Class Employer - and - Employee - Relations

Employer and Employee Relations
Human Resource
Management
Learning outcomes
Analyse the dynamic nature of
relationships between employees,
employers and their representatives.
Examine the methods used by

employees and their representatives in
pursuit of their objectives
QUESTION
Why is Good employer

employee relations
important for Business?
 Aiming to create a
strong employer-employee
relationship within your
organization is IMP.
 Many positive results arise

when employers and their
workers respect and trust
each other
The role and responsibility of employee and employer representatives
Managers strive to ensure that

there are good working
relationships at work.
Poor working relationships often
lead to low morale and conflict
(disagreements)
The role and responsibility of employee and employer
representatives
Extreme actions taken by the

disgruntled workforce include strike
action or rioting.
Employee and employer

representatives deal with sources of
disputes on behalf of their members and
conflict resolution
Collective v Individual Bargaining
In the nineteenth century workers used to
negotiate their own pay and conditions with
their employers- INDIVIDUAL BARGAINING.
Collective bargaining occurs when workers

allow the union to negotiate on their behalf.
Negotiations can be with an individual
employer or an employers' association.
Collective bargaining
 Theprocess of settling matters

such as pay levels and working
methods and conditions between
trade unions and employers
through Negotiation.
Tra yer
un de plo
ion Em
Negotiations
is a bargaining process
whereby 2 or more parties
attempt to achieve a
mutually acceptable result.
Collective bargaining vs negotiation
 Collective bargaining The process of negotiating
the terms of employment between an employer
and a group of workers.
 What is terms of employment?
 The terms of employment are likely to include
items such as conditions of employment, working
conditions and other workplace rules, base pay,
overtime pay, work hours, shift length, work
holidays, sick leave, vacation time, retirement
benefits and health care benefits.
 It is not feasible or economic to deal with each
worker/staff member separately.
 Therefore agreements are made between

representatives of different interested groups,
management & workforce collective
bargaining
 Collective Bargaining Aim – arrive at a mutually
acceptable agreement
 Can be at a local or national level
Negotiations
 Employees and employers may enter prolonged
negotiations on pay and conditions.
 Employees may be able to put pressure on

employers to improve their existing offer,
especially if the employees are represented by a
trade union or accomplished negotiator, such as
an experienced agent.
 It is rare in any negotiation for either side to put

forward their least acceptable position.
Negotiation
Amethod of conflict resolution that
involves bargaining and discussion in
order to reach an agreement that is
either a win-win situation or at least an
acceptable compromise to both parties.
Negotiations
 For example, in a bargaining process, employers
will normally offer pay increases below the level
that they are prepared to pay.
 Similarly, trade unions are likely to ask for large

improvements in pay and conditions, but be
willing to accept lower improvements.
 Both sides may be prepared to compromise and

reach agreement without threats.
Aims of negotiation
 A win-win outcome for all involved.

WIN – WIN??
 It may be possible to negotiate a dispute
 to the mutual benefit of both parties through
two-way communication skills.
The imbalance of power
 Employees are viewed as the weaker party
of the two.
 As such, they are protected by employment
laws.
 These laws cover issues such as
discrimination, unfair dismissal, worker
exploitation, etc.
 However, employees are often unable to
protect themselves on their own due to the
power imbalance against employers.
Trade Union
 A Trade Union is a group of workers who have joined
together to ensure their interests are protected
Trade Union/Labour union
 Employees generally have the same interests
 improving pay,
 working conditions
 being treated fairly
 given proper training
A union is there to help employees to achieve improvements in

different aspects of their employment.
Is a type of pressure group
Unions can be found all over the world in countries such as the
US, AUS, UK, Papua New Guinea, etc
Trade unions
Trade unions
 Employees may come together to protect
their interests and further them in
organizations known as trade unions.
 Theseorganizations are pressure groups

which can be quite influential in exerting
force on businesses to increase wages or
change working conditions.
 This
is done through a process known as
negotiation or collective bargaining.
Teachers Trade Unions
are on strike in Wisconsin,

USA (May 2011)
Why do workers join a union?
For an annual fee that

pays for the employment
of union officials, they
will represent the views
of those in the union to
achieve their aims.
Trade Union Membership
 Advantages
 Strength in Numbers
 Improved Conditions of
Employment
 Improved Workplace Environment
 Improved Benefits
 Improved Job Satisfaction
 Advice & Financial Support
 Further Benefits
 Employment where there is a
closed shop
Employee Associations
Trade Unions
These are organizations that are
established to protect and
represent workers. Their roles
may include:
 Giving legal advice

 Ensuring a safe working
environment
 Negotiating pay and other
conditions
 Participating in the decision-
making process
Advantages of trade unions to
members
 Improving pay BEN
 Changing pay method E FITS
 Improving working conditions
 Provision of legal advice
 Provision of financial support to unfairly
dismissed workers
 Continual professional development
 Safety and security
Trade Union Membership
 Trade Unions seek to
 Put forward views to the
media
 Influence government
decisions
 Improve communication
between workers &
management
Types of trade union
Craft Union
 A craft union is a trade union which represents a
particular type of skilled worker.
Craft unions
 Workers of common skill.

 Example: doctors’ union such as the
American Medical Association (AMA)
Blue collar union
 Manual labor such as factory workers.

Types of trade or labor unions
 General union-different skills in different
industries. E.g. General Workers Union (GWU)
General Union
 A general union is a trade union which represents
workers from a variety of trades in the industry. They
are often un-skilled but also semi-skilled workers.
Industrial Union
 An industrial union is a trade union which
represents all types of workers in a particular
industry
White-Collar Union
 A white-collar union is a trade union which
represents non-manual workers.
 Office staff, managers, and professional people
White collar union
 Professional workers such as bankers and

brokers.
EXAMPLES
1. Craft unions – engineers
2. Industrial unions – from same
industry
3. General unions – from any
industry
4. White collar unions –
teaching/banking
EXAMPLES
1. Craft unions : represent skilled workers from one occupation
2. General unions -unskilled workers from many occupations
e.g. TGWU (Transport and General Workers' Union).
3. Industrial unions representing mainly workers in one

industry. E.g. NUM (miners' union).
4. Professional or white-collar unions skilled workers in mainly

service industries.
E.g. NUT (teachers' union).

Single-Union Agreements
 A Single-Union Agreement is where a firm

deals with only one particular union.
 Advantages for
employees
 Discussions clearer
 Greater power
 No disagreements
between unions
 Better working
relationship
 Disputes solved quickly
 Advantages for employers
 Only one union to negotiate with
 Better working relationship
 Disputes resolved more quickly
 Easier to agree to changes
 Better relationships
The Structure of a Trade Union
President
National Executive
Head Office
Regional offices Regional offices Regional offices Regional offices
Branch Branch Branch Branch Branch Branch Branch Branch
Individual Members
Employer Associations
Similar groups exist for

employers. They may
exist to:
 Support employers in
lobbying the
government.
 Offer technical support

 Provide legal advice
Employer Representatives
 Individuals /Organisations
 Represents Management
 In Collective Bargaining
process.
 E.g. Specialist
management
Consultancy firm, small
team of highly skilled
individuals in
management team
Employee-Employer Relations
Employee-Employer Relations refers to the

relationship between employers and their
workers. This relationship is influenced by:
 Pay negotiations
 Negotiations about terms and conditions
 Involvement of workers in decision-making
 The degree of trust
 How each party is represented
 The culture of the organization
Bargaining
Bargaining is the process of negotiation

between employees and their employers
to determine the conditions of their
employment. Bargaining can be:
 Individual (done by an individual
employee), or
 Collective (involving an employee
association)
The Decline of Collective
Bargaining
Collective bargaining is now less popular than
it once was:
 Membership of trade unions has fallen
 Legislation has reduced the power of trade
unions
 More employees are protected by other
legislation e.g. Health and Safety laws
 More flexible working practices are now used
and people often work in teams
Industrial/employee Methods used by
employees to achieve their objectives-
 Collective bargaining
 Go-slows (slowdowns)
 Work-to-rule
 Overtime bans
 Strike action ( walk out )
INDUSTRIAL ACTION
 The different action employees and

employers might take to support their cause.
Industrial/employee Methods used by
employers to achieve their objectives
 Collective bargaining (negotiations) – e.g. setting
short deadlines.
 Threats of redundancies – however it doesn’t
mean that employers can mistreat/fire employees.
 Changes of contract – changing terms &
conditions of pay when renewing the contract.
 Closure – close the business
 Lock-outs –it occurs when the employer
temporarily stops employees from working during
an industrial dispute.
Threat of redundancies -
 It is a common practice for employers to

threaten a workforce with compulsory
redundancies if they do not agree with
management proposals, such as low pay
increases or even pay cuts.
 However, whatever action is threatened,

employers need to ensure that it is not in
breach of employment law.
Changes of contract
 Employers may not renew contracts unless

employees accept different, and probably
inferior, terms and conditions or
employment.
 Closure - employers may issue an ultimatum
to employees that unless they accept the
employers' terms or stop industrial action
that they will close the business resulting in
redundancies.
 The threat may be one the management are

prepared to follow
Lock-outs
 This is where employers, rather than employees, prevent
work from happening.
 The employers prevent the employees from entering the

premises and conducting their duties.
 In effect, it is a strike by the management to compel a

settlement to a labour dispute on terms favourable to the
employer.
 The lock-out means that employees may not receive any

wages.
Industrial Action
 This is taken by trade unions to decrease or halt
production
Strikes
 Employees fully withdraw their labour and

refuse to work. This is usually in response to the
breakdown of collective bargaining or to an action
by management that is seen as provocative or
threatening to the employees' rights.
 The strike may be for a fixed period (e.g. one-day
strikes), rolling (in that there are a sequence of
strikes) or full-time until the dispute with the
employers is resolved.
 Strikes are official if sanctioned by the union
after consultation with the workforce,
or unofficial when a group of employees
decides to withdraw their labour without
official sanction.
Industrial Action
 Strike Action
 A Token Strike
▪ Short Stoppage
 A Selective Strike
▪ Few selected workers walk out
 An All Out Strike

▪ All union members stop work
Industrial Action
 Picketing
 Support strike
 Stand outside workplace
 Try to persuade other
workers not to go to work
 May halt production all
together
 Gain publicity
 Company gets bad
publicity
 Applies pressure
Industrial Action
 Work to Rule
 Strictly, Rigidly follow

rules/regulations
 Work often slows
 Workers paid normally
 Nothing wrong
 Occurs when employees do the absolute
minimum required, as stated in their
contracts of employment.
 In essence, they adhere to all the rules and

regulations to reduce productivity
Industrial Action
Work to Rule
There may be several checks that should be

made to a delivery lorry before it goes out on
delivery.
All these checks may take a long time ad

therefore some checks will normally not be carried
out every time the lorry goes out.
 Employees follow exact rules and procedures to the
letter.
 For example, they refuse to undertake any
activity not directly specified in their contract of
employment and ensure they arrive at work
exactly on time and leave immediately their shift
is complete.
 This will also reduce productivity and therefore

total production.
Industrial Action
 Go Slow
 Similar to “work to rule”
 Workers do jobs more slowly
 Deliberately take longer to

complete tasks
Go slow
 Employees deliberately use strategies to

work slower and reduce productivity and
total output.
 They may do this in a number of ways, such

as paying specific attention to every health
and safety requirement or simply taking
longer over every task.
Industrial Action
 Non-Cooperation
 Workers refuse to
have anything to
do with new
working
practices that
they do not
approve of
Industrial Action
E.g.
A new administration
procedure may involve
the workers filling in
more paperwork.
They would refuse to

fill in the forms
Overtime bans
 workers refuse to do overtime.

 In some industries, such as communications,
this action may be extremely disruptive as
employees frequently work overtime to
maintain acceptable levels of service.
 Once again, this will reduce productivity and
therefore total production.
Possible Harmful Consequences of
Industrial Action
Loss of Output Loss of

Income/Profit
For Employers
Poor Cash Flow

Customers maybe
Reputation Problems
lost to other firms
as orders not
delivered
Industrial Action
Loss of Wages Threat of job

losses
For Employees
Industrial Action
Find
Alternative May cost more
Supplier for product
For the Firm’s Customers
Shortage of Deliveries not made May not be

Product able to
produce goods
Conflict
 Refers to a situation of friction or

 Disagreement between two or more parties
such as employees and employers
 Conflict can cause:
1. Lower productivity –(less focus on tasks)
2. Lower motivation
3. Inappropriate behaviour at work
4. Fuel the internal politics (incompatible
differences) within the organization
5. Hamper opportunities for collaborative teams
Conflict
Should trade unions be unable to

reach an agreement with
employers they may enter into
an industrial dispute. This
may include:
 Collective Bargaining
 Go-slows (slowdowns)
 Work-to-rule
 Overtime bans
 Strike action
Methods used by employer
Collective bargaining
(negotiations)
Threats of redundancies
Changes of contract
Closure
Lock-outs
Sources of Conflict
 Change - this can be driven by either internal

or external factors. Either way, change can
cause stress.
 Not all employees will respond well to new

technology,
 for example. Having employees adapt
poorly to change increases the likelihood of
conflict in the work space.
Sources of Conflict
 Different interests -
 workers, who in certain respects have a lesser
stake in business than managers or the
shareholders, focus on their individual goals,
which may include more flexibility in the
workspace or higher wages.
 Managers sometimes believe that workers do

not sufficiently consider the goals of the
business.
Sources of Conflict
 Different values -
 individuals see the world differently.
 Lack of acceptance and understanding of these

differences can cause conflict.
 Often, workers have a different culture that

differs from that of the management team.
Sources of Conflict
 External factors - any number of external factors
can disrupt the workplace:
 changes in the economic environment can affect
the resources available to the business,
 migration of labour can bring in new workers
unaccustomed to an organization's traditional
culture, and political changes can lead to new
laws/regulations than workers/managers do not
like.
Sources of Conflict
 Insufficient resources - no organization has
unlimited resources.
 Managers must decide how resources are
allocated.
 Frequently, employees think that they have to
compete just to do their jobs.
 Having insufficient resources also touches
employees' pay.
 Conflict often arises when workers or managers
demand more pay.
Sources of Conflict
 Poor communication - sometimes managers
and workers clash because lack of
communication has created misunderstanding.
 Even when managers or workers have tried to

communicate, misunderstandings can occur.
Approaches to conflict resolution
Conciliation/ Help from a third party to resolve a dispute.
Arbitration Arbitrator has power to issue a ruling.
Workers help run the organization; can take many

Employee forms – collective bargaining, workers on board of
participation / directors, workers consulted in decision-making
industrial
democracy
No-strike Trade union agrees not to take industrial action

(strike)
agreement
Allows managers to negotiate with only one
Single-union union. May not be possible in all organizations.
Agreement
Conciliation (mediation) and arbitration
 Conciliation and arbitration are methods of

resolving collective disputes in industrial
relations.
 If the parties to a dispute cannot solve it alone,
they may use the services of an independent
mediator.
 Most countries will have an organisation (often
sponsored or supported by government), which
will act as an independent conciliators and
arbitrator to resolve disputes.
Conciliation
 an independent and impartial outsider discusses

the issues in dispute with the parties involved.
 This is sometimes done separately, sometimes
together, with a view to coming up with a solution
that both can accept.
 If the parties can be persuaded to meet and talk,
they may find a resolution to their dispute.
 Conciliation is voluntary. Sides to the dispute
have to agree to conciliation before it can happen.
 The conciliator has no power to impose a
solution, but aims to assist the parties to reach a
settlement of the dispute.
Arbitration
 the disputing parties agree to the appointment of an
independent arbitrator and accept that the
arbitrator's decision will be final.
 Indeed both parties normally accept that the judgment

is legally binding and sign a contract to that effect.
 The arbitrator acts like a judge, listening to the

arguments from both sides, accepting written and
oral and written evidence and hearing forms of
testimony. The following types of arbitration exist:
 Binding arbitration: This may be part of a disputes
procedure, where the parties have stated that in
the event of a failure to agree, they will appoint an
arbitrator as a means of settling the dispute.
 Compulsory arbitration: This is generally associated

with state involvement in dispute settlement.
 The government may provide that in the case of
disputes in certain essential industries, the parties
may not take any form of industrial action, but
must accept arbitration.
Pendulum arbitration
Here, the arbitrator is restricted to find totally in favour of one of

the disputing parties with no option of finding a compromise.
An essential hypothesis underpinning this form of arbitration is that,

being an "all or nothing" situation, the parties will adopt more
realistic positions, rather than setting out a more extreme
position.
Since the parties should be brought close by this process that

they may prefer to settle rather than be seen to lose at
arbitration. This form of arbitration is most commonly
associated with single union agreements, no-strike
agreements and aspects of flexibility.
Conflict resolution
Refers to the course of action taken to resolve
conflict and differences in opinion
Ways to approach conflict resolution
Conciliation and arbitration
1. Conciliation is a process whereby the parties involved in

a dispute agree to use the services of an independent
mediator. [ Negotiation Compromise Win-Win
Solution]
2. Arbitration is similar to conciliation in that an

external entity is used as part of conflict
resolution. Arbitrator acts like a judge.
Conflict Resolution (Resolving Conflict)
Conciliation is a process whereby

the parties to a dispute use
a conciliator, who meets with the
parties both separately and
together in an attempt to resolve
their differences.
 Arbitration
Both parties agree to an independent person

(an arbitrator – often sponsored by the
government) being appointed to help resolve
the dispute and accept that their decision will
be legally binding.
 Industrial democracy – employees are given

responsibilities and authority to complete tasks
(ie. they have opportunities to be involved in the
decision-making process.
- Employee participation and industrial democracy

help to increase productivity because workers are
more involved so are happier.
 No-strike agreements – members of the

labor union agreeing not to strike as a form of
industrial action.
 Single-union agreements – organization

agreeing to participate in collective
bargaining with a sole trade union that
represents the workers.
Employee participation
 can take many forms:
 Project teams or quality circles in which employees work on projects or
tasks with considerable responsibility being delegated to the team.
 Suggestion schemes where employees are given the opportunity to

suggest new ideas and improvements to managers. In return they may
receive a reward if their suggestion is adopted and the organisation makes
savings. Every year since the 1970s, Toyota has received over a million
suggestions from its employees. Over 80% of these ideas were
implemented.
 Consultation exercises and meetings where employees are encouraged
to share ideas.
 Delegation of responsibility within the organisation.
 Single union agreements
 A single-union agreement gives one trade
union sole bargaining rights in respect of
all employees in an organisation. That trade
union is the only one recognised by the
employer in question. Procedures such as
those relating to discipline and grievance may
also be agreed at the same time and may be
associated with no-strike agreements.
 Single union agreements
 A single union deal offers managerial advantages
in terms of a simplifying collective bargaining
because managers only have to negotiate with
the representatives of a single union.
 It also reduces competition between different

unions, which can result in demarcation disputes,
where unions try to protect their member's jobs
by insisting other union members cannot carry
out the functions associated with the job.
Resolving Conflict
Industrial Tribunals
 These are informal courtrooms

where disputes are overseen by a
Chairperson who will then judge on
the case.
 These usually deal with employee

complaints such as unfair dismissal
or sexual harassment.
 High concern for personal outcome leads
people to compete for a win only outcome.
 High concern for others only means

surrendering (accommodating) which leads to
a win situation for the other party
 Low or no concern for either party's
outcome simply means there is avoidance of
the conflict.
 High concern for the outcome of both

parties leads to collaboration to find a
mutually beneficial solution.
 Moderate concern for the outcome of both
parties leads to some degree of compromise
being made

Reasons for Resistance to Change
 Discomfort - employees are often happy with the

current situation and want to maintain the status
quo.
 Fear - changes often makes employees afraid
simply because they do not know what will
happen.
 Insufficient reward - employees often perceive
that implementing the change requires them to do
more work for no compensation.
 Lack of jobs skills - employees may not have the

skills necessary to perform in the changed work
environment.
 Loss of control - when managers insist on change,
employees feel that they do not have control over
their lives.
 Mistrust - employees sometimes do not trust
managers.
 Poor communication - employees do not know
why the businesa needs to change.
 Poor timing - change is brought about for the needs

of the organization but might occur at a time that, for
either professional or personal reasons, may for
poorly with the needs of employees.
 Poor experience - an employee may have had a bad
experience with change in another organization or at
an earlier time with his or her current employer.
 Social support - an employee who works with a group
of people who resist change may choose to resist for
the sake of maintaining social relationships.
No-Strike Agreements
 Strikes are damaging for both employers and
employees
 These agreements usually involve an
“independent ARBITRATOR”
Employer’s Weapons
Lock Workers Out
Dismiss Workers
Pay Freeze
Effect of
employer actions
 Investigate a recent major industrial dispute;
 E.g. FT: Jaguar Land Rover strike action
 What methods have management used to

resolve the dispute?
 Discuss: What effect has these methods or
pressure tactics had on employees and the
trade union?
Worker Participation
 This occurs
when
employees
contribute and
are involved in
the decision
making in the
business
 Worker Directors
 appointed representative
 usually do not attend board
meetings
 Works Council
 Representatives of workforce meet
 Discuss management proposals
 Feedback on ideas and comments
 Issues may include;
▪ Health and Safety
▪ Introduction of New Machinery
 Quality Circles
 Used by many companies (especially
Japan)
 Encourage continuous development
 Team Working
 Discussions on improvement on how
things are carried out or how the
product is assembled
 Improved feeling of importance and
motivation of employees results
 Democratic Styles of Leadership
 delegation
Major UK organisations involved in
industrial relations
TUC – Trade Union Congress
 Members include full time workers, admin,

economists, solicitors
 Made up representatives from all unions
 More powerful than one union
 Aims are to;
 Act as a pressure group
 Represent trade union views in general
 Influence employer associations
 Influence govt policy
ACAS– Advisory, Counciliation, and
Arbitration Service
Independent organisation
 Financed by the govt
 role is to try and improve industrial relations
 provides services for free
 is impartial (does not take sides)
 both sides must agree on ACAS rulings
The service provides

ACAS– Advisory, Counciliation, and
Arbitration Service
advice and info on all areas of employment
(employer/employee)
 conciliation to find a middle ground where both
parties agree
Arbitration if discussions have reach a deadlock,
and no settlement is near
 independent group listens to both sides
 propose a fair settlement
 both sides must agree & accept arbitrators
findings
Outcomes of Conflict
 Compete – high concern for personal outcome;

win-only outcome
 Surrender – high concern for others; win for the
other party
 Avoidance – low or no concern for either party’s
outcomes
 Collaboration – high concern for the outcome of
both parties
 Compromise – moderate concern for the outcome
of both parties
Resistance to Change
 Reasons why people are resistant to change

in the workplace:
 Self interest takes priority over organizational
objectives
 Lack of security when people are out of their
norms or comfort zone
 Misinformation causes misunderstandings
 Different interpretations of circumstances
Six change approaches
 Education and communication

 Participation and involvement
 Facilitation and support
 Negotiation and agreement
 Manipulation and co-option
 Explicit and implicit coercion
Identify methods (incl. industrial action) a trade
union could use to achieve their objectives:
 Negotiations (collective bargaining power)

 Go-slow (work at minimum pace allowable)
 Work-to-rule (obey rules and do no more at all)
 Overtime bans (especially during peak seasons)
 Strike action (refusal to work by the majority)
 Walk-out (of meeting/workplace as a sign of
protest)
Q2.7.1 on pg. 274 Hoang
a) Public sector refers to the sector of a nation’s economy

which is controlled by central or local government
organisations, including the provision of a range of public
services that benefit society, such as local schools,
hospitals, and police services. Industrial action is a result
of unresolved conflict at work and refers to the collective
activities taken by employees who are dissatisfied by
working conditions or practices, such as strike action or
work-to-rule.
b) A mass scale industrial action could be the result of a

breakdown of negotiations between employers, including
government organisations, and major trade unions that
exercise significant influence. Mass scale may refer to
industrial action that has a nationwide impact, for example
workers of the public postal service going on strike over pay
and working conditions, resulting in delayed deliveries of post
across the country. The economic prospects of a country may
be damaged by mass scale industrial action, where the loss in
b) productivity can have a damaging effect on output. Overall

national output, however, is unlikely to be significantly
affected unless the industrial action is widespread and
sustained, e.g. strike action of several months. Although the
loss in output from limited mass-scale industrial action may be
nominal, the economic prospects of country can be harmed by
the spill-over effects from the action. The publicity
surrounding industrial action may spook consumers and
investors, making them wary of buying or investing in the
country or organisation affected
b) by the action. The perception that a country or organisation

can be held to ransom by powerful trade unions, damaging
output, productivity and profits, can influence investors to
inject their capital elsewhere, draining much needed
investment funds from the economy. Although mass scale
industrial action is unlikely to have a major direct impact on a
nation’s output,
countries also need to count the cost of reputational damage
and customers and investors who defect to competitors as a
result.
a) Closure in the context of industrial disputes means the

ceasing of business operations concerned in the conflict.
Where production or services are halted due to the closure,
productivity and output is lowered. In this case, mines
were closed as protestors caused threats to health and
safety, disrupting mining operations, output, income and
potentially pay.
b) Two alternative methods that BHP Billiton could use
include:
a) Threats of redundancies: BHP could make the case that a
10% pay rise would be unaffordable
and put miners’ jobs at risk. Managers would seek to

strengthen their bargaining power by painting a less attractive
scenario for employees as a result of an unsustainable pay
rise. Fears over job security would soften the miners’ demands
and make them more willing to compromise. However, the
firm’s record breaking annual profits would make the case,
that a 10% pay increase is unaffordable, less convincing.
Employees could easily argue that redundancies are not
required, but savings to cover the cost of the pay increase
found elsewhere, such as reining in excessive director pay or
other operational efficiencies.
b) Another alternative method to protect BHP’s interests is

the use of Public Relations (PR). Ensuring that publicity
surrounding the strikes is favourable to BHP would dampen
support for the industrial action in the minds of customers,
investors and the wider community. Using the media and
regular press releases to portray BHP in a positive light, as
willing to compromise but dealing with a trade union that is
making impossible demands which would seriously damage
the business’ long-term competitiveness, would garner more
support for BHP and less for
b) the miners, thereby strengthening its bargaining position.

Customers, investors, and the wider community can become
weary of industrial action where it negatively impacts them
over time; manipulating public relations through the effective
use of publicity would help BHP to win the minds and support
of these stakeholders, weakening the ability of miners to
make excessive demands on pay. BHP would need to be
conscious, however, that trade unions are seeking similarly
positive publicity for themselves to win support for their
interests and, arguably, rational and reasonable demands.
a) A non-governmental organisation operates in the private

sector, i.e. it is not owned or controlled by the
government. NGOs are not-for-profit organisations and
instead are set up for the benefit of society. Corporate
social responsibility refers to the ethical and environmental
issues of business activity, and a business’ duty to manage
its impacts on society. A business that adopts CSR acts
morally towards all its stakeholders, including employees
and the local community.
b) A perceived lack of corporate social responsibility at

Walmart can cause conflict or friction between the employer
(Walmart management) and employees for various reasons. A
lack of CSR gives the impression that managers are largely
unconcerned about the welfare of staff, and unwilling to do
what is morally right by their employees whilst prioritising the
pursuit of business targets and profits. A lack of CSR might
reveal Walmart to be a socially irresponsible employer; an
employer which does not fully value
b) or recognise the contribution of its employees. This

perceived lack of CSR can manifest itself in friction with
employees over a host of issues, including disagreements on
pay and working conditions. Employees are feeling disgruntled
with Walmart as an employer, and the company’s lack of CSR
means employee views and opinions go unheard, particularly
due to Walmart’s aggressive tactics to shut out trade unions as
representatives. The feeling of staff disillusionment with
Walmart’s CSR practices, or lack of it, can eventually fester,
creating and building major areas of tension between
management and employees.
c) Walmart has sought to resolve conflict with its employees

through several means. Claiming to open channels of
communication, allowing employees to express their views,
indicates a consultative approach before negotiations.
Countering accusations of the Human Rights Watch report and
dismissing them as outdated and misleading is an example of
managing public relations (PR); by using the media to defend
the reputation of Walmart and generate more positive
publicity for the business. Alternative approaches to conflict
resolution include the use of a single-union agreement. Given
that workers at
c) Walmart are relatively low paid and low skilled, and workers
in the retail industry as a whole are, in general, more easily
exploited, it may be unrealistic to expect workers not to join a
labour union. Agreeing to negotiate with a single union
simplifies matters, saving management time and resources
which does not need to be spread among multiple inter-union
disputes. Other appropriate methods include litigation. If
Walmart are fully confident in its assertion that the Human
Rights Watch report is outdated and misleading, bringing a
lawsuit against the HRW may be a worthwhile action to
safeguard and
c) restore the business’ reputation. Should the courts uphold

Walmart’s complaint, public relations (PR) should be improved
as the company’s labour policies would be vindicated (cleared
of blame) by an impartial judge/jury. However, litigation carries
risk and can be a costly procedure to resolve conflict, with no
guarantee that the courts will find in Walmart’s favour.
Bringing the case to court could possibly expose labour
practices which embarrass the firm. A less risky approach for
Walmart could be the use of arbitration. Involving an
independent arbitra-
c) tor could be beneficial, as this independent adjudicator

assesses the case of both management and employee
representatives before putting forward a legally binding
recommendation. Although management will have less
control over the course of action taken, which is determined
by the arbitrator, conflict is mitigated as the arbitrator’s
solution will be perceived as more fair by employees, and
therefore more likely to win the support and ‘buy-in’ of
employees.
Employment Law – Individual labour law
 Looks at the rights and responsibilities of individuals:

 Equal Pay Act 1970 – both sexes treated equally re: pay
 Sex Discrimination Act, 1974 – cant discriminate on grounds of
sex or marital status
 Race Relations Act, 1976 - cant discriminate in relation to colour,
race, nationality or ethnic origin
 Disability Discrimination Act, 1994 – cant discriminate due to
disability
 Working Time Regulations, 1998 – this sets a limit on the number
of hours worked per week
CUEGIS links??
Change
Culture
Ethics
Globalization
Innovation
Strategy

Class Employer - and - Employee - Relations

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Employer and Employee Relations

Examine the methods used by

Why is Good employer

 Many positive results arise

Managers strive to ensure that

Extreme actions taken by the

Employee and employer

Collective bargaining occurs when workers

 Theprocess of settling matters

 Therefore agreements are made between

 Employees may be able to put pressure on

 It is rare in any negotiation for either side to put

 Similarly, trade unions are likely to ask for large

 Both sides may be prepared to compromise and

 A win-win outcome for all involved.

A union is there to help employees to achieve improvements in

Is a type of pressure group

 Theseorganizations are pressure groups

are on strike in Wisconsin,

For an annual fee that

 Giving legal advice

 Workers of common skill.

 Manual labor such as factory workers.

 Professional workers such as bankers and

3. Industrial unions representing mainly workers in one

4. Professional or white-collar unions skilled workers in mainly

E.g. NUT (teachers' union).

 A Single-Union Agreement is where a firm

Regional offices Regional offices Regional offices Regional offices

Branch Branch Branch Branch Branch Branch Branch Branch

Similar groups exist for

 Offer technical support

Employee-Employer Relations refers to the

Bargaining is the process of negotiation

 The different action employees and

 It is a common practice for employers to

 However, whatever action is threatened,

 Employers may not renew contracts unless

 The threat may be one the management are

 The employers prevent the employees from entering the

 In effect, it is a strike by the management to compel a

 The lock-out means that employees may not receive any

 Employees fully withdraw their labour and

 An All Out Strike

 Strictly, Rigidly follow

 Work often slows

 Workers paid normally

 In essence, they adhere to all the rules and

There may be several checks that should be

All these checks may take a long time ad

 This will also reduce productivity and therefore

 Similar to “work to rule”

 Workers do jobs more slowly

 Deliberately take longer to

 Employees deliberately use strategies to

 They may do this in a number of ways, such

They would refuse to

 workers refuse to do overtime.

Loss of Output Loss of

Poor Cash Flow

Loss of Wages Threat of job

For the Firm’s Customers

Shortage of Deliveries not made May not be