Employee Relations

A Practical Introduction

Elizabeth Aylott

• Publisher: Kogan Page
• Year: 2022
• ISBN:
  9781398604919
• Edition: 3
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

The third edition of Employee Relations is a practical guide to the principles and practice of fostering positive relationships with employees to develop their engagement and achieve business success. It features updated material on recent legislation changes including employment status in the gig economy and deregulation as a result of new international relations. Covering key areas such as conflict and dispute resolution, redundancies, rights and ethics, this book equips you with the skills and knowledge to plan, build and assess employee relations in any type of organization. Practical diagnostic tools and real-life examples from organizations including HSBC show how these strategies can be applied in practice.With updated guidance and examples covering employee voice and the virtual workplace, Employee Relations is a vital resource for HR practitioners and students alike. Online resources include questionnaires and templates to support the development of an effective employee relations strategy. HR Fundamentals is a series of succinct, practical guides featuring exercises, examples and case studies. They are ideal for students and those in the early stages of their HR careers.

Part One

Fundamentals

01

What is Employee Relations?

INTRODUCTION

Employee Relations is concerned with the management and maintenance of the employment relationship, essentially how management and the employees of any organization interact. In this chapter we will look at the development of Employee Relations and explore:

• the difference between Industrial Relations and Employee Relations;
• the employment relationship and psychological contract;
• the role of power in the employment relationship;
• key contributors at national, European and international levels;
• involvement, participation and employee voice;
• the basis of conflict within the organization;
• the end of the employment relationship.

Background: Industrial Relations and Employee Relations

What are Industrial Relations and Employee Relations?

Industrial Relations is the term used to describe the relationship between employer and employee collectively through the Trade Union, acting as a collective voice for employees.

In the UK it was in such a situation that Industrial Relations had its roots in 1875 when six agricultural workers, known as the Tolpuddle Martyrs, attempting to form a Trade Union, were arrested and transported to Australia. Today there exists in the UK a structure of unions available to represent employees, and employment legislation supporting good employee and employer relations. In different countries the role of Trade Unionism and the scope of employment legislation vary, dependent on the history and culture of that country. In the majority of countries the industrial landscape has changed, and in recent years there has been a reduction in membership of unions, with OECD (Organisation for Economic Co-operation and Development) countries reporting a decline in membership. The UK saw a decline of members from 30.1 per cent of the population in 1998 to 23.4 per cent in 2018 (OECD, 2018a). Even Finland, with a high Trade Union density of 78.4 per cent of the population, saw a decline in membership to 60.3 per cent in 2018. Only Iceland saw a rise in membership over this period.

However, Employee Relations is the relationship between the employee and the employer, through representation if it is available, but often without a Trade Union. We, as HR professionals and Line Managers, act as representatives of the employer, and often an employee’s main relationship with the employer will be through their Line Manager. As with all relationships, communication between both parties is important, but with the imbalance of power between the employer and employee frequently managers communicate downward to employees, with less time given to listen to employees’ contributions. Yet if we do allow employees to contribute and involve them they are likely to be motivated and their suggestions can support business performance.

So, Employee Relations concerns communication with employees and also the involvement and participation of employees, but at times the relationship has problems that need to be resolved. Employee Relations also covers the conflict between employer and employee (and in fact between employees), and the discipline and grievance procedures support the employer in managing these disputes. If the employee is represented by a Trade Union they may seek their help to represent and guide them at a formal discipline or grievance hearing. It may be that the Trade Union negotiates with the employer, and if the outcome of the negotiation is not acceptable to the union, there may be circumstances where it decides that it must take industrial action. If we have Employee Relations experience we may be involved in the negotiation or need to support Line Managers who may be attempting to continue work as usual during the strike.

All this needs to be carried out within the law, and this is our main concern as HR professionals. We might find it difficult to ensure that the relationship between Line Managers and employees meets legal requirements; this is not under our control. Yet we might well find ourselves at an Employment Tribunal supporting the employer despite the fact that a Line Manager has not listened to our advice.

In context – the labour market

The labour market provides the arrangement through which workers can interact with employers to gain work and to agree payment for this work. Within this marketplace, potential employees seek work and employers seek to fill their vacancies. This market enables competition to attract employees to the best offer, with supply and demand of employees moderating the wages. The state of the labour market can be evaluated by measures such as unemployment and wage levels. It may be tight, when demand exceeds supply and unemployment is low; conversely, if demand exceeds supply it is described as loose.

Employers need to ensure that their organizations make a profit and so need to obtain appropriately skilled workers who will work efficiently and effectively for the lowest wage possible. Employees need work that provides at least a living wage to ensure that they and their families have the money to meet their debts. This is the wage–work bargain (Behrend, 1988). However, individuals are motivated also by the social identity and social contact that is provided by work, along with the recognition and status that employment can bring. Finally there is also the opportunity for self-development through training or the challenge of promotion (Maslow, 1987). So while work may be contractual in nature, there is a need for a positive employment relationship.

Within the labour market, regulation is provided to protect the employee and according to Dibben, Klerck and Wood (2011: 12) to ‘encourage specific behavioural patterns (that is, encouraging employers and employees to engage in certain behaviours) through the imposition of costs and rewards’. In the UK legislation is formulated nationally as statutes and through case law, and internationally by membership of the United Nations and the International Labour Organization. In the past, the UK was influenced by EU law. But with Brexit the UK withdrew from membership of the EU, and no longer needs to incorporate EU directives into law. The EU–UK Trade and Cooperation Agreement allows for some changes to UK law, but not if these changes make the UK more competitive. In essence this means that rights at work are protected and this commitment to a level playing field prevents the UK reducing labour standards.

The extent of market regulation is important in the ability of a country to attract foreign investment. If it is easier to recruit and dismiss employees than in other countries then a multinational corporation (MNC) may look favourably on this location. If, for example, the need for employee consultation and restrictions on working time are demanding, the MNC may be dissuaded from investing. The MNC will balance the costs of regulation, labour costs and other operational requirements to support their decision.

It may be argued that a country should have limited employment legislation, employers should be able to hire and fire at will and labour costs should be low. Whilst such conditions may attract external investment, it would not protect employees. Governments have to balance the needs of the employees for employment protection with the restrictions that the laws they pass to protect employees may have on the market. The UK has a history of voluntarism – that human association is not coercive and Government and legal intervention in Employee Relations is kept to a minimum. This is led by Trade Unions preferring collective bargaining to legislation, possibly because of the lack of trust of those in power, a principle of non-conformity rather than establishment.

Over the last 15 years economic challenges have led governments to deregulation. The response to the Covid-19 pandemic in the UK has been decreased regulation, making business easier to run in a challenging market. There has been a proliferation of liberal market economies, such as the United States and the UK, with greater flexibility for employers to hire and fire. Liberal market economies may make it more difficult to develop a good employment relationship with employees. This is unfortunate, as high-commitment HR practices which prioritize a positive employment relationship have been shown to influence job satisfaction and job performance (Latorre et al, 2016).

A further change to the labour market in recent years has been its geographical range. For many potential employees the driving distance from home gives the extent of their labour market; for others with good rail networks, the labour market may extend to a region. But now, with globalization, employees take assignments all over the world. These assignments may not be new jobs with new employers, but roles within a single MNC which has work locations worldwide. Within the European Union, freedom of movement enables employees to work easily across different EU countries. Outside this region, employees become subject to the immigration policies of the country they wish to enter. As a result of Brexit, the UK has the freedom to make its own immigration laws, but it does not have the easy access to employees from other EU countries that it had when it was a member of the EU.

So the demand and supply of work is more than just a wage–work legally contracted bargain. It is mediated by regulation, the extent of which is influenced in the UK by its history of voluntarism and a move towards liberal market economies.

The following case study illustrates the wider labour market and looks at what HSBC has to offer for those employees willing and able to take a global role.

CASE STUDY

Global working at HSBC

HSBC offer an International Manager Programme for newly qualified graduates. International Managers are deployed across 46 countries, and are assigned a new role every two years. They are expected to continue to offer global m...