Union Decline and Workplace Reform - Literature review Example

About three decades ago, everyone who had studied or not studied Industrial relations (IR) knew that it is all about the trade unions, collective bargaining and managers (Marsden, 1982). However, there have been more recent attempts that try to explain the objective of IR where they are following a similar track defining it as a study of employment relationship. This is usually the case as researcher such as Kaufman (2004) defines IR as the study of employment relationship as well as behaviours, practices, outcomes and institutions that emanate from the relationship. It is worth noting that study of employment relationship represents the initial step where the next step involves identification of four elements which are actors, processes, outcomes and levels. Actors are the party to employment relationship and include workers, representative institutions such as trade unions and left political parties, employers, firm’s managerial representative as well as their collective organisations. The processes involve the way employment relationship is governed. Assessment of the outcomes of processes is also a great concern such as organisational commitment, job satisfaction, rates of productivity and profit all under social phenomena. IR is also conducted at different levels which stretch from workplace to global (Blyton, Heery, Bacon, & Fiorito, 2008). Among the IR scholars, one of the dominant normative orientations is pluralism. It is a frame of references which consists of core beliefs in regard to the nature of employee relationship. These beliefs provide a standard for evaluation of IR practice as well as serving as a guide to development of policy advice which represent an important component of an applied field. This article involves an analysis of pluralism in reference to industrial relations by focusing on its challenges based on neo-liberalism conceptualisations of modern workplace. It also analyses an example of a workplace change by use of neo-liberalism orientation which fits the change. Pluralism consists of five core beliefs in regard to the nature of employment relationship. First, the employment relationship holds two equally legitimate set of interests which are the interests of employers and those of employees. Second, while such interests are congruent in large degree, it is believed that there exists an irreducible core of conflict. To be prepared to acknowledge that there are conflicting interests then accept that conflict expression is not pathological is a defining feature of IR. Third, there exists an imbalance of power in employment relationship. In addition, as workers depend on employers as a means of subsistence, it places them in a vulnerable position. Fourth belief is that work has the right to combine in various types of collectivism such as trade unions for accumulation of power, to provide counterweight to employer’s dominant position as well as pursuing their separate, legitimate interests. Finally, collective organisation by employees and creation of a pluralist system of IR that is based on collective bargaining, trade unionism and regulation of conflicts serves the interests of employees and also the public interest. Thus is based on the belief that IR system successfully integrates working population into democratic societies (Blyton, Heery, Bacon, & Fiorito, 2008). From the pluralist conception, there are several features of IR in regard to employment relationship. First, the research agenda has mostly focused on the concerns, experiences and needs of workers and their institutions. On the other hand, this orientation has not represented employer’s interests. This feature has been in persistence even though a large number of field’s members currently work in business schools. The quality of work that individual employees experience or exploring the strategies for revitalisation of unions is an indication of continuing vitality in regard to pluralist tradition. Secondly, a considerable IR research body is critical of employers as well as their practices, identifying unethical, oppressive, inefficient and exploitative features of management practice, in particular a context of non-unionism or light regulation. Therefore, the classic policy that IR pluralists adopted supports collective bargaining as well as associated auxiliary legislation that underline it (Ackers, 2007). Although pluralism is a dominant orientation, it has been challenged by other neo-liberalism, Marxism and feminism. Neo-liberalism agree that employees have legitimate interests which they will pursue inevitable. But inefficiencies will occur and consumers’ interests suffer if they are not restrained by both management hierarchy and competitive markets. Based on this perspective, competition and control are important in order to keep the interests of the producer in check. Thus, based on this orientation, regulatory institutions that restrict management hierarchies’ restrictions and restrain competition are suspicious. Thus, those institutions that according to pluralist analysis offer solutions to problems in labour markets are seen by neo-liberalists as the source of problems (Blyton, Heery, Bacon, & Fiorito, 2008). There are four main type of argument mounted by neo-liberals against pluralism industrial relations. First, argument involves the questioning of the severity of social problems which are the pluralists’ target of regulatory intervention. According to neo-liberalists, there is less need for redressing of power imbalance by the unions in employment relationships when self-employment, second jobs, ownership of shares as well as private property will make workers depend less on the earned wages from a single employer. This can also be related to an equal argument against legislation of minimum wage where many workers who earn low wage live in multi-income households. As result, they do not solely depend on their own income. The second argument is based on futility thesis questions regulation’s capacity to moderate the outcomes of the market at least in longer term. Such include the claim that laws on minimum wages will simply lead to displacement of employment into the informal sector. Another example is based on the argument that pattern-bargaining in a union can never result to taking wages out of competition and will simply lead to displacement of employment into the union economy (Blyton, Heery, Bacon, & Fiorito, 2008). The third argument is based on perversity thesis which indicates that a regulation will rebound against a certain group that this regulation was meant to help. Such a rebound mostly involves destruction of the jobs that the legal regulation protection or those of unionised workers. As it is explained by Troy (2004), high lower productivity, unemployment, downsizing and the export of production to other countries that was experienced in Franco-Germany can be attributed to work councils as well as unionism. The councils and unions are the ones that pluralists urge and commend tom impose on their places of work. The final argument is based on jeopardy thesis which indicates that a regulation leads to destruction of other states that desirable such as national competitiveness. As Troy (2004) explains, the effect of strong trade unions has been felt in the school system of America. The union led to rising of educational costs as well as imposition of externalities which include ill-equipped uneducated children to compete in the labour markets in America. Thus, from the perspective of many neo-liberalisms, unionism is meant to create inefficiency and low quality through imposition of the rules of work on managers that elevate the interests of producers above the interests of the consumer of goods. Based on neo-liberalism perspective, the description of the challenges can be focused on deregulation of industrial relations. For neo-liberalism, they usually call for either weakening or withdrawal of legislations which tends to interfere with market forces. In addition, they retain the managers’ capacity in regard to responding to market signals. On the other hand, the regulation can be unavoidable. In such as situation, there is a preference weak form of regulation such as the ‘soft law’. Such is the case in UK where it was required to put into practice the directives on European social policy which provides a preference for weak forms of regulations. The legislation on employment is weighed continuously in the balance in order to identify the potential costs as well as dysfunction consequences. Even closer examinations in regard to shooting of regulations that are attributed to collective bargaining and trade unions as well as the weakening of the capacity of the union have been notable. Such notable aspect had been noted in areas where the public policy has been shaped by neo-liberalism (Blyton, Heery, Bacon, & Fiorito, 2008). Based on the comments of neo-liberalists (Roberts, 1987), trade unions’ only legitimate role involves provision of the services of labour market to their members. This means assisting the labour market to operate in a more effective way through provision of information and skills. It is also important to note that although deregulation may be seen as the key idea of neo-liberal in description of industrial relations, it also has a clear agenda based on reconstruction of work relations. This agenda lays focus on the use of financial incentives in regard to reduction of principle agent problems as well as re-aligning managers, employees and shareholders’ interest. This explains the reasons why neo-liberals are against the US educational union’s action. This is because of the opposition of these unions to merit and incentive pay. It is worth noting that neo-liberals usually have a certain enthusiasm in regard to employee share-ownership and sharing of profit. The diffusion of the ideas of neo-liberals comes along with an international trend of promoting the shareholding of the worker through tax incentives as well as other policy instruments (Blyton, Heery, Bacon, & Fiorito, 2008). Since 1980s, the core of economic policy in Australia has been neo-liberalism. This was characterised by a mix of declining stoppages, declining union membership and neo-liberal legislative reform in the place of work. Neo-liberalism has been aiming at creating conditions that boost the profits of companies as well as increasing return. The legislation on workplace has also changed with implementation of many neo-liberal policies. These policies have been seen to promote individual contracts in the workplace and a move that is eventually sidelining unions as well as third parties. In turn, they are turning to individual contracts of employment which are used to determine conditions and wages. Legislative change has been gradual but also in the process of decentralising and individualising the determination of conditions and wages. Thus, this explains the key characteristics of deregulation and reconstruction of work relations (Perry, 2007). An example of a workplace change is change at Pasta Co. Terry who is an employee is wondering if he can keep working at the company due to changes in the place of work. The change in managerial representative resulted to introduction of individual contract due to introduction of new laws. The employee was not a member of any union and his previous years’ wages and working hours were under Commercial Travellers Award that later changed to Commercial Sales Award 2010. The contract provisions were highly suspicious and insulting to employees, but later after complaints, the provisions were revised. The state has been involved in reforming of legislations which include the Commercial Travellers Award and later legal changes making it Commercial Sales Award 2010 (Bray, Waring, Cooper, 2011). This explanation fits neo-liberalist orientation on basis of various factors. First, change at Pasta Co is focused on deregulation as it is clear that the company is focused on weakening legislations that may seem to interfere with the company’s market forces. The move is also aimed at retaining the capacity of the management in order to ensure increased response to market signals. In addition, the orientation is based on reconstruction of work relations with more focus on re-aligning the interests of shareholders and employees. This is evidenced by the move to adopt contracts from the previous legislations in order to align the interests of its employees. Secondly, the company is also creating conditions that will ensure that its profits are boosted. There is a change of implementation of the policies within Pasta Co as a way of promoting individual contracts that are evidenced in Pasta Co management. Thus, such factors represent a neo-liberalist orientation (Perry, 2007). However, this is in contrast with the pluralist orientation which focuses on the concerns and the needs of its workers as well as lack of representation of the interests of employers. Conclusion Pluralism represents an orientation that is more directed to the interests of the workers and their institution while on the other hand, little attention is focused on the interests of employers. It is also important to note that pluralist orientation is more related to the past where the regulations tend to boost unionism, a factor that may slow down the achievement of organisational goals. However, as a result of this, this orientation is more challenged by other orientations. Neo-liberalism orientation has been trying to overcome the unionism challenge focusing on deregulation of softening of these rules as well as providing the employers with an opportunity to maintain the profitability of the firm. This has been the case in Australia where neo-liberalism was adopted since 1980s.this orientation is evidenced in Australia industrial relations through declining of union membership and reforming of legislations in regard to the place of work. According to our case study that involved change at Pasta Co, there is evidence of neo-liberalism as the company look for policies that will boost its profits and increase its returns and changing or reforming of the legislations on the place of work. Neo-liberalism policies are also evident as they are directed towards encouraging individual contracts and sidelining unions in determinations of conditions, wages and other benefits. Thus, presence of reconstruction of work relations as well as softening of legislations is a clear indication of a neo-liberalist perspective. However, most characteristics represented in the company under study are contrary to the pluralism perspective. Finally, union membership has been declining in Australia in recent decades. In addition, legislated neo-liberal reforms in the place of work have led to the decline of unionism where the decline has been facilitated by the presence of workplace reforms. References Ackers, P 2007, “Collective bargaining and industrial democracy: Hugh Clegg and political foundations of British relations pluralism”, British Journal of Industrial Relations, vol. 45, no, 1, pp. 77-101 Blyton, P, Heery, Bacon, N, & Fiorito, J 2008, The SAGE Handbook of Industrial Relations, SAGE Publications Ltd, pp. 14-21  Bray, M, Waring, P, & Cooper, P 2011, Employment Relations, McGraw-Hill Australia Kaufma, BE 2004, “Employment relations and the employment relations system: a guide to theorising” in BE Kaufman (ed.) Theoretical perspectives on work and employment relationship. Champaign IL, Industrial relations research Association, pp. 41-75 Marsden, R 1982, “Industrial relations: a critique of empiricism”, Sociology, vol. 16, no. 2, pp. 232-250 Perry, LJ 2007, “Union Decline and Workplace Reform”, Australian Review of Public Affairs, Vol. 8, No. 1, pp. 19–46 Roberts, B 1987, Mr. Hammond’s Cherry Tree: The Morphology of union survival, Eighteen Wincott Memorial Lecture, Occasional Paper, London, The institute of economic affairs. Troy, L 2004, The twilight of the old unionism. Armonk, NY: M. E Sharpe Read More