Understanding Australian Industrial Relations - Example

Employee Relations By (Student’s Name) Name of Class Professor’s Name University City of University (Location) Date Abstract The future of work is highly dependent on employee relations and industrial actions practised in any particular organization. To better understand the prevalent conflicts existing between employers and employees, the Marxist theory has been used in this analysis. Additionally, it has helped in establishing that conflicts in a capitalist economy arise from inequalities in access and control over capital and labour force issues. The study has further, found out that sourcing methods applied in companies may also lead to eruption of conflicts at the workplace due to the impacts they have on employees. Lastly, the study provides recommendations to various stakeholders in employee relations suggesting the vital roles they should play in the maintenance of healthy employment relations in any country for a better future of work environment. Definition of key concepts Employee relations: Refers to the efforts by an organization to manage employers’ and employees’ relationship, to ensure treatment that is not only fair, but also consistent. Industrial action: It is an action that may be taken either by employees or employers to resolve a workplace dispute regarding the conditions of work. Outsourcing: It is the practice where services are obtained, or tasks performed for a Company A by another Company B, with the intention saving on costs. Insourcing: This is the practice of utilizing a company’s employees as well as other resources for an accomplishment of a task. Remote sourcing: It is the practice of bringing in a third party to work with other employees within the company. Home sourcing: It is the act of companies outsourcing at the homes of individuals instead of employing personnel who are regular. Labor union: It is an organized workers’ association, regularly based on trade or profession, usually created for the protection and furtherance of the members’ rights and interests. Marxism theory: Originating from the works of Karl Marx and Friedrich Engel, the theory gives an analysis of societal conflicts in relation to class differences, with a materialistic elucidation of historic growth and a social change dialectical view. Introduction Productivity in an organization can directly be linked to the nature of employee relations. An organization characterized by an extraordinary level of immersion, assurance and assignation of employees experiences a climate of workers’ relations that is positive. Such a climate not only enriches the organization’s outcomes of business, but also improves the well-being of employees. In present-day, employee relations which has arguably substituted industrial action, is viewed as centring both on singular and mutual relationships in the place of work (Bray, et al, p44, 2014). It also portrays a focus on aiding line managers to establish relationships with workers that are based on trust. In specific terms, therefore, employee relations define the rapport between employers and workers. With advancement in technology, companies are finding it necessary to adopt new technologies to increase efficiency, productivity and profitability while avoiding costs and risks (Creighton, p35, 2011). This endeavour often may lead to a strained working relationship usually defined by a number of factors that may have either positive or negative implications on employees. Such factors include outsourcing, insourcing, remote sourcing and home sourcing among others. One then wonders, is this really the future of work? Are there measures that may need to be developed to preserve healthy employee relations even as employers seek increased profitability without biasedly acting against their employees? Using the Marxist perspective of industrial relations, a critical argument will be provided on the subject of employee relations. Further, impacts and issues for employees associated with outsourcing, insourcing, remote sourcing and home sourcing will be discussed, based on which, recommendations for relevant stakeholders will be drawn. Marxist theoretical approach to industrial /employees relations In order to completely appreciate industrial relations, an understanding of the nature of the relationship between employers and employees is crucial. The reason is that the arguments contended by Marxist perspective are characteristic of most employers’ and employees’ lives. Employees’ management is an essential piece of organizational life. Industrial relations are observed on precise concerns and circumstances when closely drawn and examined. Often, we look at how people conduct themselves and how they are projected to behave, as well as the manner in which their conduct can be converted (Weeks, p72, 2011). In this regard, with the intention of regulating employment relationships, industrial relations has developed recognition. It focuses on the shared facets between labour force and the management, as well as social welfare and order as collective problems. It is in this light therefore, that industrial relations is seen as a set of occurrences that operate from both within and outside the place of work, and with a concern of defining and modifying the relationship in employment. Marxist perspective assumes an evolutionary methodology to social change, supposing that the society is characterized by one-sidedness and disparities (Weeks, p91, 2011). In other words, this perspective’s focus is on the capitalist society. A capitalist society is featured by ultimate interest split concerning capital and labor (Creighton, p53, 2011). Work relations form the background of Marxist’s perspective. Further argument as provided by this theory is that, power and an economic wealth inequality is deeply rooted in the system of capitalist economy. Owing to this fact, conflicts are inevitable, more so, at the workplace. The perspective however, contends that without these class conflicts that result to change, the society would deteriorate. Additionally, society’s social and political institutions’ nature is derivative of the economic differences and strengthens the locus of the dominant’s group of establishment. Consequentially, according to this theory, this perceived social and political conflict is essentially a manifestation of the principal economic conflict. Workers therefore, are helped out by labour unions against exploitation by capital as the Marxist perspective contends. However, it is worth noting that industrial action works on the presumption that markets of labor are not impeccably competitive (Bray, et al, p69, 2014). Therefore, contextualizing the Marxist theory to industrial relations, a grander bargaining power is held by employers as compared to employees contrary to the situation in a typical economic theory. The conflicts that are witnessed between employers and employees as earlier discussed may for instance, occasionally, arise from a cry for an increase in wages against higher profits. To address these issues, in an environment where such conflicts are viewed as normal in an employment relationship, there is a need to understand the various recognized arrangements that typify and model the relationship of employment. Such arrangements include power structures, norms, employees’ grievance communication systems, arrangements for collective bargaining at the workplace, as well as regional and national levels to both public policy and regimes for labor laws. Managers can and may not be relied on to constantly serve the interests of employees especially when conflicts of interests characterize their employment relationship. Similarly in such a scenario, it is even harder to prevent employees’ exploitation. Situations like these call for institutional interventions to not only improve the mechanisms for the relationship, but also safeguard the rights of the employees. In this regard and in view of the Marxist approach, conflict of interests between employers and employees are viewed as severely aggressive and deeply entrenched in a system that is socio-political and economic (Weeks, p115, 2011). Thus, seeking an employment relationship that is balanced accords a lot of weight to the interests of employers. Therefore, only deep-rooted structural reorganizations are required to amend the antagonistic relationships intrinsic within capitalism. The Marxist perspective in this respect supports interventions to such conflicts by radical trade unions. Over other approaches to industrial relations, Marxist approach possesses two strengths; first, it permits unions to confront employers similar to pluralist theory. This is due to the intrinsic interests between employers and employees that arise from irregular income and wealth distribution (Aguinis, p54, 2009). Unions are formed by workers owing to the proneness of conflicts and on behalf of the employees, challenge management as well as the nationwide distribution product. Additionally, these unions avert the subdual of the ideas as well as aspirations of employees even though they may have contrasted with the goal of the organization. Secondly, application of this theory allows the state to play a role in protecting capital owners. The state offers this protection to both workers and capital owners in collaboration with unions. With this protection, disputing parties are guaranteed to achieve their individual objectives. However, the theory is signified as consisting of irregular and often opposing features that challenge its immense nature (Weeks, p72, 2011). For example, the state may offer to a portion of capital, a concession that may form extra costs or burdens to other capital parts. This would typically be in a case scenario where the state offers tariff protection on one side, thereby increasing cost of input on other controllers of capital. Nevertheless, despite this challenge, the theory has a major contribution in guiding employee relations in any working relationship. Issues and impacts of Outsourcing, Insourcing, Remote-sourcing and Home-sourcing to employees As identified from previous researches, there may exist issues between employer and employees arising from personal interests in part of both parties. For instance, whereas outsourcing increases expertise, flexibility, swiftness while eliminating the processes of recruiting, training and staff’s retention in positions that are irrelevant for a company, it also results to adverse effects to the employees (Schniederjans, et al. p66, 2015). For example, outsourcing makes people to be devoid of financial earning due to high unemployment levels and income loss. This is especially so because companies outsource experts in particular fields who are willing to receive lower pay, since the aim for businesses is to primarily cut cost while increasing output. Resultantly, employees who are semi-skilled lose their jobs running a risk of getting into poverty after loss of income. On the other hand, insourcing not only saves a company costs otherwise associated with outsourcing, but also enables the management to expedite control over its businesses subsequently leading to customer satisfaction thus boosting the company’s reputation. Additionally, on the part of the employee, they not only get to retain their jobs but also get their skills increased especially when they get trained to meet demands of the new tasks. However, there are initial risks associated with insourcing; addition of tasks to existing responsibilities on the part of employees may stress them out and lessen their efficiency levels (Schniederjans, et al. p69, 2015). Still, insourcing has the potential to boost the morale of employees, leading to increased company’s output in the long run due to acquisition of new skills and job retention. Remote sourcing which allows employees to work from remote locations other than the workplace similarly has benefits to the workers and on the company. On the company’s part however, it helps in ensuring cost efficiency and minimal risks associated with sourcing. Employees on the other hand, get to enjoy a good relationship with their employer (Aguinis, p84, 2009). This is because remote sourcing permits a closer co-operation for the in-house employees of the client. They have guaranteed and continued job security as the employer/client focuses on retaining workers throughout the project cycle since they are conversant with the organizational culture. Further, the employer wishes not to incur additional costs in re-training. Companies that utilize home sourcing, also known as home shoring, allow for employees to work at the comfort of their homes provided, they have suitable amenities for internet and telephone. These are employees working in employment for service industry. This sourcing method not only reduces costs to the employer, but also offers a number of advantages to employees. First, it is preferred by most workers due to the associated convenience of working from home, therefore presenting a highly appreciated opportunity (Schniederjans, et al, p70, 2015). Further, it helps prevent prejudice cases created from regional accents, mannerisms and speech rates where workers are home-sourced to work within their localities for work that entails calling. Additionally, the worker is able to enjoy probable tax benefits by utilizing a portion of their home for purposes of business. Lastly, employees with some form of disability and thus would struggle travelling to work are able to work from the comfort of their homes once home-sourced. This type of sourcing, therefore, highly encourages employees considering that trainings may only be done online. Application of Marxist theory in relation to impacts of sourcing methods to employees In a capitalist economy, largely characterized by unequal distribution of capital and labor as well as domination of self-interest by the employer and employee, conflicts are prominent. For instance, a close look at the effects of outsourcing to employees unveils self-interest by the employer to manage risk, cut on cost, and improve efficiency. This is to the demerit of the employee who faces forceful termination for lack of the required expertise by his employer. Further, the employee suffers income loss in this case and thus possible poverty and non-dignified living standards. The theory proposes composition of unions that advocate for the rights of employers in such situations. Furthermore, the 2013 Amendment Act for Fair Work in Australia for instance, has stipulations regarding unlawful termination from work and other general protections, as well as requests for friendly working environments (Creighton, p92, 2011). Incorporation of arbitration efforts by workers unions and application of the Fair Work Act would help balance the disparities to achieve a middle ground between employers and employees. Insourcing, home-sourcing and remote sourcing on the other hand, is favourable towards enhancing employee relations, since the benefits are rather enjoyed by both the worker and employer. Employees receive training at the cost of the employer who also benefits by working with people who are conversant with the organizational culture thus minimising risks especially with insourcing and remote-sourcing (Teicher, et al. p67, 2006). Home-sourcing further motivates workers by the virtue of comfortably working at home-flexible working conditions. Further, it allows employees with disabilities that may hinder them from travelling to workplace to perform their job-related tasks at home. Principally, this helps in filling the gap of unemployed individuals which further means improved distribution of labor and capital. Recommendations for key stakeholders; employees, unions, employers and the government among others The analysis has established that there exists conflict between employees and their employers owing to their divergent personal interests. However, while agreement instances may be present, the view of Marxists is rather limiting, joint regulation institutions should enhance the position of management as they postulate capitalism’s perpetuation instead of challenging it. Further, various stakeholders in employee/industrial relations have a role to play in regulating the relationship to better work environment and address issues related to insourcing, outsourcing, remote sourcing and home sourcing for the benefits of both the employer and employee (Alexander, et al. p105, 2008). Recommendation to key stakeholders i. Employees Employees should restrain from challenging system as trade unions will build a sense of impartiality in regards to the system. Further, employees should adhere to demands by government laws in respect to employment relationship for a sustainable socio-economic longevity. Additionally, employees should avail themselves to receive public or collective goods offered by the government so that they are adequately empowered to participate in employment so that companies need not to outsource under suggestions that employees lack expertise (Stewart, p115, 2011). ii. Employers Employers should practice fairness within employment relations and abstain from exploiting employees, for instance, allowing for friendly and flexible working hours for their employees, offering fair wages, positively motivating the employees, and encouraging open communication (Bray, and Waring, p38, 2006). Further, employers should encourage active participation among the employees, encourage team work, and avoid price acting and dominance by managers as well as partialities for improved employee relations. Assigning of challenging tasks to employees working in teams makes them more motivated to deliver to the best of their capabilities. This does not only motivate them, but also enrich employee relations. Lastly, employers should at all costs avoid outsourcing but rather adopt other sourcing measures that improve employee relations like remote sourcing or train the current employees, to suit the expertise requirements of the company (Stone, p56, 2013). iii. Unions Trade unions should take up the role of bringing together employee members to form a group whose main goal would be increasing wages higher than the postulated rates within pure forces of the market and the enhancement of working conditions. Past studies have established that the trade union concept is a derivative of employees’ unequal market power (McCrystal, p64, 2010). Other studies have also found that as compared to trade unions, individual employees have a frailer power of bargaining in labour market negotiations, thus, uniting workers increases their bargaining power. Labour unions should offer a collective voice or rather, an institutional response (McCrystal, p66, 2010). While offering this service, the idea is that there are two ways in all societies while dealing with social and economic issues; either exit or voice. The connotation of an exit mechanism is that, entities opposed the condition they hate. An example where this mechanism applies is where discontented consumers switch to substitutes or where an unhappy couple divorces liberally. Likewise, discontented employees with their present provisions of work can pursue employment somewhere else. On the contrary, a voice mechanism connotes that instead of differing and dodging a situation, entities could express their worries for the situation’s change. For example, employees who are displeased have a right to express that concern. Therefore, labor unions should help in conveying these concerns on the employees’ behalf to the employer. Unions should also take part in political undertakings. Usually, members and union leaders are often involved in pursuing objectives political in nature, for the interests of unions, workers, and working class. Unions have been often referred to as political movements by some scholars. Although the central role of unions is to collectively bargain, the ability and power of the government is to arbitrate raising the practicality of unions in the realm of politics (Hardy, and Howe, p17, 2010). Through relationships that grow between unions and political parties in many states, union’s show their involvement in making of political objectives. Further, unions should show their engagement in politics by backing up political parties promising to use objectives for union policy. Unions should therefore be actively engaged in politics and support political allies that they share political views with. iv. The government As a legislator, the government should serve through developing legal frameworks both for individual and collective statutes of labor. These should differentiate not only employers’ and employees’ rights of employment relationship, but also trade unions. In this regard, the government must have the prospective to endorse or daunt collective bargaining agreements’ spread (Hardy, and Howe, p29, 2010). It is worth noting that giving conditions that are legal to both trade unions and collective bargaining may seem as warranting a capital system’s validity. However, if the state validates trade unions, workers will have been empowered to not only express their prerogatives, but also experience a safeguard of their interests in the system. Provision of collective goods by the government, like, health care and vocational training is also crucial (Hardy, and Howe, p30, 2010). These goods are quite costly to employees. This provision assures a country’s self-sustenance as the whole workforce has suitably been cared for to effectively participate in employment. The government should play the role of controlling labor market (Hardy, and Howe, p88, 2010). It will do so by laying down structures and standards that relate to working hours for employees, healthy precautions and safety as well as wages. Such standards should be aimed at modifying antagonism over conditions of employment and employees’ payment. In the absence of these regulations, employers as well as the general society may abuse workers, which is unfair. In such a situation, the workers may be impelled to challenge the justice of government. Conciliation, mediation and arbitration are more roles that the government should take on in regulation of employment relations. The government should periodically participate in offering services that aid in conflict resolution to emblematic workplace disputing parties. Presence of unresolved issues may significantly undermine the capability to expedite amassing in a system that is capitalist (Hardy, and Howe, p32, 2010). In this regard thus, peaceful conflict resolution modes must be established by the government. Lastly, the government should implement the role of being an employer of labour. For most developed nations indeed, the largest labor employer is the public. This role will enable the government to not only control employment within its economy, but also incomes whilst still influencing labor employers who are private (Bray, and Waring, p77, 2006). The ability of the government to execute this role enables it to manage wages in such a manner as to deliver the system’s validity as well as profits accumulation. Conclusion Determinists have been noted to be strong supporters of the Marxist perspective. The theory indeed, portrays a limited but influential ability from an employee’s angle. Through use of trade unions, the theory suggests that class conflicts may be resolved thus neutralizing capitalism (Teicher, et al. p245, 2006). Marxists additionally contend that capitalist ownership as well as decision making stay conserved as a result of trade unions legitimising them while upholding the status quo. Industrial relations or rather, employee relations, remains as the central focal point for Marxists with the contention that no other literature had existed in this regard even from a trade unions perspective. Conflicts that arise between employers and employees as the former seek to increase profitability, efficiency, and productivity; or by the latter as they pursue an increment in salaries and wages, job security and better working conditions can be well addressed through arbitrations by trade/workers unions and application of the 2013 Amendment Act of Work Fair (Alexander, et al. p214, 2008). This is basically where the roles of the state in regulating employment relations come in through legislation. Tomorrow’s work place relations can be improved through appropriately solving employer-employee conflicts in the right channels as well as by addressing issues that lead to the growth of a capitalist economy. Bibliography Aguinis, H. 2009. Performance Management 2nd Edition. New Jersey: Pearson Prentice Hall. Alexander R; Lewer J; Gahan P. 2008. Understanding Australian Industrial Relations – 7th Edition Thompson Learning Australia/ Cengage Publishing Bray M; Waring P; Cooper R; Macneil, J. 2014. Employment Relations – Theory and Practice – 3nd Edition McGraw- Hill Australia Pty Ltd Bray, M; Waring, P. 2006. Evolving Employment Relations: Industry Studies from Australia McGraw – Hill Irwin. Creighton, B., 2011. A Retreat from Individualism? The Fair Work Act 2009 and the Re-collectivisation of Australian Labour Law. Industrial Law Journal, 40(2). Hardy, T. and Howe, J., 2010. Partners in enforcement? 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