2.7 Industrial/
Employee
Relations
HL ONLY
IB Guide Connections
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Sources of conflict
in the workplace
What causes conflict?
Discussion

What are industrial relations? What will we be studying
this unit?

The relations between management and workers in
business or industry.

In pairs, think of FIVE sources of conflict in the workplace
between employees and the management/owners that
might cause poor industrial relations.
Key
Word
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Sources of Conflict
Disputes over pay- workers
seek to increase wages while
businesses want to maximize
profit.
Poor management- this
includes poor communication,
inadequate leadership styles,
or failure to recognize unions
Disputes over working
conditions- this includes hours
working, holidays, benefits,
safety, etc.
Poor performance- when the
business is not doing well,
managers may push workers
harder while workers fear
redundancies
Internal or external changethis could include new
technology, leadership styles
or increased competition
Different interests/valuesEmployees see their job
differently and may not work
like management wants
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Identify the source of conflict
Read the scenarios below and identify what is causing the conflicts in
the business.
The managers of a
manufacturing business are
worried about new foreign
competitors entering the
market and offering their
products at a cheaper price. To
respond, the business is bringing
in new machines to increase
productivity. Workers were not
told about them change and
found new machines in the
factory after a long weekend.
The workers are worried and
angry about the change.
The video game business has
been doing extremely well after
releasing the top game of the
year. They got a lot of good
review from top gamers. Profits
have increased 25% over last
year. Instead of celebrating the
win, managers are pushing the
developers to create the next
great game. Workers are
frustrated that they have not
received any extra
compensation from this success
and think the new workload is
unbearable.
A new restaurant has just
opened and the response from
the public has been great.
Everyone wants a reservation.
However, they only take the
top trained waitstaff and they
are having trouble finding
employees. That means that
workers are working 12 hours a
day 5-6 days a week. Also, the
air conditioning in the kitchen is
broken and kitchen staff are
suffering. They said if it is not
fixed soon, they will quit.
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ANSWERS
Answers will vary, but some ideas are listed below.
There are so many things going
on here. There is an external
change in competition which is
causing problems in the
business. Also, there is internal
change with the new
technology, which some
employees may not like or be
worried it will replace them.
Furthermore, there is poor
management because there
was no communication about
the new machines.
Students could mention a few
ideas here. First, the
values/interests might be
different. The managers want
to put out another great game
while workers want to
celebrate the great game that
they just finished. It might also
be a dispute over working
conditions. They don’t want to
work so hard and believe that
they should receive some of
the profits or some other
benefits.
The most obvious thing to
mention here is the working
conditions. Working so many
hours and in a place that is so
hot is not good for workers.
They could also argue poor
management because they
can’t get good workers or the
air conditioner fixed, which is a
management issue. Better
management could hopefully
solve these issues quicker for
the same of their workers.
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Approaches to
conflict in the
workplace
Actions by employees and
employers to deal with conflict
Approaches to conflict
In this chapter, we will look at approaches that both employees and
employers can take to settle disputes.
• Collective
bargaining
• Work-to-rule
• Strike action
• Collective bargaining
• Threat of
redundancies
• Changes of contract
• Lockouts and closures
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Understanding unions
To understand labor relations, it is important to understand what a
union is and how they work.

Do you know what a trade union is? How does this relate to
conflicts in the workplace?

Watch this video about unions and discuss the importance of
unions and their drawbacks.
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10
Minutes
Activity
Note to teachers: Depending on
group size, you may need multiple
papers/board space to make sure
students can participate.
Prep: Place two large pieces of paper around the room or divide the board
in two parts. One paper/space is pro union and the other paper/space is
against unions.
1. Spend 10 minutes researching pros and cons of unions individually. Look
at general ideas and specific examples of good and bad union actions
2. Now, one by one, go up to the board/paper, read what others have
written, write down one of your ideas or add to what was said. Make
sure to add to each side of the debate. DO NOT repeat something that
is already there.
3. Read the ideas out loud and compare talk about each idea.
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Extended activity
Note to teachers: This activity is topical in 2023, so could be good for discussion.
However, this may become outdated. As this is an extended activity, you can choose to
skip it or find another example that is more relevant.
Workers in Amazon warehouses in the U.S. want to
unionize, but it has not been an easy battle. It has
taken years of time and effort to organize.
Amazon union
logo
Research the topic and write a small report about
what has happened, where the efforts are currently
and your opinion on the topic. Why is Amazon
against unions? Is unionization good for consumers?
Add any other thoughts you have on the topic.
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Actions of employees
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Key
Word
Collective bargaining
Negotiation between employers and representatives of employees,
usually union officials. Because this agreement is collective, it applies to
all employees that are part of the trade union. This is both for
employees and employers.
They usually negotiate salaries, holidays, working hours, and
pensions.
This is helpful when they have a high number of employees in
the trade union or they have a very good case against the
business for example if the wage or conditions are far below
others in the industry.
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Key
Word
Work-to-rule
Employees refuse to do anything that is not specifically stated in their
contract. This will slow or stop the production on the job. What does
this accomplish? How could teachers use work to rule?
This will cause production to slow and customers orders may
be delayed, which will cause issues for the company.
This is not very disruptive, but it will not cause disciplinary
action against the worker and they will still be paid while
they do it. This started in places where striking is
illegal/regulated.
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Key
Word
Strike action
A situation in which a group of workers refuse to work because they
are not satisfied with their pay, working conditions, etc.
This is the most drastic form of industrial action, but it has consequences
for both sides. Workers stop completely, so little to no work is being done
in the business. Customers may find alternatives.
But, workers will not be paid, which can hurt them financially. Also, the
business might lose clients and cause the business to be unstable in the
future.
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Real-life
Business
Spotlight
Find ONE example a strike that has affected a
business in your country or one that you know
about. What were the workers striking about? How
was the conflict resolved? What was the public
opinion about the strike? Were they for the
workers or the business? You may want to check
out this website to see places where the right to
strike was violated to get some ideas. Make sure
you research a strike that has happened in the last
two years. Write a 4-5 sentence summary on the
strike.
Change:
The modification of a
business, its
products, service or
goals over time due
to internal or
external factors
Key
Concepts
If employees decide to go on strike,
businesses must make some changes to
continue operating.
Using a different strike than you
researched previously, report on TWO
changes that a business had to make
after workers went to strike: ie. what
did they agree to to end the strike?
Actions of employers
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Key
Word
Collective bargaining
Negotiation between employers and representatives of employees,
usually union officials. This is both for employees and employers.
This is good for a business when they have used this tactic
successfully in the past. Also useful when the workers are not
united or do not have high union participation.
Businesses may play with bargaining deadlines to force decisions
or slow down talks to reduce emotions.
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Key
Word
Threats of redundancies
Threatening employees with losing their job so that they settle for less
favorable working conditions.
Redundancies are legal reasons to dismiss workers, so this can be difficult
to prove. This can make the tactic hard to use and employees may see
through this plan.
Also, this can cause bad feelings between employees and employers that is
hard to solve once the threat has been made. What would some
motivational theorists say about this?
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Key
Word
Changes of contract
Changing the working conditions, pay, or responsibilities set out in the
contract.
This is difficult to do in many countries. But some places try to use
the practice called “fire and rehire” where they fire workers to
rehire them with different conditions.
If the laws are strong for employees, this can be an empty threat
and legal action could cost the company more money than it is
worth.
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Key
Word
Lockouts and closures
Closing the businesses temporarily (lockout) or permanently (closure).
Lockouts cause financial hardships to the employees and businesses
hope that this will help workers come to an agreement that is
suitable to both parties. This is very risky as it can worsen relations
with employees.
Closures happen when the conflict has been unresolved for a long
period of time and agreeing to the demands will make the business
go bankrupt.
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Approaches to
conflict resolution
How businesses resolve conflicts
with employees
Conciliation and arbitration
Key
Word
Conciliation: a neutral third party offers ideas and unbiased
actions to help both parties to come to an agreement. The idea
is that the agreement is fair to both sides.
Key
Word
Arbitration: this is very similar to conciliation, but in this case,
the arbitrator has the authority to settle the dispute and usually
this is legally binding meaning the employees and the
employers must adhere to the agreement.
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Key
Word
No-Strike agreement
This is a deal between employers and trade unions that
workers will no strike during a certain period of time in
exchange for better conditions in the collective bargaining
agreement.
Do you think this is more beneficial to employees or
employers?
This shows workers that unions are not argumentative, which
can increase their membership. This can also improve the
public perception of the union as they seem reasonable and
willing to negotiate. But, the business has to agree to certain
conditions if employees agree not to strike.
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Key
Word
Single Union agreement
Workers agree to be represented by only one union. This
allows for easier negotiations and fewer disputes between
rival unions. This also improves communication between
employers and employees. Do you really think this helps
avoid conflicts? Why or why not?
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Key
Word
Employee participation/
Industrial democracy
Employees are involved in the decision making process of
the business. This allows employees to feel more involved
and valued increasing their satisfaction.
Businesses can do this by introducing:
• Quality circles (Unit 5.3)
• Work councils
• Employee share ownership (2.4)
• Teamworking (2.4)
What would the following theorists say about these types
of programs: Maslow, Herzberg, and Deci & Ryan
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Case study
practice
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Helen Buguli Hospital
Helen Buguli Hospital (HBH) was founded in 1970 and has a reputation of helping
some of poorest people in Brussels. It does not seek payment and receives most of
the money to operate from the government and a few of its paying patients. But,
the government has reduced healthcare spending and conditions in the hospital are
getting worse. Nurse are receiving late payments and haven’t received a raise in
over 5 years. In addition, the hospital is bringing in inexperienced, new graduates to
help in some positions to save some money. Finally, nurses are working overtime
due to staffing issues.
Nurses are very unhappy and have threated to go on strike. The hospital has asked
them to sign a no-strike agreement so that patients do not suffer. However, many
in the union believe that they will not get what they want without some drastic
action and a strike will bring national attention to the issue. There are only five days
left until the workers go on strike and the hospital knows that they need to do
something to deal with these issues.
a. Define the term no-strike agreement.
(2)
b. Describe two sources of conflict happened at HBH right now.
(2)
c. Discuss two approaches the employer (HBH) can take to deal with the
current conflict.
(10)
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Markscheme
a. A no strike agreement is when the union promises that during the life of the
contract the employees will not engage in strikes. They do this in exchange for
better conditions in collective bargaining/arbitration.
Award one mark for saying that employees will not strike and another mark for
saying that it is in exchange for better conditions.
b. One source of conflict is bad conditions. The workers are working with
untrained people and have to work overtime due to staffing issues. Another
source is the bad pay and no raises in over five years. Students could also say
that external changes are causing issues since the government is reducing
spending.
Mark as 2 + 2. One mark for identifying a source and one mark explaining it in
context.
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Markscheme
c. HBH has different options like conciliation, arbitration, lockout/closure, threatening
redundancies or change of contract. Students can use conciliation and arbitration as
two different ideas as long as they show the difference between the two of them.
Lockout/closure does not seem like a good option since it is a hospital and they have
to provide the service to the sick people in the city. Threatening redundancies could
be a good idea because they have been bringing in new graduates who could
maybe take on more work. They could also argue that there is less money so
redundancies need to be made. Change of contract might be an option, but there is
not a lot of application for this. This is mostly theoretical.
Students also need to question the information given with things like how many
nurses are affected, how many unions there are, could patients be transferred to
other places if a strike happened, etc.
Use the markscheme to award marks according to the IB Guide.
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IB Guide Connections
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References:
Textbooks references:
Lomine, L., Muchena, M., & Pierce, R. A. (2022). Oxford IB
Diploma Programme: Business Management Course Book
(1st ed.). Oxford University Press.
Surridge, M., & Gillespie, A. (2022). Business Management
for the IB Diploma. Hodder Education.
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