the European commission. This reaction is contrary to the apparent willingness of the government to introduce fairness in work and at work (Knell 1999 p44). However, some surveys show that employees feel better with the partnership agreement. We can notice that job satisfaction level is greater than before (Bach & Sisson 2000 p10). Factors That Caused the Change Employment relations in Britain was influenced a lot via the implementation of a broad range of modifications in the employment laws. These are offered both a minimum structure of positive rights in favour of trade union recognition along with representation as well as comprehensive individual employee rights which can be implemented all workplaces and not only those where trade unions are acknowledged as self-governing and independent organisations via employers. This recent approach is being considerably fashioned by means of the incremental implementation of European Union social regulation inside united kingdom as the Labour government put his signatures on the social chapter of the European Union's 1991 Maastricht treaty whilst approaching the office in May 1997 (Taylor 1998). Conclusion Britain is an important industrial country with long history ER system. The Britain ER system is the model of many other countries. But in recent year, the rapid changed economy in the world leads uncertainty of Britain's ER system. It is noted that the partnership approach is introduced in Britain's ER system and will develop in future. If the partnership approach succeeds in satisfying the stakeholders, it needs to be improved again. Britain needs to work on other more social law proposals and take part in the European ones. However, the employment relations are governed by the variation of the market as well; hence, it is very difficult to satisfy everybody. But, the important thing is to try to do the best. Moreover, there will always be some disagreements and unfairness in work and at work; we have to be patient because it takes time to change the mind of each person. References Bach, S & Sission, K (2000), Personnel management: a comprehensive guide of theory and practice, 3rd edn, Blackwell publishers, Sydney.p10 Brown, W & Oxenbridge, S (2004), The development of co-operative employer/trade union relationships in Britain, Industrielle Beziehungen, vol. 11, iss. ½ pp.143-159. Ed Rose (2004), Employment Relations, Financial Times/ Prentice Hall; 2 edition p 4 Flanders A (1968), Collective bargaining: a theoretical analysis, British journal of industrial relations, vol 6, iss 3, and pp 35-41. Heathfield, D & Russell, M (1992), Modern economics, Harvester Wheatsheaf, New York .p25 Herriot, P (1998), The role of the HRM function building a new proposition for staff, Financial time, Pitman.p10 Knell, J (1999), The partnership at work: Employment relations research series 7, Department of Trade and Industry, London. pp. 30-45 Marchington, M, Goodman, J & Berridge, J (2004), 'Employment relationship in Britain' in GJ Bamber, RD Lansbury & N Wailes (eds), International and comparative employment relations: globalisation and the developed market economics, 4th edn, Allen & Unwin, Crown Nest, pp. 36-66. Rollinson, D (1993), Understanding employee relations: a behavioural approach, Addison-Wesley, Boston p 23 Taylor, R (1998), Future of Work Commentary Series: The Future of Employment Relations, ESRC p60 www.answers.com/topic/united-kingdom retrieved on 19 June 2008 Read More