People Resourcing and Trade Unions - Essay Example

People Resourcing: Case Study - Vertex Task Explain the process of trade union recognition and assess the advantages and disadvantages for an employer in recognising a trade union? What factors influenced the decision by Vertex to firstly derecognise, and then subsequently recognise the trade union, UNISON? (Indicative word limit: 1250 words). Trade union is an organisation which is formed when employees of a company join hands in order to safeguard their interests. Unions are supposed to protect the interests of workers against harassment, undue exploitation or discrimination. With the stated objective of ‘protecting the rights of workers’, unions negotiate with the management of the company and other regulating bodies to extract the best possible solution for the problems arising from time to time. But the union will be able to negotiate the solution only if it is recognised by the management and the regulatory bodies for the purpose. The first step towards recognition is to be acceptable amongst the workers. To seek recognition, the union has to be acceptable amongst the employees as well. This implies that the union will have to enrol good number of employees as its members. In general, the minimum number of employees to be enrolled by any union for recognition, is defined in the rulebook. It also needs to be emphasised that enrolment or affiliation of a member with union has to be purely voluntary and without any coercion. The recognition itself is a multistage process comprising of the following steps (OPSI, 2004); Step-1: After ensuring support of the requisite minimum number of workers, the union writes to the employer/ management requesting recognition. For the request to be valid there must be at least 21 employees under the banner of the union. The management can grant the recognition on the basis of the request or it may wish to verify the claim or further negotiate it with the employees and the union. At times, the help of Advisory, Conciliation and Arbitration Service (ACAS) is also sought in case of some disagreements. Step-2: In case of persistence of some difference, the matter can be referred to the Central Arbitration Committee (CAC) by the union (s). The CAC is supposed to decide on the matter within a fixed time period by taking into account the merits of the case and the percentage of employees being represented by the union. Representation of at least 10 percent of the total workforce is once such criterion which helps in deciding in favour of the union. Step-3: After the request of union has been accepted, a bargaining unit is formed by the mutual agreement of both the parties or with the intervention of CAC. Step-4: Once the bargaining unit is formed the union is granted recognition either directly or by carrying out a referendum amongst the workers to ascertain the validity of the claims being made by the union. Once the recognition has been granted to the union, the management is supposed to consult with the union, in matters of concern for the employees. Advantages of Granting Recognition: Depending upon the mutual cooperation between the union and management, it proves advantageous not only for the workers, but for the management as well. Some of the advantages of recognising the union are; The management has to deal with a single representative body instead of negotiating with a number of workers. Workers feel empowered and motivated, which in turn helps in company in meeting the deadlines and targets. It gradually translates into stable employee relations framework. The company is looked upon as worker friendly in the industry, which in turn helps in gaining favourable media coverage and hence a better brand equity. Management can gain regular feedback for improvement in the functioning and operation of the company i.e. problems are raised before ‘molehills become mountains’. An atmosphere of trust and commitment gains momentum within the company. A survey conducted by CIPD (2008) indicates that nearly two-third of unionised employees were of the view that the relationship between management and workers varied from positive to very positive. Disadvantages of Recognising a Union: Well, at times, companies come across many problems because of adamant attitude of unions/ workers. If the cooperative working environment is vitiated with discord, it affects the smooth functioning of the company. Some disadvantages could be; It becomes obligatory for the company to indulge in periodic discussions with the union/s, which at times results in slower decision making process. In case of stiff competition from market, the management is not able to effect cuts in the salaries and compensation of the workers, for fear of retribution from the union, which in turn results in losses. At times the workers become complacent because of the job security provided under the union umbrella, which results in non-productive or less productive working environment. In fact such attitude often results in opposition to change. The management has to devote considerable amount of resources and energy towards managing the union activities At times, some union leaders also start extracting favours from the management There are instances when the management in some companies start considering the unions a burden and roadblock for faster growth of the company. Multi-employer and collective bargaining agreements suffered in view of some aggressive policies being pursued by the management (Schmidt and Dworschak, 2006). In this case also, when Vertex was preparing to win newer contracts, it decided to have a non-union model, where the company would deal with individual employees on case by case basis. Until then UNISON was representing the employees and it was thought by the HR department at Vertex that the collective bargaining mechanism would result in resistance to change, if the company enters into strategic alliances with newer partners. Therefore the company derecognised UNISON. But subsequent events proved that the stand adopted by Vertex was not in line with the prevailing trends in the industry. While on the one hand the employees started feeling insecure, the union leaders also started lobbying against the company’s approach on different platforms. In fact when Vertex adopted this policy, employees of Norweb agreed to give up their right to collective bargaining, in lieu of lucrative personal contracts. But, a large number of these very employees never actually resigned from the primary membership of unions. Therefore, technically these employees were part of the union. This informal arrangement was also well utilised by the workers to elect union leaders on the company-wide employee consultation forum. Therefore, on the one hand workers kept their union in shape, while at the same time exerting external pressure on the company. Subsequently with the change in UK government in 1998 and the lobbying done by the union leaders in the industry forced the company to revisit its decision. The negative publicity also started having adverse impact on the company’s efforts to win newer contracts. Therefore, Vertex once again agreed to recognise UNISON by signing the recognition agreement in 1999 and a partnership agreement in 2000. Task-2: Outline the main elements of ‘partnership’ in employee relations. Assess the advantages and disadvantages of ‘partnership’ and consider how you might evaluate whether it has been as a success at Vertex? (Indicative word limit: 1250 words). It is believed that partnership breeds healthy and productive environment in a company by encouraging improved working conditions in the company. Partnership is certainly the leitmotif of Fairness at Work. Addison and Siebert (2002) said, ‘Partnership with the worker in a way results in treating the worker as an equal partner in the growth and development of the business. This motivates the worker as he feels valued. Outlining the importance of partnership in employee relations, the ILO has also envisaged that, “The social partners should strengthen social dialogue on training, share responsibility in formulating education and training policies and engage in partnerships with each other or with governments for investing in, planning and implementing training” (Heyes, 2007). Similarly, the EU employment strategy also underlined that, “The Member States will develop a comprehensive partnership with the Social Partners for the implementation, the monitoring and the follow-up of the Employment Strategy” (Rychly and Pritzer, 2003). Participation is a philosophy which takes into account the right of the worker together with his needs individually or collectively as part of a union. This way the management can devise policies beneficial for the worker as well as the organisation. The Trade Union Congress (TUC) of UK has outlined six key principles for making up of a meaningful partnership agreement1. The six principles are; First, a joint commitment to success of the enterprise. Second, unions and employers recognising each other’s legitimate interests and resolving difference in an atmosphere of trust. Third, a commitment to employment security. Fourth, a focus on the quality of working life. Fifth, transparency and sharing information. Sixth, mutual gains for unions and employers, delivering concrete improvements to business performance, terms and conditions, and employee involvement. These principles help us in understanding how a partnership can be strengthened by working out a sincere effort. Key elements of partnership in employee relations include; A commitment by all concerned to the success of the organisation: The commitment is required on the part of the worker, the employer and the regulator as well. Focus on the improvement of quality of life at workplace: A satisfied and motivated worker will be able to work to the best of his/ her potential. Quality of work life greatly influences the working efficiency. Due respect and recognition of each others’ legitimate roles by the employer and trade union: While the worker is supposed to give due respect to the supremacy of the employer, the employer too is supposed to take due care of the sensibilities of the worker. Commitment to job security: Worker must understand that he/she will remain a worker till the company keeps working profitably. Therefore, the worker must display commitment to the work and discipline Transparent decision taking: Management must be seen as being transparent in decision taking. Availability of a forum for the employee to voice his/ her thoughts/ concerns: The union meetings, the partnership meetings etc. provide good opportunity to the workers to discuss recent developments, concerns, misgivings etc. with their bosses and union leaders. This helps in clearing the air before it is too late. Consideration of employee partnership as value addition: The contribution of employee must be properly guided, so that it helps in adding value to the product or service Effective management system: Management in general and HR in general must adhere to certain principles in regard to payment of salary or perks, granting promotions etc. Performance indicators: While trying to encourage good workers, the company must provide ample opportunity to those who are somehow left behind. This can be done by pointing out the deficiencies in the form of performance indicators Strong leadership in management as well as in the union: A strong and sincere leadership in the company and the union will prove to a big advantage for effective management Facilitating Regulations: All efforts must be made to adhere to the government regulations Effective job design: Contemporary job design theories outline a set of functions, components and tasks depending upon the organization settings, requirements of the organization and the capabilities of the individual. Advantages of Partnership: Partnership with the workers results in advantages for the company as well as for the worker. Some of the tangible advantages for the company include; Improvement in the working environment which in turn results in increase in efficiency Business focused consultation and communication arrangements The company is able to handle change in a better way, as the workers are taken into confidence by the management before actually implementing the changes The conflict like situation gives way to cordial relations amongst workers and management. This leads to development of mutually acceptable mechanism for reviewing the salary structure, perks, working conditions etc. This results in better interpersonal communication, a prerequisite for effective management process Improvement in industrial relations helps in gaining competitive edge over rival companies A single status is established for all employees Company can adopt a more focused approach towards achieving the goals and mission In addition, the partnership approach also proves advantageous for the individual as well because the worker feels that improved industrial relations would give him a better job security Employees can also get better training and development opportunities which helps in shaping their career goals A healthy partnership can prove to be a positive force for generating newer ideas Disadvantages of Partnership: Some of the disadvantages can be; Company will have to make additional provisions in terms of resources like filing the reports with the regulator and making arrangements for the periodic meetings, to make the partnership going It will be very difficult for the company to go ahead with a quick plan in response to difficult situations, as there will be a fear of backlash from the union Unions are able to wield more pressure on the company and management, which in turn reflects on the collective bargaining agreements loaded heavily in favour of the employees In case of disagreements, many a times implementation of crucial policy decisions get delayed. It requires constant attention and monitoring from the top level of management If management is not able to handle the partnership arrangement properly, it becomes an undue drain on the resources for the company and might give rise to undesirable tension within the company Measuring the success of Partnership at Vertex Vertex has seen contrasting situations during the last couple of years. While trying to do away with the unions and working out negotiations directly with each employee, the company had to suffer adverse situations on almost all fronts. While the employees were agitated for obvious reasons, the company did not find favour with industry as well. The trade union bodies also found a reason to come out against this decision of Vertex and trying to make the company realise its folly. Vertex soon realised that it is not able to win contract in the industry. A change in government followed by pro-worker stance by the new government also made the company to rethink about its non-union model and engage UNISON into negotiating a partnership agreement. Subsequently Vertex was able to; Seek Partnership Fund money from the Department of Trade & Industry, which was subsequently used to fund a project. Company was able to identify and resolve key business issues like pay progression, diversity, flexible working and integration of Vertex’s formal consultation process with unionised collective bargaining. In 2001, Vertex also won the CIPD People Management Award for successfully implementing the partnership process. This is indeed a testimony to the success of partnership agreements that Vertex entered with unions in 2000. Credit must also go the management of Vertex who had to do an about turn in their approach towards unions, but they took it as a professional glitch in managing the affairs of the company, without any ill-will against any union leader. After realising the futility of pursuing a non-union model at the work place, Vertex not only went into a partnership arrangement with the employees, but successfully implemented it with honesty and sincerity. For that very reason, the company was also able to win the CIPD honour. References: 1. Addison, John T. and Siebert, W. Stanley (2002). ‘Changes in Collective Bargaining in the U.K.’ IZA Discussion Paper No. 562. Available online at http://ssrn.com/abstract_id=331062 (Nov 29, 2009) 2. CIPD (2008). Employee Relations – Survey Report-September 2008. Available online at http://www.cipd.co.uk/NR/rdonlyres/68771D46-0301-4ECA-A474-167F43058C63/0/4563EmploymentrelationsSR.pdf (Nov 28, 2009) 3. Heyes, Jason (2007). ‘Training, Social Dialogue and Collective Bargaining in Western Europe’. Economic and Industrial Democracy 2007; 28; 239. Sage Publication 4. OPSI (2004). ‘Explanatory Notes to Employment Relations Act 2004, 2004 Chapter 24’. Office of Public Sector Information’. Available online at http://www.opsi.gov.uk/acts/acts2004/en/ukpgaen_20040024_en_1 (Nov 28, 2009) 5. Rychly, Ludek and Pritzer, Rainer (2003). ‘Social Dialogue at National Level in the EU Accession Countries. ILO. Available online at http://www.ilo.org/public/english/dialogue/ifpdial/downloads/papers/accession.pdf (Nov 29, 2009) 6. Schmidt, Werner and Dworschak, Bernd (2006). Pay Developments in Britain and Germany: Collective Bargaining, ‘Benchmarking’, and ‘Mimetic Wages. European Journal of Industrial Relations. Sage Publications. Volume 12 Number 1. 7. TUC (2009). ‘Partnership means a grown-up relationship between bosses and workers’. Trade Union Congress – Britain. Available online at http://www.tuc.org.uk/partnership/tuc-4130-f0.cfm (Nov 29, 2009) Read More