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and importance of employee relations • Distinguish between and explain the various approaches to employment relations • State and explain requirements for good employee relations • Discuss the tripartite role of employee relations • Explain the importance and functions of trade unions in employee relations • Distinguish between collective bargaining process and collective bargaining agreement • Discuss the importance of preparation by negotiating parties • Identify and discuss the causes of industrial disputes • Identify and discuss the procedures for preventing and resolving industrial disputes • Explain the role of the industrial court in dispute resolution Definition of terms Employee relations, industrial relations and labour relations: are all terms that refer to those aspects of HRM where employees are dealt with as a group through collective agreements with trade unions. It covers all the relations between employers and employees in industry. Some scholars however see employee relations which is a more recent term as broader and includes employee participation in management decisions, communications, policies for improving coorperation and control of grievances and minimization of conflicts. The philosophy of HRM has led to a shift towards individualism rather than collectivism due to increased competition hence leaner and more efficient organizations, restucturing, the market economy and free enterprise are changing trade union legislation. This relationship is complex and multi-dimensional – e.g. it is influenced by the economic, social, political, psychological, ethical and legal factors. Employee relations covers the following issues; • Development, negotiation and application of formal systems of rules and procedures for collective bargaining, handling disputes and grievances, and regulating employment. Concerned with the formal and informal processes, which take the form of continuous interactions between managers and shop stewards, trade unions etc.
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The bargaining structures, recognition of trade unions and procedural agreements and practices, i.e. the collective relations between employers and trade unions.
Importance of employee relations • Improves cooperation between employers and employees • Minimize unnecessary conflict • Enable employees to play a part in decision making • Keep employees informed of decisions that concern them NB: Conflicts between employees and their employers arise because of different interests. For industrial peace to prevail, the employees and organizational interests must be merged or integrated. Organizations interests – those things employees would rather avoid e.g. o Meeting high output standards o Accepting managerial decisions o Disciplinary actions o Working long hours Employees’ interests – those which organizations are reluctant to provide e.g. o Increased wages o Safe working conditions o Time off with pay o Shorter working hours per week o Pay for overtime etc. Principles guiding management decisions regarding the employment relationship Decisions relating to employment relations management such as those concerned with union recognition, collective bargaining and worker participation are influenced by the manager’s ideology, values and philosophy, which form his frame of reference. These values include basic beliefs about how to treat employees, what motivates people and the role of unions in the workplace. Thus managers can be either opposed or supportive of unions. Purcell and Sisson (1983) refereed to two primary cognitive frames of reference unitary and pluralist perspectives. • Unitary perspective: The management sees the organization as a unitary system with one source of authority – itself and one focus of loyalty – the organization. Employees and the employer have one common objective with no conflict of
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interest. This view is in aligned to the HRM philosophy of commitment and mutuality. Pluralist perspective: Management recognizes that conflict is inevitable with rival sources of leadership and even a triple personality: economic, political and social. It accepts that “there is an opposition which does not seek to govern” The conflict can be managed through a formal system of negotiation and collective bargaining.
Armstrong (2001) refers to the following approaches: Adversarial – this is where management has more power than employees. They make all the decisions pertaining to the employment relationship. Threats and fear are used to control trade union activities. Due to greater awareness and higher education levels among employees, these type of relationship is no longer very widespread. Traditional – the employer sets the pace but there is mutual respect between unions and management. This is the most common relationship. Partnership – The employer involves the employees in decisions that affect them but still retains power. This type of relationship exists in few organizations. Power sharing – Employees are involved in strategic decisions of the organization. This type of relationshi[p is very rare. Antony et al (1997) suggest two approaches to industrial relations: Substitution approach is the use of good management practices such as fair play, job satisfaction, training and development opportunities and employee benefits to discourage trade unionism Suppression approach is the use of both legal and illegal means to discourage trade unionism such as threats of victimization, refusal to recognize unions, intimidation and failure to honour contracts. • Requirements for Good Employee Relations Constructive attitude: o Management and union should accept one another by management accepting workers as equal partners – associates and recognizing their union as custodian of workers’ interests. o Union accepting and appreciating the business system, the rights, authority and responsibility of management by respecting managers. Clear cut policies and procedure o All policies, procedures and rules pertaining to employee relations must be clear to all o HR managers must ensure that line managers understand and agree with policies to avoid conflict. Good and prompt communication system
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o Prompt communication removes suspicion rumours and doubts. HR managers must convince union leaders of company’s integrity and sincerity. Top management support o Employee relations is a staff function and derives its authority from line authority, HR manager in charge must report to top lime authority e.g. CEO or chairman. Training in industrial relations o Employee relations is largely a human relations problem, hence supervisors, foremen etc should be trained in relevant areas e.g. leadership and communication practices. Development of the right union leadership o Management should create conditions which would stimulate growth of competent union leaders
Role Players in Employee Relations The tripartite nature of employee relations STATE Secondary player
EMPLOYER Primary player
EMPLOYEE Primary player
The state plays the secondary role in industrial relations while the employer – employee is the primary relationship. o The state can influence the nature, quality and direction of industrial relations directly or indirectly. o Government is both “master and servant or referee”. Master by virtue of its legislative and control functions and servant as it has to look after the other party’s needs by creating structures and systems to institutionalize conflict and cooperation and to facilitate conduct of primary relationships. The government plays a “balancing act” between the employees and the employers NB: “The states role is to provide and maintain the institutional context in which the primary parties can interact.
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TRADE UNIONS Meaning Trade unionism is the result of the growth of modern industrial system involving mass employment of workers in conditions which make them helpless in bargaining for better terms of contract individually. The exploitation of workers by employers forced workers to unite thus trade unionism. Definition Trade unions are associations of workers that are specifically formed to maintain industrial peace and protect the rights of workers. According to Cole G.D.H., a trade union is an association of workers in one or more occupations carried mainly for the purpose of protection and advancing the members’ economic interests in connection with their daily work. • • A trade union is an organization of workers who have joined together so as to improve their interests. A trade union is an organization of workers formed to promote, protect and improve through collective action the social, economic and political interests of its members. The Objectives of Trade Unions Secure better wages for workers in keeping with prevailing standards of living and the cost of living in the country. Secure a share of the profitability of the organization for their members in the form of bonus. Ensure stable employment for workers by fighting against retrenchment plans (downsizing) Attain better conditions for workers by negotiating for shorter working hours, leave with pay, social security benefits and other welfare facilities. Enlarge opportunities for promotion and training of their members. Foster a sense of self-respect and dignity among workers. Provide a medium through which workers’ interests and grievances can be expressed. Facilitate and coorporate in technological advancement by broadening the understanding of workers on underlying issues Instilling in members a sense of responsibility towards industry and the community.
• • • • • • • • •
NB: Successful achievement of these objectives, depends on; • Level of industrial development in the country • Political and social conditions prevailing e.g. level of liberalization versus conservationalism of government e.g. labour party in UK, Solidarity Movement in Poland, COSATU in South Africa etc. Reasons why workers join trade unions Some of the reasons which have been given to explain why workers join trade unions include;
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• • • • • • • •
Dissatisfaction with management Need for social outlet Need for avenues for leadership Forced unionization – in organizations where union membership is a prerequisite for employment. Social pressure from co-workers. etc Reasons for not joining trade unions. Costs money to be a member of a trade union – annual subscription and levies. The feeling that trade unions are unnecessary especially if they are weak or employer has satisfied employees’ needs. The belief that one will get same benefits as collective bargaining usually covers same grades. The Shop Steward The shop steward is a key person in an organization which deals with a trade union because he/she is: The union representatives at the workplace and also an employee of same organization (serves two masters). Daily contact between union members and management – coordinates union activities at the workplace. Inspects union cards to ensure members pay levies. Acts as a recruiting officer for union Ensures that working agreements between management and the union are carried out. Represents fellow workers who have grievances. A historical perspective of trade unionism Trade unions first developed in Europe following the industrial revolution in the mid 19th century. To make good profits, employers adopted adverse practices such as long working hours and low pay. In response to this exploitation, workers joined together to fight for improved working conditions by means of collective bargaining through the formation of trade unions. Today trade unions function as workers representatives in grievance resolution efforts and provide mutual benefits and support to their members. In addition they also act as pressure groups in campaigning for human and workers rights, environmental and occupational health hazards. Trade unions exert pressure on governments and the international community to further their interests by supporting political policies and practices, sponsoring political parties and governments so as to push for representation in parliament. In Kenya, the first African trade unions were registered in the 1940’s. The Kenya Federation of Registered Trade Unions was founded in 1952 as an umbrella body.
• • • • • •
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This was later followed by The Kenya Federation of Labour with Tom Mboya as secretary general. In 1956, the Federation of Kenya Employers was formed, signaling the start of tripartism in labour relations in Kenya. After independence in 1963, several legislations were put in place to regularize the operations of the various players in trade union issues. THE COLLECTIVE BARGAINING AND NEGOTIATION PROCESS Collective Bargaining (CB) CB refers to the process of negotiating, settling employees terms of employment between union representatives and management, which apply to all employees. CB enables employer-employee issues to be handled in a systematic manner where open discussion and compromise are encouraged. The process prevents disputes and can be used to settle those that have occurred. However, it may lead to a highly bureaucratic relationship with management, encouraging a ‘them’ and ‘us’ mentality. The Collective Bargaining Agreement (CBA) CBA is a written agreement concerning terms and conditions of employment or any other matter of mutual interest concluded by one or more registered trade unions on the one hand and one or more employers or one or more registered employer organizations on the other. It is a legal contract binding on members of the trade union and the employer. The expected outcome of collective bargaining process is to reach an agreement on issues that regulate the employment relationship. The themes for collective agreements include the following: • Health and safety • Worker participation in decision making • Wage gaps, grading and performance related increases • Training • Benefits • Job security • Productivity and profit sharing • Period of agreements • Affirmative action • Flexibility in working hours • Workplace and organizational restructuring • Subcontracting, outsourcing and temporary labour • Independent mediation and arbitration NB: All collective bargaining agreements must include a procedure for resolving disputes about interpretation and application of the agreement. Persuasive communication as a source of personal leverage
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Negotiation is a process of persuasion. The purpose is to influence and alter the other party’s point of view and opinion so that an agreement or settlement can be achieved. It is the instrument which is used to persuade another party to change or accept an alternative. The ability to persuade is the a function of the ability to exert influence on the other party, which in turn depends on the use of power. The sources of power Power is the ability of a party to influence another to change its position or behaviour. It is a sly and elusive phenomenon. A party has power only if perceived as such by the other party and is acknowledged consciously or unconsciously. Power is the capacity to influence others through the control of instruments of reward and punishment – which can be tangible or intangible. Negotiation efforts entail showing that one possess power and are able to exert it. French and Raven (1968) have listed several sources of power: (i) (ii) (iii) (iv) (v) (vi) Legitimate power – derived from the position e.g. kingship, managerial Reward Power – derived from control of resources e.g. promotion, recommendation, training etc Referent power– derived from association with powerful people Coercive power – uses the ability to force other people to act against their wishes through the fear of punishment. Expert power – derived from the possession of expert knowledge or information that others need but have no alternative access. Personal power – derived from the personality
The Negotiation Process Negotiation is a process used to resolve conflict by civilized societies. The process involves: - recognizing that there is conflict - preparing to meet with one another - communicating with the aim of persuading the other party to change its position by using strategies and tactics as instruments of persuasive communication - reaching agreements which if implemented successfully will eliminate the conflict This process can be divided into: • The pre-negotiation stage • The negotiation stage • The Agreement The Pre-negotiation stage
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In this stage, the preparations for actual bargaining by the union and the management takes place. The Employers side: To prepare for effective negotiation, the employer can do the following; • • • • • • • Studying of previous contracts between the union and other organization. Studying the personalities of the union negotiators. Finding more information on the union. Understanding the personalities of the union negotiators. Defining the target settlement. Agreeing on the maximum employer is prepared to concede. Agreeing on the opening offer to be made which should provide sufficient room for manouvre.
Factors that determine employer’s target settlement • The relative strength of the employer and union case • Relative power of employer versus union • Size of unions claim • Likely target and minimum acceptable offer by union • Amount of room for negotiation • Employers ability to pay • The going market rate • The rate of inflation/cost of living The Union side: • The union representatives must define their target. • Define the minimum they will accept. • Decide on the opening claim to help them achieve the target. NB: Bargaining and negotiation involves the use of tricky acts that are aimed at misleading the other party. The Negotiation stage Teamwork approach in negotiation is usually favoured by both the union and the employers. Employer may have a committee made up of departmental and divisional heads and the company lawyer, while the union may consist of business agents, shopstewards and branch officials of trade unions. NB: Union bargainers are usually experts in the art of bargaining and negotiation as they are full time involved in the same exercise with other organizations e.g. dockworkers union, Kenya Airline pilots, union, Kenya union of domestic workers, hotels, educational institutions, hospitals and allied workers – KUDHEIHA, Banking, insurance and finance union.
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Strategy for Bargaining Union Management Claim 200%
Negotiating range is 10%
50% ( will
Maximum Target Offer
40% ( will 30% 10%
go on strike if less)
take strike if more)
NB: The employer must know how far it can go without risking a strike. Other strategies which can be adopted by employer during negotiation: • • • • • Avoid mutual agreement clauses that can prevent management right to control and manage the firm regardless of union contracts. Keep company personnel informed of progress of bargaining to avoid rumours. Develop agreements which make union appear like they have won and union lost. Determine the point at which the company is willing for the union to go on strike. (Management must adopt an attitude of not being afraid of a strike) Have in reserve conditions which employer can ask unions to accept in return for any concessions it may be prepared to make e.g. extended period before the next settlement or increased work output etc
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The Collective Bargaining Agreement (Contract) Successful negotiation lead to collective agreements which are sealed by the signing of a contract which runs for 2-3 years. This consists: • • • • • • • • • Security of the union and its members Grievances procedures and dispute handling e.g. provision of arbitration Promotions transfers and layoffs Wages, fringe benefits etc. Working conditions e.g. Leave, holidays etc Incentive pay, study leaves etc Safety and health insurance etc Management responsibilities A miscellaneous clause which keeps the rest of the agreement valid.
Unsuccessful collective bargaining/negotiations can lead to industrial action by the union. Trade unions use strikes, pickets, boycotts or go slow to pressure management to yield to their demand. STRIKES The trade disputes act defines a strike as: The cessation of work by a body of persons employed in any trade or industry acting in combination or a concerted refusal or a refusal under common understanding of any persons who are or have been so employed to continue to work. It includes any interruption or slowing down of work by any number of persons in any trade or industry action in consent or under a common understanding. • • • A strike is the ultimate economic force that a union can use to force employers to concede to their demands. A strike offsets the employers right to manage the firm. (makes the firm unmanageable) Without the possibility of a strike there can be no true collective bargaining.
Activity Recall the strikes that have occurred in Kenya over the last few years. Why do you think some succeeded and some failed? Types of strikes Ecomomic strike: The most common form of strike based on demand for better wages and working conditions. Recognition strike: Used to force the employer to recognize and deal with the trade union.
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Jurisdictional strikes: Occurs when two unions argue over membership and the employer is caught in the middle. Wildcat strike: • Quick, sudden strikes which are unauthorized and not approved by union leadership. • Carried out contrary to labour laws and agreements. • Shows a sign of fragmentation in union. • Instigated by a sub-group unsatisfied with regular grievance procedure. Sit-down strike or go-slow: • Illegal as the employees should vacate the premises by law. • Employers use lock-outs when there is a go slow strike (any striking employees should not be in premises otherwise it is regarded as invasion of private property. Sympathy strike: Occurs where other unions join in strike in sympathy with another union and this is illegal. In the event of a strike, employers must have a contingency plan for the efficient functioning of the organization. • Make sure the plant is left in good physical condition. • Explain the employers side of the issue to the employees. • Give a statement to the press • Inform suppliers and customers • Notify the appropriate mediation services e.g. minister for labour • Determine to what extent non-union personnel will be maintained on the working staff • Paying off striking workers for the work completed in the past. NB: Strikes are usually unfriendly and employers should do all they can to win the strike without violating the law. Costs of a strike Strikes can be extremely costly and damaging to the entire economy. It is for this reason governments intervene with laws, procedures and regulations to contain them to ensure minimal labour unrests and industrial peace Costs are: • Pre strike costs such as tension between employer and employee • Costs of reduced production • Legal costs • Costs of executive time spent in negotiation • Loss of orders from customers • Loss of profits for non-production
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• Executive time performing operative tasks • Use of casual staff/overtime costs • Hiring and training replacements • Loss of customers • Loss of income by strikers • Loss of morale and motivation by strikers Picketing Picketing is the patrolling of plant entrances by striking employees to ensure that the plant is not opened for business and remains closed. Usually they can remain peaceful if the employer does not attempt to open the plant, but can be violent if he attempts to open. Purpose of pickets is to ensure that the plant is paralyzed to cause maximum loss to the employer as part of union power to force demands. Employers can sometimes obtain a court injunction to limit the pickets that can be placed at the entrances. INDUSTRIAL DISPUTES Sometimes disagreements can arise between the union and the employer in the process of collective bargaining and implementation of the agreement. Definition An industrial dispute means any conflict, unrest or disagreement between the workers and the management on any ground. The trade Disputes Act cap 234 of the laws of Kenya defines it as; • A difference between employers and employees, or between employers and trade unions or between trade unions and trade unions connected with employment or non-employment issues. The important elements of industrial disputes according to this definition are: • It must be a problem/conflict related to workers and employer, among employers, trade unions or workers themselves. • Workers should be really engaged in work. • The cause for dispute must be related to work. E.g. dismissal, suspension, work allocation, recognition of agreements, redundancy etc. Effects of Industrial Disputes: Positive effects • Growth in workers unity. Unity is the basis of industrial disputes, workers tend to get united, organized and develop a sense of cooperation while disputing. • Improvements in working conditions and wages. The causes of industrial disputes are improvements in wages and working conditions. Successful disputes bring these benefits.
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Progress of labour unions as membership increases. Enactment of labour laws. These protect both unions and employers. Improvement of employers’ behaviour. With the fear of disputes employers behave and treat employees better. Negative effects • Hardship for workers. Loss of wages, distress, layoffs, etc • Loss of production – for employer in reduced profits, overtime, customers, image etc. • Loss of consumers / production on National Income – due to low production, there is low revenue, hence decreased incomes and standards of living. • Social /political disorders – lack of discipline among workers, labour problems tend to spill over to social and political unrests. • Decreased Investment – local and foreign. No one wants to risk their investment in an economically unstable environment. • Causes of industrial disputes Most disputes are a result of economic reasons and sometimes managerial or political. Economic Causes: • Low wages • Big industrial profits – if employer is earning high profits, workers demand for a share as they see themselves as partners in the company. • Working conditions – poor safety and health conditions, abuse, threats of layoffs, poor sanitation. Etc. • Working hours – demand for day offs, shorter working hours. • Demand for fringe benefits e.g. housing, transport, education and training etc. Managerial Causes: Includes bad management and policies. • Lack of trade union recognition. • Bad recruitment policies and practices such as contract system, poor terms etc. • Unlawful dismissals • Lack of implementation of collective agreements. • Disregard for code of conduct/labour laws by management. • Poor leadership of both unions and employer organizations. Political Causes and Others: • Interference by politicians for own selfish ends – e.g. calls by opposition to COTU to engage in civil unrest. • Strikes against the government to agitate for political freedom/independence e.g. Solidarity Movement in Poland COSATU in South Africa over apartheid, etc. PROCEDURES FOR RESOLVING INDUSTRIAL DISPUTES Industrial unrest is undesirable for all parties involved i.e. employer, employee and the government. Various measures are used to restore and maintain industrial peace.
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• • •
Methods for prevention of Industrial Disputes: Preventive measures include all methods that improve industrial relations e.g. • • • • • • • Enactment and enforcement of progressive legislation, education and training of workers, wage boards etc. Standing orders – refers to rules and regulations governing the conditions of employment of workers e.g. the industrial disputes Act. Employment Act, etc. Wage boards – established by government to ensure the wages for each industry and recommend suitable wages. Voluntary discipline Collective bargaining – the procedure of employers and Trade Unions on behalf of workers reaching an agreement about wage rates and other demands peacefully – the process of discussion and negotiation. Grievance handling system – refers to a model scheme provided by the government to handle complaints from workers. Suggestion scheme.
Methods for settlement or resolution of Industrial Disputes Should the above preventive measures fail and an industrial dispute occurs, then the procedure for settling the dispute has to be followed. This is covered under the Industrial Disputes Act, CAP 234 of the laws of Kenya. This requires the involvement of a third party which may be: Mediation Mediation is the process of resolving a stalemate between two parties by assisting them identify the problem but without making any decisions. The mediator takes a neutral role, suggests alternatives, assists the parties to identify causes of the stalemate, minimizes chances of work stoppages and tries to keep the two parties talking to each other. The mediator does not make decisions. Arbitration The process by which a dispute is resolved by an impartial third party after hearing all the facts to the issue. The decision made by arbitrators is binding by law. The collective bargaining contract and most contracts usually provide for arbitration as a final step. Voluntary arbitration – occurs when both parties agree to it in case of disputes Compulsory arbitration – forced by law e.g. by the industrial court. The arbitration process takes the form of a court hearing thus the burden of proof is on the party that initiated the complaint.
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STATE INVOLVEMENT IN DISPUTES Procedures: • A trade dispute must be reported to the minister for labour by or on behalf of any party to the dispute. • Minister shall consult a tripartite committee and he may reject or accept the report or refer it back to the parties, mediators or the industrial court. • Appoint a conciliator or a conciliation party made up of employers and Trade Union representatives and a neutral person. • Carry out investigations on the dispute through an investigator. • Refer the dispute to the industrial court as a last resort. The role of the industrial court in disputes settlements The industrial court established under the Industrial Dispute Act CAP 234 of the laws of Kenya, deals with the settlement of trade disputes and related matters. The court does not deal with: • Trade disputes in the public sector • Trade disputes which have not been reported to the Minister and 21 days elapsed since. • Disputes, which are under investigations. • Disputes where conciliation is in process. • Disputes where a certificate has not been issued by the minister stating that the minister has accepted the report and that all other machinery for settlement have been exhausted. NB: The Industrial court is referred as a last resort. GRIEVANCE HANDLING PROCEDURE AND DISCIPLINE Grievances arise as a result of conflict between employees and employers. Conflict is inevitable because each has its own interests and needs. A Grievance: A grievance is anything that an employee thinks and feels is wrong generally accompanied by an actively disturbing feeling. It does not have to be justified. It can also be implicit or explicit. According to Flippo, a grievance is any discontent or dissatisfaction that affects organizational performance. It can be written or oral, legitimate or ridiculous. A Complaint: is a discontent or dissatisfaction which has not as yet assumed great importance to the complainant. A complaint progresses into a grievance when the employee feels an injustice has been committed. When a supervisor ignores a complaint and the discontent grows within the employee, it assumes the status of a grievance. Characteristics of a grievance: • Expressed verbally or in writing.
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Related to company operation or policy. Involve interpretation or application of labour contract.
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The grievance procedure: - Is usually connected with an organization that deals with a trade union. NB: All companies with unions or not should have known methods for dealing with grievances. Employee must know where they stand in matters pertaining to justice or injustice of their treatment. The knowledge that the procedure exists is satisfying even though the employees never resort to it. Objectives of grievances Procedure: • Minimizes discontent and dissatisfaction that may have adverse effects in productivity. • Serves as a check on arbitrary management action. • Curtails misuse of power and authority by supervisors. • Enables management to detect defects/ flaws in working conditions. • Brings uniformity in the handling of grievances. • Gives employees confidence for he knows what to do to get justice. • Serves as an outlet for employees’ frustrations by acting as a pressure valve on a steam boiler. • Acts as a channel for upward communication NB: The grievance procedure is a problem-solving, dispute settling machinery, which is set up following an agreement between trade union and management and undertakes corrective measures. A grievance handling procedure is a formal systematic process – preliminary to an arbitration which enables the parties concerned to resolve their conflict in a peaceful, orderly and expeditious manner. Grievance procedures differs from one industry or organization to another because of: • Size of organization • Trade union strength • Management philosophy and values • Company traditions/culture • Cost Varies from even 2 steps to 10 depending on the above. E.g. A four step Grievance procedure: Aggrieved employee Shop steward Union committee Top union leadership Foreman Middle management Top management
Arbitration by 3rd party
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The aim should be to resolve the grievance at the initial step which usually involves the aggrieved employee, the supervisor and the shop steward. As the grievance goes higher up the ladder, it gets more difficult and face saving becomes more important. NB: Supervisors should be well trained in problem – solving to reduce the number of grievances that go past this level. If a grievance is not solved at the top – arbitration, strike or dropping of the case can happen. *END*
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