To What Extent Is The Employment Relationship Becoming More Individualistic - Essay Example

To what extent is the employment relationship becoming more individualistic? Introduction Employment relationship or industrial relations particularly refers to the legal relationship between the employer and the employee. Thus it’s obvious that employment relationship creates a set of reciprocal rights and corresponding obligations on the part of the employer and the employee. The existing labor legislation provides a series of benefits and rights to employees so that they are quite sure of the employment related outcomes (Salamon, 2000). Labor and social security legislation provides employees with benefits such as legally prescribed wages and welfare measures. Thus employers are subject to a framework of rules and regulations that seek to ensure the obligations of employers to employees. However the recent developments in the sphere of employment relationship have demonstrated that a number of new factors have forced both employers and employees to mutually agree on certain non-extant or poorly defined rules and regulations. For instance when the labor law is ambiguous the employment relationship becomes much more individualistic. In other words when an employment relationship does not exist it is almost impossible to define the legal outcomes such as rights and obligations of the relationship. In such a situation the employer and the employee might develop a vague and individualistic employment relationship (Guest & Peccei, 1994). The same applies to triangular employment relationship in which the employee might sign the employment contract with the agency rather than with the end-user. In such a situation the employment relationship might become too individualistic. The same principle can be applied to the disguised employment relationship in which the employee is treated by the employer as a non-employee without the rights provided by law and therefore minus the legal obligations cast on the latter by labor legislation. In other words it is an individual arrangement between the employer and the employee. Analysis The legal relationship between the employer and the employee defines the very essence of the employment relationship. However it has been pointed out by critics that the existing labor legislation and social security provisions do not adequately cover up the requirements of employees. In fact the employment relationship has become more or less an individual arrangement devoid of universal contractual obligations as found in International Labor Organization’s (ILO) documents. This phenomenon has acquired a new dimension under different disguises and ruses adopted by employers and imposed on unsuspecting employees (Healy, 1997). The former tends to arrange an individualistic relationship with the latter on the basis of immediate benefits of employment while the latter agrees more or less due to personal compulsions. Employment relationship ensures the availability of a number of rights and obligations to the employee and imposes some obligations on the employer. In the same manner it imposes some obligations on the employee and grants a right to the employer to obtain the service of labor of the employee. However, right now the employment relationship is becoming more and more individualistic. In order to determine the extent to which this relationship is individualistic it is necessary to examine the current trends in the UK in particular and Europe in general (Thompson & Ackroyd 1995). In the first place critics and researchers on the employment relationship have pointed out that the existing labor law is not only ambiguous and much narrower in scope but also open to varied interpretations. When the labor law does not adequately define the employment relationship as in the case of compliance and enforcement inadequacies attributed to health and safety legislation in the UK, there is bound to be problems in interpreting and understanding the very law that governs the employment relationship. In other words ambiguity leads to personal and often selfish interpretations of the law. Thus it is possible that employers and employees happen to adopt individualistic interpretations of the law. As for the disagreement between the two viewpoints it can be said that a point of reconciliation would be reached when it becomes mutually desirable for them to agree on those points that immediately matter for both. Despite the general vagueness of many labor laws and social security provisions in the UK employers have got in to recruitment drives with the intention of sign in employment contracts on this particular premise, i.e. they come to a mutual agreement on their individual understanding of the law. For instance the workplace health and safety legislation in the UK is variously interpreted by individual employers and employees. In the same way the minimum wage rules have been often violated by employers on the ground that they are amenable to a variety of interpretations (Towers, 1999). In such a situation many employers and employees tend to agree on their individual understanding of the law, thus avoiding a strict legally defined employment relationship. The extent to which such employment relationship exists cannot be known unless the attention is focused on the prevailing situation in some national industries such as healthcare, insurance, banking and finance, transport, education, hotels and agriculture. The prevalence of individualistic employment relationship is not an issue to be doubted. It is the extent to which it prevails in these industries in particular and rest of the economy in general. Compliance and enforcement has forced the UK government to adopt labor laws and social security provisions in conformance with the EU and UN requirements. However the British government has not been able to carry out compliance and enforcement to the extent envisaged in these laws. For example lapses and delays in implementing labor laws have compelled employers and employees to have informal arrangements that do not amount to a formal employment relationship (Cully, Woodland, O’Reilly & Dix, 1999). Assuming that a potential employer wishes to recruit a number of employees on the basis of what exists in the form of laws, he might seek to sign employment contracts with potential employees on the latter’s understanding of these laws. Such an understanding might not be enough to reject an informal employment relationship. In other words the arrangement between employer and the employee is devoid of employment relationship. Employment relationship can be too narrow when the law itself is narrow. Sometimes labor laws lack depth because they have been formulated to meet a specific need. As such they happen to be interpreted too narrowly since they do not have the provisions to identify and address all possibilities arising from particular situations in the workplace (Healy, 1999). Thus both employers and employees might stick to one narrow version of the law and arrange an individual employment relationship. Such convenient individual employment relationship can be regarded as the outcome directly related to the inadequacy of the law. Employers tend to identify a series of situations or scenarios that might arise outside the ambit of the law and as a result the employer can be compelled to apply remedies accordingly. Such remedies might entail some costs on the part of the employer (Edwards, 2003). Therefore it is obvious that employers are compelled by narrow and ambiguous laws to come in to agreements with employees outside the legislation. This means that employers have been familiar with such individualistic and informal employment relationship because more often than not employees have a tendency to accept what if offered unless they have very high marketable skills (Rose, 2008). In this sense the existing labor laws are pointers to the fact that employers and employees would come in to an individual arrangement disregarding the law if it benefits both. As for employment security that the employee might be worried about, it depends on the very survival of the business. Triangular employment relationships refer to those agreements signed with agencies by employees. In the absence of an agreement with the agency the end recruiter might sign a contract of employment (Brown, Deakin, Nash & Oxenbridge, 2000). Or such an agreement might be signed by the employee with both the end recruiter and the agency. The triangular employment relationship is associated with the more recent developments in both white collar and blue collar employment. For example where business organizations are hierarchically structured there can be recruiting agencies working for the organization to recruit or/and train employees for jobs with very short tenures and no job security at all. White collar workers doing clerical jobs are often hired by agencies and recruited in to a third party environment with much less by way of job security. This is how the employment relationship has become diversely individualistic. More recently blue collar workers are being recruited on the basis of triangular employment contracts that happen to be much less certain with regard to terms and conditions of the employment contract. However employers prefer such informal arrangements with little or no legal hassle because the ever increasing uncertainty of markets has forced them to reduce statuary commitments to the workforce. Further triangular employment relationship has acquired a more complex dimension in respect of the modern internet based outsourcing sphere. Jobs are outsourced by companies to other countries where companies hire workers to perform those jobs. When the work is completed it is often sent to the first company online so that the outsourcing company in the first country would not be liable to implement any of those labor laws and provisions. As a result the triangular employment relationship has become much more individualistic (Hollinshead, Nichols & Tailby, 2003). The disguise employment relationship is much more complex. For instance employers might adopt a variety of definitions in categorizing employment status such as open ended employee, formal worker, fixed term employee, agency worker and self employed home based worker. Whatever the employment status the majority of benefits arising from the employment contract are more likely to accrue to the employer as against the employee. Employers might tend to disguise the employment relationship by using excuses. When the employment relationship is impliedly disguised there is much less opportunity available to the employee to question the credibility of the employer’s commitment to the terms and conditions of the agreement (Blyton & Turnbull, 2004). In other words in the spirit of the letter, the agreement will be formal as far as the employee’s obligations are concerned while employer’s obligations can be held in abeyance because it is the latter who interprets it. Labor legislation in the UK has been little vague on the definitions of employment status. For example an open ended employee can be defined as one who enters in to a contract of unspecified time period with statutory provisions protecting his right to prior notice before termination. As such the employer might haphazardly fix the duration of the employment and issue notice of termination. The net result of this kind of employment contract is that the employee is more likely to lose his job at an earlier date than not. For example industrial relations acts past by individual member governments of the EU do not seem to address the long felt requirements of the open ended employee up to now. This dilemma has reinforced the general idea that open ended employment contracts are used by employers to exploit workers. Therefore employees might be compelled to agree to individual arrangements with the employer on the terms and conditions favorable to the latter. According to recent statistics one in every four employment contracts in the UK is an informal arrangement that disguises the employment relationship. This shows the extent to which the employment relationships has become individualistic though it doesn’t show how employers have been able to bypass labor laws and social security provisions when the existing EU regulatory mechanisms act as a compulsion on then to implement the minimum requirements. The reasons for disguised employment relationships might include compulsions on both the employer and the employee. For example employers have been bothered about the problem of deficient protection (McKay, 2001). Deficient protection means the inadequacy of protection against liability in case of statutory obligations. In the same manner the concept applies to employees who might be bothered about probable employers’ actions to limit their trade union membership. In the first scenario employers enter in to employment contracts with employees in accordance with statutory requirements (Kessler & Purcell, 2003). Assuming that certain statutory provisions do apply to the type of employment status within strictly defined limits, the employer might be compelled to comply with such provisions. However the extent to which he will comply with them depends on the employee’s willingness or unwillingness to accept some limitations. It is here that disguised employment relationships come in to existence. In the same manner an employer can apply duress on the employee to fall in line with the former’s needs such as not to join a trade union (Terry, 1999). However this is actionable liability on the part of the employer. In the absence of statutory protections for either party a disguised employment relationship can be the next best alternative. This reality is not lost on many employers and employees who have entered in to informal agreements. Though the member governments in the EU have been taking actions against this disguised employment relationships there is very little success against such arrangements. That is how the existing intra organizational employment relationships have appeared to be formal (Guest & Conway, 1999). In the eyes of the society and the government such employment relationships are governed by the same legal provisions that have been universally upheld by the member governments. Thus the intra organizational arrangements that have been made according to private compulsions of the employer and the employee are not obvious. They are in fact the very determinants of the extent to which such employment relationships are acceptable to the employer and the employee. By implication they determined the extent of the individual nature of these employment relationships as well. Recent attempts by government to control the extent of the prevalence of disguised employment relationships have encountered some legal problems. In the first place EU member governments are bound by EU legislation on the subject and therefore member governments are expected to adopt compliance legislation at home (Kelly & Waddington, 1995). However when it comes to implementation of such laws governments have to maintain whole departments and offices to carry out supervisory checks. Such work will amount to an additional burden on the governments’ financial provisions. Secondly both employers and employees have informal arrangements that preclude intervention by the government or law enforcement authorities. Thus critics of individualized employment relationships have suggested that the existing gap between compliance legislation and the subsequent enforcement has been responsible for the extensive violation of labor laws and social security provisions. In the EU in general and UK in particular the extent to which disguised employment relationships exist can be seen by looking at the number of agency hired workers during a given period of time (Green, 1997). According to researchers as many as three to four companies out of ten prefer recruitment through agencies because such recruitment efforts entail much less legal liability and cost. Finally academic establishments such as universities and colleges, hospitals, outsourcing service providers and HRM recruiting agencies all prefer informal agreements with their employees because the benefits associated with such employment relationships outweigh the cost. Therefore the government’s efforts to curb such operations cannot succeed against the tide. Basically the government’s efforts to implement laws in keeping with EU requirements have been much less successful against the evolving backdrop of complexity and diversity of organizational employment relationships environment (Turnbull & Wass, 1998). Thus the ever increasing significance attached to the individualized employment relationships cannot be denied. The problem is both industry-wide and nation-wide. Overall the extent to which such employment relationships become individualistic depends on the economy related pressures. This aspect of the problem has been ignored by many writers due to the fact that employment relationship is basically a legal issue. Therefore the subsequent relationship between the employer and the employee is taken for granted as a purely legal outcome. This attitude has failed to factor in a number of other exogenous variables such as the economic compulsions related to time (Storey, 2001). For instance the current global economic downturn has had such an extensive impact on employment relationships. Many potential employees in the EU have been compelled to think twice before rejecting even a highly unfavorable employment offer. This problem has been brought in to sharper focus owing to the influx of immigrant workers from Eastern Europe where former Communist economic policies are still hurting the citizens. As a result Western economies have been subject to considerable pressure. The response on the part of domestic employees and the immigrant employees is to agree on less favorable terms and conditions in the employment contract. Thus the individualized nature of the employment relationship has become of wide-spread problem today. Conclusion In conclusion it must be said that the employment relationship has becoming more and more individualized due to a number of factors. They include those related to the ambiguity and limited scope of labor laws; the implied absence of the employment relationship; the uncertainty about who the employer is; lack of enforcement and compliance; the triangular employment relationship and the disguised employment relationship. The above mention factors have contributed in large measure to individualize the extent to which informal employment relationship can exist. In other words the legally defined work place relationship between the employer and the employee has become rather individualistic to a greater extent depending on a number of endogenous and exogenous variables such as employers’ preferences, employees’ willingness to accept such relationships and even time related economic pressures such as the current global economic recession. 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