Effective Employer
-Employee Relations
A2 Business Studies
Aims and Objectives
Aim:
• Understand the role of trade unions
Objectives:
• Define trade unions
• Explain the relationship between trade unions and
employers
• Analyse how the power of trade unions has changed
• Evaluate the effects of trade unions on stakeholders
• Hard and Soft HRM
• Creating a flexible workforce
• Centralisation and Decentralisation
Employee Representation
Employee representation or
participating arises when
employees are part of a formal
structure for involving them in
the decision-making process of an
organisation.
Employee Representation
The law requires a business to consult with
employees on things such as:
• Redundancy programmes
• When employees are transferred from one
employer to another (e.g. the sale of the business)
• On changes to pension arrangements
• Proposed changes to working time arrangements
Employee Representation Reasons
Businesses should have a form of employee
representation to:
• Make employees' views known to management
• Help strengthen both management's and employees'
understanding of workplace issues and other matters
affecting the business
• Help create an atmosphere of mutual trust between
employees and management and therefore improve
workplace relations
AN: Employer Representation to
Business
Advantages
Disadvantages
• Increased empowerment
and motivation of
workforce.
• Employees become
more committed to
achieving objectives.
• Better decision making.
• Lower risk of industrial
disputes.
• Time consuming –
potentially slows decision
making.
• Conflicts between employer
and employee interests may
block essential changes.
• Managers may feel their
authority is undermined.
Trade Unions
Trade unions are organisations of workers that seek
through collective bargaining with employers to:
• Protect and improve the real incomes of their
members
• Provide or improve job security
• Protect workers against unfair dismissal and other
issues relating to employment legislation
• Lobby for better working conditions
Trade Unions Vs Firms?
Conflict
Partnership
• Interests of firms and trade
unions are conflicting.
• The success of the firm is in
the interests of both
parties.
• A profitable firm is more
likely to generate jobs and
pay it’s workers well.
• If workers receive better
pay and working conditions
their morale may increase,
leading to increased
productivity for the firm.
• Higher wages for workers
mean higher costs and
lower profits for the firm.
• Union activity may then be
seen as damaging to both
the firm and the economy,
reducing supply.
Benefits to Firms of Trade Unions
• Negotiating with trade unions (ideally a single union) saves time
and cost rather than dealing with all employees individually
• Unions are part of the communication process between the
business and employees
• Employee morale and motivation may be improved if they know
that their interests are being protected by a union
• The trade union can be a supportive partner in helping a
business undergo significant change
Trade Unions
In the UK there has been a long term decline in union
membership.
• In 2008, only 28% of people in a job in the UK were
members of a trade union.
• That percentage is much lower in the private sector
where less than one in six employees is in a union.
• Unionisation is much higher in the public sector – at
over 50%.
• http://www.youtube.com/watch?v=3UJW_KrmSn0
• 4.30
Trade Unions
Trade Unions
What reasons may there
be for a steep decline in
Trade Union membership
since the 1980s?
Trade Unions
• Decline in employment in manufacturing (where union membership is
traditionally strong) and an increase in employment in the service sector
where unions are less well established
• Growth in the number of small firms which tend not to recognise (or
need) trade unions
• Significant growth in flexible working (part-time, temporary, seasonal) –
where employees see less need for union protection
• Improved employee involvement in the workplace – so less perceived
need for collective bargaining
EV: Trade Unions
Under UK law employers must recognise a trade union
in pay and employment discussions when a majority of
the workforce want to be represented and has voted for
it. But there is little evidence that union members
secure any significant wage “mark-up” or greater job
protection than people in non-union jobs.
• Are trade unions a good thing for employers?
• Are trade unions a good thing for employees?