employment relations - notes

8/4/2019 Employment Relations - NOTES

http://slidepdf.com/reader/full/employment-relations-notes 1/14

S h a n e D a l y P a g e | 1

Business Studies – Employment Relations

Employment Relations (ER)The nature of ER

Employment relations (ER) Refers to the total relationship between an employer and employee which

incorporates all the issues in the workplace including recruitment, training and

development.

Sees an employee as an asset that adds value to the business rather than a cost and

encourages open communication and goal orientation.

Includes: planning HR, acquiring people with the right skills, training & development

and performance mgt.

ER = HR(human) + IR(legal/contract)

Industrial relations (IR)

The relationship between mgt and labour, and the processes for negotiating

employment conditions

Stakeholders in the ER process

Employers

Provide work for employees

Critical part of initialising ER

Responsible for working conditions of employees

Objectives: Increase profit, minimise costs to be competitive, expand business

Employees

An individual that provides their skills to a business for income

Very important for business’s survival, growth, profitability, quality, competitiveness.

Objectives: better wages and working conditions, meaningful jobs, job security,

participation in decisions

Employer associations

Organisations that support employers by formulating policies/ strategies, dealingwith employee unions, negotiation and employment contracts.

Unions

Organisations that aim to support the interest of employees in the workplace

Less evident now due to change of laws

Government organisations

Most influential stakeholder

Establishes legal framework in which all other stakeholders must abide by in

relations to ER

Fair Work Australia (FWA) (2009)

o Replaced the Workplace Relations act (1996)





o Ensures a safety net of minimum conditions, facilitates the making of

enterprise agreements, regulates industrial actions, and resolves collective/

individual workplace disputes through conciliation, mediation and in some

cases arbitration.

Fair Work Ombudsmano Investigates workplace complaints and enforces compliance with Aus.

workplace laws

Managing the ER function

Has become more complex due to workers’ rights and phycology developments

Includes: Human resource planning, recruitment, identification/ selection of

competent employees, orientation, training employees with up-to-date knowledge,

performance appraisal and career development

The way these functions are carried out depends on biz culture, goals, technology,

size etc.

Line managers

In charge of other employees with focus on managing staff to contribute to the

prime function of the biz

Take care of routine employment matters such as recruitment, wages, training and

other functions.

Specialist ER/HR manager

Undertakes a strategic role at the top level of biz that provides the vision and overall

ER strategies. Provides expert assistance to line managers on ER matters such as recruitment and

selection, and negotiation

Usually only large biz’s have these as they are usually in the HR department

Key influences on ER

Social influences

Changing work patterns

Increase of female participation

Casualization of workforce - trend in part-time work Increase use of contract labour and agency workers

Increase in white collar work (sales, professionals) and decrease in blue collar work

(labourers, trades people)

Well educated workforce = want challenging work and increased responsibility

Growth of outsourcing

Population shifts

Ageing pop = increased jobs in age care

Legal influencesContacts between stakeholders (mainly employees and employers)





Awards (centralised)

o Formal agreements that cover workers in a whole industry

o Provide workers with a safety net of 10 national employment standards

Certified agreements (decentralised)

o Made collectively but only in a specific workplace Aus. Workplace agreements (very decentralised)

o Negotiated individually

Legislation

Anti-discrimination legislation

o Prohibits workplace discrimination e.g. gender, ethnicity, disability etc.

OH + S Act 2000 (NSW)

Workers Compensation Act 1926 (NSW)

New organisational behavioural influences

Flat mgt and team structures

ER function focuses on staff training and development, the individual and team,

career development, intrinsic rewards.

Employees have a greater role in the direction of biz and working conditions

Team building – discussion/ direction from mgt, shared sense of purpose,

commitment, stability, trust, open communication, ongoing training and recognition

Includes job enlargement, job rotation and job enrichment

Economic influences

Economic cycle

Demand for labour determined by demand for goods and services in the economy

Change in taxation affects cash flow

Bust = less bargaining power for employees

Boom = more bargaining power for employees

Globalisation

Results in greater choice and lower prices for consumers

Some Aus. Biz’s struggle to compete due to Aus. work practises (multi-skilling,

flexible working hours) that affect efficiency and productivity Lead to an increase in multicultural workforce which challenges ER mgt

Effective ER

Role of ER

To manage the relationship between employer and employees effectively in order to

develop competent, flexible and productive employees committed to biz’s function

The coordination of line manager, ER manager and sometimes external consultants

Analysing the internal (goals, costs, stability) and the external (economic conditions,

competition, social, legal) environment constantly Recruitment, selection and placement





o Recruitment (locating + attracting the right quantity + quality staff at right $)

o Selection (screening + sifting process (gathering info))

o Placement (putting employee in relevant position that utilises their skills)

o Training and development (offering opportunities e.g. TAFE)

o Rewards mgt (monetary/ non-monetary)o Conflict resolution, mgt of agreements

o Legal compliance

o Separation

Good ER = increased productivity + reliability of

employees

Good ER = Right people -> Right time -> Right skills

Communications systems Allows worker input into the decision making process

E.g. emails, performance appraisals, interviews, social functions and formal

discussions

Grievance procedures

Series of steps which set out the process to be followed in the event of a dispute

arising in the workplace.

Aim – to bring about a quick, effective and negotiated end to any issue.

Awards also set out formal grievance procedures.

Worker participation

Empowers employees and improves quality, productivity and efficiency

Can occur through:

o Joint consultative committees – groups of employees + mgt + sometimes

unions that provide mgt with views of employees

o Task forces

o Employee representatives on boards of mgt/ directors

o Make business reports available to employees for discussion

Team briefings Meetings between employees and mgt where discussion can take place

Can occur through:

o Quality circles = voluntary – resolves specific problems by reporting to mgt

Rewards

Attracts, motivates and retains employees

Intrinsic

Those that the individual derives from the task or job itself such as a sense of

achievement

Extrinsic





Rewards given outside the job itself, they may be monetary or non-monetary

Monetary = direct financial value such as a bonus or pay rise

Non-monetary = Rewards such as employee satisfaction, decision making power and

autonomy in the workplace

Training and development Aims to seek a long term change and development of employees skills, knowledge

and attitudes that ultimately leads to better performance

Important for promotion and career development within organisation

On the job training = Job rotation, apprenticing, coaching, mentoring

Off the job training = lectures, simulation exercises, conferences, apprenticeship

Interpersonal skills training = Listening, communicating, problem solving

Induction

The training of new employees when they start their employment; helps increase anemployee’s commitment to the business and thus reduce turnover.

Induction programs:

o Give employees a positive attitude and confidence to the job and the firm

o Inform the major safety policies, procedures and their application

o Help establish good working relationships with co-workers and managers.

Flexible working conditions

Reasons for needing this include:

Increasing number of women, and an increasingly multicultural population

Diversity of family structures; changing role of men and women

Aging population

Flexible working hours

Allow employees to work an agreed number of hours over a set period of time. To

function effectively, businesses must structure each day with a common core.

Flexible leave agreements

Allow workers to care for family members in case of emergencies, illness and school

holidays; includes time off in lieu, use of annual leave and career breaks.

Family friendly programs Benefits:

o Increased productivity, morale, commitment, staff retention and ability to

attract new workers

o Decreased absenteeism, lateness and stress

Programs include:

o Flexible working arrangements, family support, childcare, leave, job sharing,

career breaks, home-based work, permanent part-time work.

Measures of effectiveness

Levels of staff turnover





The rate at which employees leave an organisation

Can be voluntary (resignation) or non-voluntary (dismissal)

Very costly for business as new employees need to be recruited

Absenteeism

Indicator of overall moral and job satisfaction Increases labour costs, reduces productivity, stresses other employees

Disputation

The withdrawal from work by employees who are not happy about something.

Stop-work meetings, overtime bans, work to rule, go slows and strikes.

Generally about management policy, working conditions, pay issues, union rights

Quality

Good quality products/ services saves money

Can be measured and quantified by the number of sales returns

Benchmarking

Involves measuring the organisation’s own practices against a set of other standards.

Areas that can be benchmarked include: levels of customer service, number of

warranty claims, labour productivity.

Legal framework of employment

The employment contract

An employment contract is a legally binding, formal agreement between employer

and employee.

Responsibility of employers Responsibility of employees

Provide a safe and healthy work environment Work with due care and diligence

Pay wages Follow reasonable orders/ directions

Engage in discrimination free practises Act in good faith

Repay expenses Protect trade secrets

ER in the workplace is governed by:

o Common law

o Statues – federal and state legislation

o Awards and agreements – determined by industrial tribunals

Common law

Sets the minimum standards of an employment relationship.

Determines wages and working conditions

Statutes

Fair Work Act 2009

o New, modern awards that contain a safety net of 10 national employment

standards (NES)

o No-disadvantage test

Fair Work Ombudsmano Ensures compliance with act





o Persecutes breaches

o Monitors/ inspects complaints

Awards

Legally enforceable documents made by industrial tribunals that set out the

minimum wages and conditions in a whole industry or enterprise Cover matters of pay rates, overtime rates, and hours of work, sick leave and annual

leave.

Binding on employers, they generally remain in force unless they are varied or

cancelled; industrial tribunals have the power to increase minimum wages or change

certain conditions of employment.

Can operate alongside agreements, or be replaced by them.

Agreements

Informal:

o Oral or written agreements that are not registered or approved by any

authority or tribunal.

o Cannot take priority over terms/ conditions set out in an award or formal

agreement.

o Employee covered can take legal action under common law if there is a

breach.

Formal:

o Written agreements made under legislation and are lodged with an authority

such as Fair Work Australia or the Employment Advocate for registration or

approval.

o Under the Fair Work Act, employees can make enterprise agreements or

ITEAs.

Types of employment contracts

Permanent

Continuing contract of employment of unspecified duration

Required to work a certain number of hours per week.

Termination involves a period of notice as specified in the award, agreement or

legislation.Fixed-term

Employed to work on specific project/ replace employees who are absent on long-

service or maternity leave.

Employee has right to sue employer if the contract is terminated before the expiry

date.

Excluded from Federal unfair dismissal provisions.

Part time

Contract the same as permanent but with less hours





Conditions for part-time workers are generally on a pro rata basis. E.g. work 3 out of

5 days; entitled to 3/5th of annual leave

Trend for this employment increasing in Aust.

Casual

Usually hired for short-term, irregular or seasonal work. No access to permanent employment entitlements.

Gain some entitlements if hired regularly over 12 months (unfair dismissal)

High proportion of young students and females

Flexible employment conditions

Common feature in contracts

Allows for job sharing

Allows businesses to operate more intense shifts at peak times and allow longer

holidays during slow times.

Industrial conflict

Definition and Causes

Definition:

A withdrawal from work by a group of employees, or a refusal by an employer to

allow workers to work.

Causes

Wage demands

o Demand by employees for an increase in their wage rate or changes to the

way in which their wages are calculated or determined.

o Awards set minimum standards; employers/ employees being encouraged to

negotiate such matters.

Working conditions

o Refers to the organisational environment of the workplace including hours,

amenities and the physical environment

Management policy

o Includes matters of terms/ conditions of employment, new awards/

agreements, promotion, disciplinary matters and disagreement withmanagerial decisions.

Political goals and social issues

Perspectives on conflict

Unitary view:

Assumes all employees within the business share the goals of the business as defined

by senior management. This view likens the business to a team or unit.

Pluralist view:





Organisations are made of many parts and have a number of different stakeholders;

as a result, not everyone will share identical interests. Conflict is expected; managers

are challenged to develop an effective system to resolve it.

Radical view:

Focuses on the imbalance of power between employers and employees.Traditional view:

Conflict had a negative impact on businesses. It was associated with violence and

harm. Management had responsibility to rid the organisation of conflict.

Human relations view:

Conflict was a natural and inevitable occurrence; it cannot be eliminated, thus it

must be accepted and there are times when it may benefit the organisation.

Types of industrial action

Overt action

Lockouts

o Workers are not permitted to enter the workplace unless they agree to

follow management orders or work as directed.

Pickets

o Striking workers prevent entry into the workplace.

Strikes

o Employees withdraw their labour in order to enforce a demand or express a

grievance.

o More frequent in large enterprises; tend to have higher rates of unionism. Bans

o Employees work their required number of ordinary hours but refuse to work

any extra overtime hours.

o Aims to promote employee demands by restricting output from their

workplace.

Work to rule

o Union members work to the strict letter of any agreements or awards,

refusing to do any extra duties.

o Results in reduction of output and production disruption.Covert action

Absenteeism

o The percentage of employees, on an average day, who are away from work

or on sick leave without leave being approved in advance.

o Hard to distinguish genuine absence from a voluntary absence.

Sabotage

o Deliberate damaging of machinery and deliberate interference with products,

systems and procedures.

Labour turnover



S h a n e D a l y P a g e |

10


o Caused by voluntary resignations; indication of employee dissatisfaction.

Exclusion from decision-making in business

o Conflict arising when employees believe they have not been given the

opportunity to have their say.

o Managers/ professionals more likely to be consulted than labourers/ sales

workers.

Roles of stakeholders in resolving disputes

5 key stakeholders:

Employees:

o Discussions/meetings may be held

o If dispute is a more serious nature, employees may seek trade unions

assistance and support

Employers:o Like employees the employers role depends on the nature of the dispute,

depends on management style e.g. behaviour/classic

o Trend towards using line managers to resolve disputes

Unions:

o Represent the interest of their members.

o Seek to negotiate a settlement with the employer

o Can refer dispute to the FWA ombudsman

Employer Associations:

o Main objectives is to assist with the needs/concerns of employers Government:

o Provide the institutions, policy and legislative framework for the resolution of

conflict

o Investigate breaches of legislation

Dispute resolution process




11


Grievance procedures

A formal process to be followed once a conflict arises to ensure fairness

Encouraged by FWA (previously AIRC) for preventing and settling industrial disputes.

1. Grievance discussed by employee and supervisor.

2. Negotiation

3. Mediation

4. Conciliation

5. Arbitration

Negotiation

Negotiation is a method of resolving disputes when discussions between parties

result in a compromise

A discussion between the parties concerned to try to mutually resolve a dispute,without intervention or assistance of authorities.

Union may become involved if direct worker-management negotiations fail to

resolve the issue.

Collective bargaining

o Negotiation between a union and management/ employer.

o Union officials act on behalf of workers.

o Representative from employer association likely to act on behalf of

management.

Employees/ employers increasingly encouraged to negotiate workplace agreementsto assist in dispute resolution.

Dispute arises

Grievance procedure

Mediation

Concilation

Arbitration

Business closure

Dispute

resolved

Common law

action




12


Mediation

Voluntary negotiation process where a neutral third person assists the parties to

resolve their dispute.

Third party does not act on state or federal legislation.

Conciliation

Formal type of mediation where a third party, experienced in the area of the biz,

makes suggestions to assist in a resolution.

Either party informs the industrial registrar of dispute, and requests FWA to call a

compulsory hearing.

Arbitration

Formal judge like process – Parties in dispute present their views to an arbitrator.

Arbitrator = evaluates the arguments of both parties and comes to a legally binding

decision.

Ratification

Once resolved – solution sent to the relevant authority for official recognition (FWA)

Common law action

If practises are illegal parties affected can sue for recovery costs, losses and damages

Include these matters:

o Breach of duty of care

o Vicarious liability (actions of employee make employer liable of tort)

o Breach of contract

If breach concerns a tort (civil wrong), legal action results in compensation. If breach concerns a contract, legal action results in common law remedy of

damages.

Business/ division closure

Disputes cost money in lost working time and legal expenses.

Costs and benefits of industrial conflict

Types Benefits of industrial conflict Costs of industrial conflict

Financial - Increases empowerment = Increased

productivity, fewer disputes, reduced

absenteeism and labour turnover

- Cost cutting measures = conflict but can

ensure a firms competitiveness and survival

- Lost production & sales = affects firms

incomes and debt

- Reputation may be damaged

- Relocation or closure of biz

- Legal representation and fines imposed =

financial burden

Personal - Helps workers gain mgt attention on major

issues that have caused dissatisfaction and

stress

- Better work place relations = clearer

understanding

- Stress created by more work and lots of

changes due to restructuring

- Rumours/ threats of downsizing = fear,

insecurity, absenteeism

Social - Employee and community welfare can be

enhanced in changed work practises- Intro of multiskilling, career paths benefit

- Community bitterness can be directed at

particular stakeholders if disputes affectthe general public




13


individuals and society

- OH&S problems can be reduced

- Demonstrations can affect/ disrupt

communities

Political - Gov. may be encouraged to change

policies in response to the conflict

- Disputes draw public attention for theneed to protect workers entitlements

- Entire industries may be restructured to

improve economy

- Frequent, disruptive conflict = impact

policies particularly around elections,

affect national income, affect economicgrowth

- Bitterness between unions and Gov. =

political conflict = large scale civil unrest

International - Changes to work practises = may improve

a biz’s international competitiveness

- may present opportunities for

international expansion

- Loss of export income and mkts = after

long periods of conflict

- Nations reputation for stability = lost =

overseas investors become uncertain

Ethical and legal aspects

Issues in the workplace

Introduction

A wide range of ER issues arise in the workplace and, if they are not handles in an

ethical, legal or socially responsible manner, they can lead to poor morale, low

productivity, heavy costs and industrial disputes

Ethical business practises = those practises that are socially responsible, morally

right, honourable and fair.

Ethical framework = may include ensuring equity in the workplace, legal compliance

and commitment to customers. Framework includes:

o A code of conduct = A statement of acceptable and unacceptable behaviours

in a biz

o A code of ethics = A statement of a firms values and principles

o Best practise = Biz practises that are regarded as the best or of the highest

standard in the industry

Working conditions

An ethical employer can be expected to achieve safe and fair working conditions that

improve the welfare of employees. This is achieved through:

o Compliance with industrial legislation including OH&S, anti-discrimination

and equity in all aspects of the employment relationship

o Providing a safe and healthy working environment

o Creating challenging, interesting and meaningful work

o Improving communication, and fostering teamwork and empowerment of

staff

OH&S

Growing worker and community awareness of safety, along with increasing

compensation costs = prompted Gov. to improve workplace OH&S.

Employers are responsible for providing a safe and healthy working environment




14


Workers compensation

Workers compensation = provides a range of benefits to an employee (and family)

suffering from an injury or disease related to their work.

Anti-discrimination

Ensures that no practise disadvantages a person or group because of a personal

characteristic which is irrelevant to the performance of work

Equal employment opportunities (EEO)

Refers to equitable practises in recruitment and selection

Unfair dismissal

Occurs when dismissal was harsh, unjust or unconscionable

Reinstatement = returning employee to their old job

Compensation = payment to employee not exceeding 6 months wages

employment relations - notes

Documents