MGF2341 Managing

Employee Relations

Topic 10: Managing conflict and

dispute resolution processes

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gf2341 Managing Employee Relations
 Learning objectives
• To identify different causes of conflict from the IR
perspective

• To identify different forms of conflict from the IR

perspective

• To analyse causes of conflict in the workplace

• To examine grievance procedures and the principles of

a conflict resolution strategy

• To explore dispute resolution processes in general

MGF2341 Managing employee relations 2

 Individual causes:
• Personality differences

• Cultural differences

• Poor communication

• Workplace incivility which leads to:

– Bullying, harassment, discrimination

• Poor management/people skills shown by supervisors and other managers

• The (legitimate or otherwise) application of HRM practices such as performance appraisals,

being directed to undertake training, not receiving a promotion or a reward or a bonus or a pay
increase, etc

• Poor/low job satisfaction; work overload; unnecessarily short project deadlines; conflicting
work priorities; under-resourcing (equipment, people, time) for a project

• Issues away from the workplace (e.g. family and caring responsibilities; domestic and family
violence; personal relationship issues and breakdowns; addictions; financial pressures, etc)

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 Individual forms of conflict at the workplace

§ Individual or unorganised forms of conflict by employees

are usually covert:

§ i.e. hidden in the sense that they are NOT usually

regarded as ‘conflict’ but behavioural issues.
§ They include uncoordinated, individualistic, and private
expression of discontent, dissatisfaction, apathy, or protest:

§ i.e. accidents are a form of individual conflict with the

physical environment, not with another person.

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 Individual forms of conflict at the workplace

§ Such conflict may take the form of:

§ absenteeism,
§ staff turnover at the instigation of the employee,
§ sabotage,
§ pilfering,
§ accidents (i.e. employee is in conflict with their environment,
conflict between people can cause lack of concentration and
increase the likelihood of accidents occurring),
§ low morale,
§ low productivity,
§ lack of co-operation with management or other employees,
§ accidents and incidents.
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 Individual forms of conflict at the workplace: Costs

§ The financial costs of individual forms of conflict are

often greater than those of collective forms for both
the organisation and the individual employee.
§ From the employee’s perspective, the costs come
in the form of poor mental and physical health,
breakdown of personal relationships both at work
and away from work, behavioural changes
including addictions, etc.
§ From the organisational perspective, they are
often ‘hidden’ in HR budgets for staffing, rather
than addressed directly as a form of conflict.

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MGF2341 Managing Employee Relations
 Individual forms of conflict at the workplace: Costs
§ The (HRM) staffing costs associated with individual conflict are the same as
for those associated with failed recruitment and selection:
§ costs of advertising the vacancy
§ fees paid to recruitment agencies
§ fees paid to consultants for conducting tests, checking references, pre-
employment medicals, etc
§ termination payout amounts, such as pro rata long service leave and pay in lieu of
notice
§ loss of productivity from other employees filling in for vacant position + stress and
burnout from overwork
§ loss of productivity in early stages of employment
§ loss of productivity in final stages of employment
§ loss of reputation if turnover remains high
§ in-house hiring costs:
§ termination administrative costs
§ training/induction costs
§ HR time involved in the process
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 Individual forms of conflict at the workplace: Costs

Costs of individual conflict are higher than for organised collective conflict.

“You may be surprised to learn that the calculations [of replacement costs] can
easily reach 150% of the employee's annual compensation figure. The cost will
be significantly higher (200% to 250% of annual compensation) for managerial
and sales positions.

To put this into perspective, let's assume the average salary of employees in a
given company is $50,000 per year. Taking the cost of turnover at 150% of
salary, the expense would then be $75,000 per departing employee. For the
company of 1000 employees that has a 10% annual rate of turnover, the annual
total is $7.5 million!”

Source: William G. Bliss (2004) “Cost of employee turnover”, The Advisor,

http://hrtogo.com/pdf/turnover-cost.pdf; accessed 20 April 2015.

If anything, these costs have increased significantly since 2004.

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 Individual forms of conflict at the workplace:
Termination of Employment

§ Termination of employment can be initiated by

either the employee or the employer and results
in an employee leaving the organisation. High
turnover is a predictor of underlying problems at a
workplace (i.e. there will not be an ER culture and
there will likely be poor or no HR practices and
strategies in place).

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 Individual forms of conflict at the workplace:
Adverse Action
§ Adverse action under s342 of the Fair Work Act 2009 includes dismissing or
refusing to employ a person, and also includes discriminating against a
person or otherwise injuring the person in their employment.

§ Adverse action also includes employer action against an employee because

he or she is engaging in a lawful industrial activity, and the dismissal of an
employee who is temporarily absent from work due to illness or injury.

§ In order to make a general protections claim under the Fair Work Act 2009
employees simply need to allege that they were ‘adversely affected’ by a
management decision made because of their workplace rights, or because
they possessed an attribute such as race, sex, age, etc and were
discriminated against accordingly.

§ This means that general protections against adverse action are accessible to
a wider range of people.

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 Individual forms of conflict at the workplace: Unfair
Dismissal
§ Unfair dismissal under the Fair Work Act 2009 occurs when an employee has
experienced a harsh, unjust or unreasonable dismissal that was not the result of
genuine redundancy and which was inconsistent with the Small Business (employing
less than 15 full-time equivalent employees) Fair Dismissal Code.

§ Note that the claims for individual redress after adverse action and unfair dismissal
have been and continue to be mainly brought by trade unions on behalf of their
members.

§ Unions may just be doing their job on behalf of members; in unionised workplaces,
employees have somewhere to go to voice concerns, i.e. the union.
§ In non-unionised workplaces, usually such individual instances of conflict go
unrecorded and therefore may remain unresolved. This is despite Australian
employers claiming that direct employee voice is their preferred mechanism of
hearing employee concerns and solving them (this method is probably preferred
as it is easier to ignore than if there is union voice involved).

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Reflection 1

Is conflict always bad?

Presentation title 12
 Collective causes:

• When enterprise bargaining negotiations reach a bargaining impasse

• When a unionised workforce votes against a proposed enterprise

bargaining agreement (Hastings dispute in week 9)

• When trade unions and their members have not been consulted about
workplace changes (i.e. employer breaches a clause in an enterprise
bargaining agreement about consultation)

• When job security is threatened (Hastings dispute in week 9) or the

National Tertiary Education Union (NTEU) action aimed at the Monash
University Art and Design Faculty to protect the jobs of some staff)

• When there is a workplace health and safety issue at a unionised

workplace (e.g. Grocon 2011-2013)

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 Collective forms of conflict: Protected action

• In Australia, as in overseas jurisdiction such as Canada, New Zealand and the

United Kingdom, bargaining representatives (in this case, trade unions and
members) can take lawful or protected industrial action during bargaining.

• A range of protected industrial action can be balloted for by union members under
the Fair Work Act, including:

– employees performing work in a manner different to how it is normally

performed i.e. usually a work-to-rule whereby work is done only according to
specifics in the position description and no other general duties or duties as
directed
– employees adopting a practice that restricts, limits or delays the performance
of work i.e. go-slow
– a ban, limitation or restriction by employees on performing or accepting work
(i.e. work ban like in the Hastings Dispute in week 9)
– a failure or refusal by employees to attend for work or perform any work i.e. a
withdrawal of labour or a strike.
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 Initiating protected unionised industrial action

• The bargaining representative (i.e. the trade union) calls a meeting of

members to decide if protected action – and what forms – will be taken.

• The bargaining representative (i.e. the trade union) must then apply to
FWC for a protected action ballot order.

– The application must specify the group of employees to be balloted,

and the questions that will be put to them (which include details of
the proposed industrial action).
• A copy of the application must be provided to the employer and the
proposed ballot agent (the party that will conduct the ballot - usually the
Australian Electoral Commission) within 24 hours of the application.

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 Initiating protected unionised industrial action
• FWC will then consider the application:

– If it meets the requirements, FWC will issue a protected action ballot

order.
– This is required to be given to the applicant, the employer and the ballot
agent.
• Protected action ballots are secret ballots that give employees the
chance to vote on whether or not they want to initiate protected
industrial action.

• Before the ballot takes place the ballot agent will prepare a roll of
eligible voters included in the protected action ballot order, which
includes employees covered by the proposed agreement and are
represented by the bargaining representative.

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 Protected industrial action

• For a protected action ballot to authorise employee/trade

union industrial action, a number of conditions must be
met:

– the industrial action must relate to the questions that formed part
of the ballot application order
– at least 50% of employees on the roll of voters in the ballot voted
– more than 50% of those valid votes approve the industrial action
– the action must start within 30 days of the declaration of the
results of the ballot (unless this period is extended by FWC).
– The FWC can also call off protected industrial action at any time if
there is a danger to public interest or the national economy (i.e.
usually at the responsible Minister’s request)
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 Protected industrial action: The employer and lockouts

§ An employer can also lockout its employees without pay by giving three days’
notice to the FWC once a bargaining period commences.

§ In response to union-initiated industrial action, an employer may lockout

employees from their employment on notice.

§ The latter occurred at Qantas in October 2011 (see Qantas video on Moodle
week 10; also BHP began standing down workers in preparation for a lockout
in week 9 – the latter is hidden in the other details of the dispute).
§ The Workplace Relations Act 1996 allowed employers to use the lockout as an
offensive weapon and part of a deunionisation and cost-cutting strategy.

§ A lockout could be used to force a unionised workforce on a collective

enterprise agreement to take up individual Australian Workplace Agreements
(AWAs) with changed conditions and lower pay. This was legal until the
passing of the Fair Work Act 2009 eliminated AWAs. This problem still
occurs with labour hire arrangements (see CUB as an example).
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 Protests as the result of lockouts by management look
much like protests by striking workers – often the media
report images of lockouts as strikes

‘Occupy Melbourne’ demonstration against the Qantas lockout of its

employees in October 2011 and the subsequent grounding of its fleet
Reflection 2
Why do people resort to public protests?

Are the reasons same or similar as the

reasons for resorting to strike action?

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 What is a grievance procedure?

• A grievance procedure is a formal and agreed process that parties in dispute are
required to follow in an attempt to deal with or resolve their grievances.

• They typically follow a number of sequential steps which are laid down in the
procedure.

• The steps tend to involve progressively higher levels of management and

worker representatives so that power relationships become important in
determining the outcome of the procedure.

• Grievance procedures generally require the process of resolution to begin as

near as possible to the level at which the grievance arose but the procedures
themselves can extend beyond the workplace level.

• All enterprise agreements must contain grievance procedures aimed at

resolving actual and potential disputes.

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 How was the conflict at FibreTek resolved? Was it resolved?

Assessing the effectiveness of a grievance procedure: Moving to

a conflict resolution strategy (1) – Source: Dr Don McKenzie
• The organisation must be committed to justice and fairness in dealing with
workplace conflict;

• Options for preventing, identifying, and managing and resolving conflict as

required by individual circumstances;

• The promotion of a culture that works to solve problems at the lowest level;

• The integration of a collaborative problem-solving approach into the culture of the

organisation;

• Both formal and informal conflict resolution processes must be developed and
promoted;

• There must be multiple access points within the procedure;

MGF2341 Managing Employee Relations 22

 How was the conflict at FibreTek resolved? Was it resolved?

Assessing the effectiveness of a grievance procedure: Moving to

a conflict resolution strategy (2) – Source: Dr Don McKenzie
• The empowerment of employees to select from a range of options for
addressing conflict;

• The right of employees to select from either internal or external conflict

resolution providers, where third parties are involved;

• Support for employees to raise concerns without feat of retribution or

punishment;

• Natural justice and procedural fairness;

• Confidentiality and privacy of individuals must be protected;

• Transparency of principles, processes, and outcomes;

• Matters must be dealt with without unnecessary delay.

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 Alternative Dispute Resolution (ADR) defined

• In the current Australian system, the Fair Work Commission

(FWC) has a considerable role in dispute (conflict)
resolution.

• When explaining dispute or conflict resolution mechanisms,

there are a number of alternative dispute resolution (ADR)
processes to be considered.

• The concept of ‘alternative’ describes those processes that

do not involve traditional court proceedings and judicial
determinations.

– ADR may also mean ‘assisted’ or ‘appropriate’ dispute

resolution.
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 Mediation

• Mediation in Australia is usually considered to be a process in which

the participants, with the assistance of a dispute resolution practitioner
(the mediator), identify the disputed issues, develop options, consider
alternatives and endeavour to reach an agreement.

• Mediation may be thought of as negotiation in the presence of and

under the control of a neutral third party.

• The mediator may be a person external to the organisation or an in-

house mediator.

• The mediator is usually regarded as having a facilitative role rather

than an evaluative role (think of the grievance procedure and
facilitator’s role in the ‘Diversity issues at FibreTek case study).

MGF2341 Managing Employee Relations 25

 Conciliation – Role of FWC
• Conciliation in Australia is an ‘evaluative process’, in which the parties
to a dispute, with the assistance of a conciliator, identify the issues in
dispute, develop options, consider alternatives, and attempt to reach an
agreed outcome.

• A conciliator attempts to find common ground between the disputants and

may also advise on or determine the process of conciliation.

• A conciliator can also make suggestions for the terms of settlement, give
expert advice on likely settlement terms, and actively encourage the
participants to reach agreement.

• A conciliator, unlike a mediator, requires expert knowledge of the issues

in the dispute.

• A conciliator is more interventionist in the process of settling the dispute

than is a mediator. 26
MGF2341 Managing Employee Relations
 Arbitration – role of FWC

• Arbitration is a quasi-legal (i.e. more formal) method of

dispute settlement in which an independent third party –
the Fair Work Commission (FWC) considers the
arguments and evidence of both sides and then makes a
determination (i.e. decision).

• determination is based on the law (e.g. Fair Work Act

2009), the award, the enterprise agreement, the contract
of employment, and past (precedent) decisions.

• Arbitration traditionally followed conciliation if the latter

process was unsuccessful.

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Final Reflection

Why do grievance procedures cause angst,

stress or worry for those involved and why do
they often fail to bring about a satisfactory
resolution?

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 Summing up conflict and conflict resolution
Conflict can occur in many different
forms and from many different causes.
Conflict is actually a normal part of any
workplace (pluralist perspective) and
can be solved using one or more of
the available methods. Incivility often
leads to bullying and harassment at a
workplace so stop rudeness when it
occurs.
MGF2341 Managing Employee Relations
The Fair Work Commission
(FWC) holds the pre-eminent
place in resolving workplace
conflict in Australia, including
unfair dismissals, bullying, and
industrial action.
Grievance procedures may be
costly and intimidating for
employees to engage with so
that individual conflict may go
unreported and unresolved. All
organisations should adopt a
conflict resolution strategy
based on the findings of Dr Don
McKenzie 29