Introduction to business

Table of Contents
History...................................................................................................................................................4
Recent Trends........................................................................................................................................6
Definition...............................................................................................................................................6
Explanation............................................................................................................................................6
EFFECT OF LABOUR PARTICIPATION IN DECISION MAKING...................................................................8
Fundamentals of Labor Relations..........................................................................................................8
Changing Employment Relationship......................................................................................................8
Collective Agreement Arbitration..........................................................................................................9
Collective Bargaining.............................................................................................................................9
Legal Framework...................................................................................................................................9
Financial Literacy for Labor Relations....................................................................................................9
Definition.............................................................................................................................................10
Types of employment separation........................................................................................................10
Termination.....................................................................................................................................10
 Constructive discharge:........................................................................................................10
 Layoff:..................................................................................................................................10
 Termination by mutual agreement:.....................................................................................10
 Involuntary termination:......................................................................................................11
 Voluntary termination:........................................................................................................11
 Temporary job or employment contract ends:....................................................................11
 Fired:....................................................................................................................................11
 Termination for a cause:......................................................................................................11
 Termination with prejudice:................................................................................................11
 Termination without prejudice:...........................................................................................11
 Wrongful termination:.........................................................................................................11
Resignation......................................................................................................................................12
 Voluntary resignation:.........................................................................................................12
 Forced resignation:..............................................................................................................12
Retirement.......................................................................................................................................12
 Voluntary retirement:..........................................................................................................12
 Phased retirement:..............................................................................................................12
 Mandatory retirement:........................................................................................................12

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Reasons for employment separation...................................................................................................12
 Employee performance:..........................................................................................................13
 New job opportunity:..............................................................................................................13
 Finances:..................................................................................................................................13
 Retirement:..............................................................................................................................13
 Relocation:...............................................................................................................................13
 Change in family dynamic:.......................................................................................................13
Voluntary Separation...........................................................................................................................13
Involuntary Separation........................................................................................................................14
Health problems..............................................................................................................................14
Behavioral problems........................................................................................................................14
Organizational problems.................................................................................................................14

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 Introduction to business

Labor management relation

History
The economies of Europe and North America
underwent drastic change beginning in the nineteenth
century as a result of the increased ability of
businesses to produce goods on a mass scale thanks to
technological innovations, such as the invention of the
steam engine and new techniques for manufacturing
textiles and iron. The Industrial Revolution, as this set
of economic and cultural changes was called, resulted
in a dramatic increase of people employed in
factories, mines, and other large-scale operations.
Employers no longer had personal relationships with workers, and there were no laws
regulating employer-employee relationships. In the nineteenth century it was common for
men, women, and children as young as six or eight to work in factories and mines for as long
as 16 hours a day. Such intolerable conditions became cause for public concern, and
gradually governments began intervening to establish laws regarding employees’ treatment of
their workers.

Even as labor laws began to be passed regulating working conditions and outlawing such
practices as child labor, the right of workers to organize into unions was generally denied in
both Europe and the United States. Members of unions such as the American Federation of
Labor (AFL), which was established in 1881, were routinely fired or blacklisted (added to
lists of people whom employers agreed not to hire), and strikes were suppressed by people
paid by management as well as by the government, which frequently contributed federal
troops to guard management’s interests.

This began to change at the beginning of the twentieth century in Europe, but in the United
States the government continued to side with employers until the Great Depression, when
public dissatisfaction with economic conditions became extreme. American workers won the
right to organize under the National Labor Relations Act of 1935, also known as the Wagner
Act. In the decades that followed, employers were required to recognize the right of unions to
exist, and to address their concerns under collective bargaining agreements.

Labor-management relations in the United States have varied greatly since workers first won
the legal right to organize. During and after the Great Depression, there was widespread
skepticism about allowing business owners to seek profits without any government or other
forms of intervention. Unions represented a balancing of the interests of workers with the
interests of management, and the American population generally supported the right to
organize and engage in collective bargaining. Unions also became an important political
force in the 1930s, putting pressure on politicians to pass legislation favorable to workers.

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Organized labor thus became a very powerful force in national life, and the number of
Americans who belonged to unions grew dramatically.

When the United States entered World War II in 1941, labor leaders promised the
government that they would not engage in strikes that might hamper the defense industry.
After the war, however, unions agitated for higher wages, and numerous strikes resulted. The
tide of public opinion turned partially against unions at this time, and Congress passed a law
in 1947, the Taft-Hartley Act, restricting the power of unions. Among other measures, Taft-
Hartley made it possible for management to hire non-union workers and to postpone strikes.

Though some amount of anti-union sentiment persisted between the 1940s and 1960s, in
general unions remained a very powerful force in American business and politics at this time.
Their power was partly a function of the economy’s stability. World War II had ended the
Depression, and the boom in industry sparked by the need for war materials continued in the
decades that followed. America was the world’s leading industrial power, and the skills
required in the workplace, like the products generated by U.S. industry, changed very little.
Workers, in part thanks to unions and their stable relations with management, could count on
wages that would allow them to pay for their basic needs, stable long-term employment, and
generous health-care and retirement benefits.

In the 1960s and 1970s, though, the United States fell behind other countries in industrial
productivity. Other countries could provide high-quality products at cheaper prices than
American companies could, and U.S. businesses had to change their strategies to compete.
One of the reasons that other countries had an advantage over the United States when it came
to manufacturing was that the higher wages paid to U.S. workers resulted in higher prices for
the final manufactured products. As management began trying to cut costs and find new ways
of doing business, their relations with labor grew strained. Business owners began reducing
wages and trying to increase efficiency through measures that cut into the gains unions had
made over the preceding decades.

The 1980s and 1990s saw unions struggle to maintain their strength, as changes in laws
pertaining to taxes and international trade made it easier for business owners to move
manufacturing facilities to foreign countries where workers could be paid less. These decades
also saw the U.S. economy shift from a focus on manufacturing to a focus on service, that
range of industries whose common denominator is that people are employed to interact with
other people, rather than to make physical objects. The financial, insurance, health-care,
legal, retail, real estate, and utilities industries are included in this designation. Unions had
always been strongest in the area of manufacturing, and they had never succeeded in taking
hold among service workers. Additionally, unions were not equipped to deal with the rapidly
changing realities of American economic life. Service jobs paid unskilled workers less than
manufacturing jobs, and management in these industries usually provided little in the way of
benefits. Workers could no longer depend on management for long-term employment, health
care, or retirement planning. Even though many working Americans were unsatisfied with
these realities, unions did not appear to have solutions, since the ground rules of labor-
management relations had shifted.

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Recent Trends
At the height of union influence in the 1940s, more than one-third of employed Americans
were union members. By the early 1980s, this figure had dropped to around 20 percent, and
by the early twenty-first century, only about 12 percent of the U.S. labor force was unionized.
In addition to the structural changes in the economy described above, unions in the late
twentieth and early twenty-first centuries had to grapple with government opposition under
conservative Presidents such as Ronald Reagan (1980-1988), George H. W. Bush (1988-
1992), and George W. Bush (2000-2008), each of whom consistently took a pro-management
stance in economic matters. The most heavily unionized industries, as of 2006, were those
dominated by local, state, or federal government entities and therefore not subject to the
rapidly changing economic realities that shaped other industries. While only 7 percent of
workers in the private (non-government) sector belonged to unions, more than 36 percent of
government workers were union members. The most powerful unions in the United States
were typically those of public-school teachers, policemen, and firefighters. Unions had been
instrumental in shaping the U.S. economy in the twentieth century, but workers at the
beginning of the twenty-first century were largely in the position of fending for themselves in
their relations with management. It was unclear whether organized labor would be able to
answer the challenges facing workers of the future.

Definition
The term “labor-management relations” refers to interactions
between employees, as represented by labor unions, and their
employers. Labor unions are organizations of employees in
particular industries, companies, or groups of industries or
companies, who join together in order to further workers’
individual interests.

Explanation
Traditionally, labor relations were considered as a relationship between employees and
employers. But nowadays, this has become a burning issue consisting of the relationship
between workers, employers and the social environment of the organization. It is a dynamic
socio-economic process that makes a social dialogue among employees, employers and the
organizational social environment. The importance of the human factor in any organization
cannot be overemphasized. Land and capital as non-human factors of production are
worthless unless there is the labor to utilize the machinery and the tools, and unless there is
the management to coordinate all other factors towards the achievement of the goals of the
organization, be it production of goods or delivery of services. Indeed, an organization can
only be as effective and efficient as its human resources. Traditional personnel management
sees human beings in an organization as machines but if these machines are not constantly
lubricated, then they may breakdown or cease to function and that is just about what the
human resource management sets out to accomplish in organizations'. The strength of any

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organization lies in its manpower, no matter the size of an organization or the worth of its
owner(s), the organization and its life span are in the hands of the people working in that
organization. The importance of human resources in an organization is further buttressed by
the observation of Romana and Anca (2013), they observed that in most organizations people
are now recognized as the vital asset whose knowledge, skills and abilities must be deployed
to the maximum effect if the organization is to become successful. They further observed that
the value of an organization relating to the people it employs and its human resource
strategies is gaining recognition and s generally accepted and goes to say that this has
implications for long-term sustained performance. Managers and employers of labor,
therefore, take very seriously, the training and development of its workforce (labor) to make
them more effective and efficient, so that the objectives of organizations are achieved with
minimal efforts. In general, there is a need for good human resource management. The
recruitment and selection process has to be standard and based on merit. Orientation,
deployment, training and development have to be put in place. Adequate compensation,
benefits, rewards and motivation have to be provided for employees and welfare issues
addressed at the right time. Workers wellbeing should be given adequate consideration.

The relationship between labor and management determines the kind of industrial climate
that may prevail in an organization. In the same vein, Long (2014) observed that there is a
need to maintain proper relations with employees and trade unions. That is, there must be a
cordial relationship between the two major human elements of production, labor on one hand,
and the managers on the other hand. This is where the concept of labor management relation
becomes significant. Labor management relation is concerned with the relationship between
workers, not as individuals but in their collective identity. Labor-management relations deal
with the internal arrangement between employers and workers’ unions (the trade unions) in
bilateral relationship within an industry, across industries or within an enterprise, to regulate
their relations affecting employment and its compensation (Yoder, 1958). Indeed, no
meaningful development could be achieved in an environment devoid of peace and
understanding, most especially, one involving labor and management. Labor-management
relations refer to interactions between employees, as represented by labor unions, and their
employers. Labor unions are organizations of employees in particular industries, companies,
or groups of industries or companies, who join together to further workers' interests. The
primary focus of Labor-Management Relations should be on the grievance, handling the
industrial dispute, and interpretation of labor laws, etc. it provides a context in which
organizational rules and regulations are framed so that organizational roles assigned to
members are performed.

EFFECT OF LABOUR PARTICIPATION IN DECISION

MAKING
Employees should be afforded the opportunity of directly
or indirectly participating in decision making, it is a matter
of social justice to let workers have a say, if in nothing, but

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at least matters affecting them an employee will work hard to achieve an objective knowing
he was involved in its formulation; a means of participation not only increases employee’s
contribution to problem analysis, but also enhances their ability to make important
operational decisions. Workers participation in decision making in an organization promotes
good industrial relations, improves commitment and production. Other words, in labor
relations, empowerment in the work place is allowed and employers and employees are seen
as partners. Management see participation as a way of increasing the commitment and control
of workers, trade unions see it as a way of increasing workers influence and control in the
work place, workers see it as a way of overcoming employer-employee conflict and of
achieving cooperation between management, trade union and workers. Nel (2002) opines that
industrial democracy is important to workers because it results in an increased share in the
control of organization in the economy and community as a whole. According to Pons and
Deale (1998) industrial 32 democracy refers primarily to participation in management and
participation in decision making process by the workers in an organization, in the same vein,
Elliot (1988) as quoted in Swanepol et al (200) defined participation as the act of claiming
right to have a say over matters affecting their work lives. Industry democracy is a
compelling aspect of management decision making, the reason for the involvement of
workers in decision affecting that affairs of the organization is hinged on the fact that the
workers are regarded as partners in progress by management, it is also important for
management to involve workers in decision, in order to ensure high level of morale and
performance.

Fundamentals of Labor Relations

 Roles of the different parties (union, management, government, third
parties)

 Brief history of the Canadian labor movement

 Best practices for good labor-management relationships

Changing Employment Relationship

 Shifting from full-time permanent positions to part-time, contingent
and contract work

 Changing attitudes toward work

 Shifting modes of employee representation and voice

Collective Agreement Arbitration

 Understanding the arbitration process

 Building a strong case

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 How to think like an arbitrator

 Landmark arbitration decisions

Collective Bargaining
 Understanding the bargaining context

 Developing negotiation strategy

 Building strong and effective bargaining teams

 Leveraging conflict to get results

 Finding common ground

 Maintaining good relationships

 Enhancing integrity and professionalism

Legal Framework
 Interpreting labor law

 Understanding labor legislation

 Human rights/contracts/employment standards

 Duty to accommodate

 Privacy rights

 Progressive Discipline

 Drug Testing

Financial Literacy for Labor Relations

 Financial Statement Analysis

 Understanding Financial Reports

 Utilizing Financial Reports in Bargaining

Employee separation

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Definition
Employment separation refers to the end of an employee's working relationship with a
company. This can happen when an employment contract or an at-will agreement between an
employer and an employee ends. While sometimes the employer makes the decision to
terminate employment, an employee may also initiate a voluntary employment separation if
they wish to retire or resign.

Types of employment separation

There are many ways for an employee or an employer to discontinue their working
relationship. While some types of employment separation may be initiated by the employee
and others by the employer, each circumstance is unique. Understanding what each type of
employment separation is can help you make the appropriate arrangements for your company
or your career. Here is a list of different types of employment separation:

Termination
One of the most popular ways to pursue employment separation is through termination. There
are several types of employment separation that fall under this category that may provide
guidance to employers or employees seeking a change. Here are some common types of
termination:

 Constructive discharge: There are some work environments that employees

may find challenging, even after they have attempted to improve their situation
multiple times. In these instances, the employee can choose to leave the company
through a constructive discharge, which can benefit them by offering them some of
the same rights as a discharged worker if their case for leaving is strong enough.

 Layoff: When a layoff occurs, an employee is let go through no fault of their own

due to changing business needs, such as an acquisition or restructuring of
departments. Future employers usually view being laid off more favorably than being
let go for other reasons, and employees who are laid off may receive extended
benefits and job search assistance to help them pursue a new career path they enjoy.

 Termination by mutual agreement: A termination by mutual agreement

occurs when both the employee and the employer agree to a separation. This type of
arrangement can benefit both parties by giving the employer time to hire someone
new and the employee an opportunity to plan for the next phase of their career.

 Involuntary termination: An involuntary termination takes place when an

employer chooses to let go of an employee. The reasons for an involuntary
termination can vary, but typically the employee is still willing and able to work,
which can make it easier for them to find employment elsewhere.

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 Voluntary termination: A voluntary termination takes place when an

employee leaves a company of their own free will. For example, an employee may
pursue voluntary termination when they accept a job offer with another company or
when they decide to retire from their role.

 Temporary job or employment contract ends: If an employee is

working with a company through a temporary job or a contract, the company may let
them go when their agreement ends. Both parties are aware of the final date of
employment in these situations, which often allows them to part on good terms and
provides the potential to work together again in the future.

 Fired: Sometimes an employee and an employer aren't a great match. An employer

may choose to fire an employee in these cases so both parties can pursue other
opportunities that align with their interests and goals.

 Termination for a cause: If an employee is terminated for a cause, the

employer lets them go for a specific reason. While this news may be challenging to
news to receive, an employee who understands why they were terminated may accept
this as a learning experience and use the employer's feedback to improve themselves
professionally.

 Termination with prejudice: An employer may choose to terminate an

employee with prejudice if they don't plan to hire the employee for the same job again
in the future. While this may also be challenging news to receive, it provides both the
employee and the employer with clarity and a fresh start.

 Termination without prejudice: If an employee is terminated without

prejudice it means they may be eligible to be rehired by the company in the future.
This type of termination typically occurs when an employee is let go for reasons other
than their performance and gives them the opportunity to apply for jobs with the
company again later in their career if they wish to do so.

 Wrongful termination: Wrongful termination occurs when an employer

dismisses an employee unlawfully. Since there are laws that exist to protect
employees, the employee may be able to receive compensation if they have a strong
enough case, which can help them move forward with their career.

Resignation
Many people see resigning from a job as a professional and courteous way to pursue
employment separation, which can help employees discuss their departure from a company
with future employers while maintaining a positive demeanor. The most common types of
resignation include:

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 Voluntary resignation: A voluntary resignation happens when an employee

chooses to leave a company for their own benefit. Employees typically provide their
employer with at least two weeks' notice to make arrangements before they leave,
which can make the transition easier for both parties.

 Forced resignation: There are some challenging situations where an employer

may ask an employee to resign or else the company must let them go. This option
gives employees the opportunity to leave their current role without being terminated,
which can work favorably for them when it's time to find a new job.

Retirement
As an employee nears the end of their career, retirement is often a popular topic of
discussion. While many employees look forward to this milestone, there are several reasons
they may retire from their current position, including age, health, finances and personal
preferences. Here are some of the most common types of retirement:

 Voluntary retirement: For many professionals, the end goal in their career is

to retire. When you reach this exciting milestone, you may go through the process of
resigning from your company voluntarily.

 Phased retirement: Companies may implement a phased retirement plan for

employees who are older. This can help both parties adjust by slowly reducing the
employee's work hours prior to their official retirement date.

 Mandatory retirement: An employer may implement a mandatory retirement

to encourage an older employee to retire for a variety of reasons. This can provide
employees with the opportunity to pursue other interests outside of work and allow
the company to train someone new to fill their role.

Reasons for employment separation

Here are some of the most common reasons for employment separation:

 Employee performance: An employer may choose to let go of an

employee if their work expectations don't align with each other. In these cases, the
employee may be better suited for a different type of work or find success with
another company.

 New job opportunity: An employee may accept a new job opportunity to

help them reach their personal, professional or career goals. Employees can usually
leave on good terms with their current employer if they provide at least two weeks'
notice for them to hire a replacement.

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 Finances: An employer may choose to furlough or lay off employees to save

money so they can sustain their company long term. An employee may also seek
employment separation for financial reasons if another company offers them a
position with a better salary or benefits.

 Retirement: As employees get older, they may choose to retire so they can
spend more time pursuing their interests outside of work. Retirement is often mutually
beneficial for the employee and the employer who may wish to acquire new talent to
fill the open position.

 Relocation: An employee may choose to move for a variety of reasons, such as

to be closer to family or to support a change in their spouse's career. In these cases,
leaving their current job may give them the opportunity to relocate.

 Change in family dynamic: Employees may choose to leave a company

based on changes within their family dynamic, such as having a child or becoming the
primary caregiver for a loved one. This type of employment separation may be
temporary or permanent.

Voluntary Separation
Voluntary separation, which normally begins after a request is placed in this regard by the
employee, can happen due to two reasons: professional reason and personal reason. We shall
now discuss these reasons in detail.
Professional reasons Employees may seek separation when they decide to seek better
positions, responsibilities and status outside the present organization. Efficient employees
would seek to expand their realm of knowledge and skills continuously by working in
different capacities/positions in various Organizations. In their quest for greater
responsibility, power and status, they may seek separation from the organization.
Personal reasons the important personal reasons for voluntary separation are relocation for
family reasons like marriage of the employees and health crisis of family members, maternity
and child-rearing. For instance, when working women get married, they often prefer to settle
in the partner’s place of occupation. Similarly, an employee may seek voluntary separation to
look after the child or parent.

Involuntary Separation
As mentioned earlier, an involuntary separation is caused by the factors which remain beyond
the purview of the employees. However, these factors may be classified broadly into health
problems, behavioral problems and organizational problems. We shall now discuss these
factors in detail.

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Health problems
Major health problems crippling the employees may make them invalid or unfit to continue in
the profession. For instance, accidents causing permanent disabilities and illness of the
employees like brain stroke and other terminal illnesses can lead to their involuntary
separation. Death of employees is another factor which results in their involuntary separation.

Behavioral problems
An employee's objectionable and unruly behavior within the organization may also lead to his
involuntary separation from the organization. When the employee’s behavior is unethical or
violates the code of conduct in force, the organization may initiate disciplinary actions, which
may eventually result in his termination. This may constitute an act of involuntary separation.
Consistent failure to reach performance goals by an employee can also result in his
involuntary separation.

Organizational problems
Organizational problems are another important factor that contributes to the involuntary
separation of employees. The poor financial performance of an organization may cause it to
terminate the services of some of its employees as part of cost control measure. Such
terminations are also classified as involuntary separation. Similarly, automation,
organizational restructuring and rationalization can also result in employee termination,
discharge or layoff, broadly called involuntary separation.

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