Workers Differences to Decline Collective Bargaining - Coursework Example

Extent to which worker’s differences decline collective bargaining Contents Introduction 3 Discussion 4 Collective bargaining in UK 4 Decline of collective bargaining 5 UK payment systems and pay levels 7 Current issues 9 Conclusion 10 References 12 Introduction Collective bargaining can be stated as a negotiation procedure between a group of employees and employers aimed towards achieving an agreement in order to regulate overall working conditions. In this approach, trade union takes the major responsibility to represent the common interests of employees. The management of any organization needs to work in collaboration with their respective trade union so as to reduce any form of workplace conflict. On the other hand, this form of bargaining even motivates employees to achieve their desired goals and objectives. This process is noticeable in majority of the companies in the present scenario where trade union acts a bridge between management and workforce. However, there are certain differences in workers in an organization which is creating a negative impact on the trend of collective bargaining. For instance in Britain it has been observed that there is growing differences amongst workers in terms of skills possessed by them and wages that are offered. This in turn makes collective bargaining a difficult task as the major aim of this procedure is to convince management to increase overall wages by certain percentage. These collective agreements which are brought forth by the trade union are on basis of various factors such as wage scales, health and safety, working hours, grievance mechanisms, training, right to participate in company affairs or workplace, and overtime. The trade union can specifically negotiate with a single employer or a group of employers but it highly depends on the country so as to reach an agreement which can be implemented industry wide. Discussion Collective bargaining in UK In 1969, at common law it was stated by the court that collective bargaining cannot be regarded as binding but Industrial Relations Act in 1971 proclaimed that collective agreement is binding until there is a written clause given along with the agreement. However when the Health government was demised, the law eventually was reversed so as to reflect upon the industrial relation tradition of Britain which focused on legal abstentionism in context of disputes occurring in the workplace (ACAS, 1983). This particular law is now encompassed within the Trade Union and Labour Relations. In United Kingdom, collective bargaining can be stated as not legal binding in overall context. On the other hand, this presumption can be rebutted if all the formalities is in writing and consisting of a legal provision that signifies that it should be legally enforceable (Williams and Adam-Smith, 2010). However, collective agreement cannot be itself regarded as enforceable as many of the factors has a direct relation with pension, pay and holidays. These factors are basically incorporated within the agreement of employee and it does not depend on the condition as to whether the employee is a trade union member or not. On this aspect it is clearly evident that such form of contract cannot be enforceable. The employees can have certain problems with the conditions in the agreement and can raise a complaint to employer but if majority of the workers are in favour of the agreement conditions then the management has full liberty to sack such complaints. British law majorly denotes the adversarial nature which is reflected through industrial relations of UK (Pereira, 2004). There is even a background fear which is internal to employees such as if the trade union becomes bankrupt for getting sued for collective bargaining than the employees would be basically left without representation in relation to collective bargaining. The EU influences has been able to change the unfortunate scenario in context of collective agreement and many Japanese and Chinese firms which possess UK factories have implemented best practices by closely knitting the workforce with company ethics. On the other hand, there has even been decentralization of collective bargaining in UK as the trade unions have shifted towards company or a plant from an industry. This concept mainly in this region has little impact on pay determination as the employers in the initial stage of job specify the pay scale for the employees (Thomason, 1984). The scope of collective bargaining was relatively high in the earlier decades but with growing trend of diverse workforce the inclination towards this approach is deteriorating. There is a growth in bargaining in shop floor which relates greatly to productivity and pay. Wage councils are the authority who designs the wage structure as per an industry and they need to deal with specific changes that are brought forth by the trade union. It can be stated that in comparison to other countries Britain usually possess limited legal regulation. This in turn affects the overall industrial actions as trade unions possess less power to enforce such collective agreements. Decline of collective bargaining There are various issues which have led to decline in collective bargaining. The major reason for decentralization of collective bargaining was structural reforms which had taken place in political context. However the declining power of trade union can also be stated as one of the reasons which had eventually led to overall reduction of collective bargaining (Williams and Adam-Smith, 2010). The reasons for declining trend of trade union was the changing industrial structure due to which blue collar factories started to decline and more of small capital intensive enterprises tend to rise, growth in atypical employee base, a rising trend towards individualism due to higher living and educational standards, difficulties in terms of unionising employees due to resistance of employers mainly in medium and small sized firms, and a rapidly changing workplace environment. Government policies are usually stated as one of the determining factors of collective bargaining and union membership (Clegg, 1979). In 1945, there was a tremendous growth in formation of trade union and collective bargaining which was observed in UK but this trend started to decline from 1980s and the issue was that government policies resisted such collective agreement to be implemented in workplace. The major focus of these political aspects was to enhance the level of productivity within an organization. On the other hand, these policies are usually a result of socio-economic circumstances. For instance, in democratic countries, government usually design policies in such a manner that it could bring in prosperity, but if unions are observed to create a negative impact on external environment then it is likely to be suppressed. If the policies framed by trade union enhance the degree of productivity and prosperity then the government is likely to adopt an encouragement policy (McCarthy, 1966). The Department of Labour has categorised trade unions as a body which is usually represented during dispute hearings in comparison to collective bargaining. It was calculated that at the end of the year 1998 the total bargaining councils in Britain was 76 but this number eventually decreased and in 1999 the total councils present in this country was 73. Though there was a rise in trade unions but there membership considerably decreased from 3.8 million to approximately 3.35 million in 2000. It can be stated that the total amount of decrease in context of collective bargaining council was 11.84% (ACAS, 2010). In private sector as competition intensified the main focus was on increasing productivity than on high wage scale. With growing competition and high rates of unemployment even employees desired to earn appraisals than to be part of any collective bargaining agreement. On the other hand, it can even be stated that employees joining these private sector firms possessed different skill set which was aligned with the job requirements and hence they often did not agree with the concept of collective bargaining. The public sector was not highly competitive in comparison to private sector but it had an impact of the government norms and regulations. There were rules implemented by government which aimed towards reducing employee unionisation so as to enhance the levels of productivity that contributed abundantly towards economic growth of a country (Holdsworth, 2010). The major political changes were bringing forth a harmony between employer and employee and reducing the scope of collective agreement formulation. There were even changes in context of labour law as appropriate wages were allocated to employees on basis of their competencies. On the other hand, companies even started to hire employees possessing varied skills which in turn eradicated the concept of collective bargaining from the system. The economical changes were the rising rate of inflation which had an impact on operations of an organization. Labour costs considerably increased with high wage allocation to employee base but this brought forth no such change on the overall productivity (Burchill, 1970). This in turn enforced companies to sack any such negotiations on pay scale and make employees aligned towards achieving better performance. The impact of these changes was highly significant on trade union as they were totally weakened in terms of negotiating with employer on any such workplace conditions. UK payment systems and pay levels United Kingdom since 1998 has fixed its minimum wage rate and even sets out for all workers the outer limit in context of working time. Working time and direct wage is a current phenomenon which was previously left upon the approach of collective bargaining. In earlier years employees had their wage cut for various reasons such as disobedience in the workplace or even some form of writing while recording the stock level. In 1909, the Trade Boards Act came into existence which implemented a new rule stating that there is minimum wage rate as per different industrial sector. This form of minimum wage rate was implemented in contract of every worker, where it was stated that workers need to perform according to their wage rate. The wages usually for 21 years old stood at £6.08, wages for individuals between 18 to 20 years old was £4.98 and those who had required educational qualification and was under 18years there minimum wage rate was £3.68. Pay scale of UK is usually calculated through total pay which is received by an individual by their respective working hours (ACAS, 2006). This at an average is denoted as the pay reference period for a particular month. However the regulation on payment scale is such that wages can be deducted by an employer if required employment conditions are not met by an employee. There are even penalty conditions incorporated in the payment system where double the minimum wage is deducted from employees who fail to meet the specified employment conditions. The pay scale in UK is not much inclined towards equality in wage structure but focuses more on profit sharing (Thomason, 1984). There is inequality in the payment system in terms of skill set of employee base. An employer usually takes into consideration the basic rule associated with minimum wage rate but it allocate wages on the basis of competencies possessed by an employee and one’s performance in relation to achieving desired goals and objectives. There lies minimum regulation in context of equality as this factor only gains significance when it comes to avoiding any form of discrimination related to pay scale. On the other hand, the trend of payment scale in UK has shifted towards individualized payment approach where there is no such wage regulation standard but there is enough flexibility to incorporate changes according to job responsibilities of employees (Hale, 2009). In the highly competitive industry, the payment systems of UK follow a subjective approach where the job design is greatly associated with the wages being offered to the employees. Current issues In the present scenario there are couple of issues which surrounds the pay scale of UK and in turn has a significant impact on the collective bargaining approach. The austerity policies are designed by government so as to reduce any form of budget deficits majorly in adverse conditions of economy. These policies comprise of various factors such as increasing tax rate, spending cuts or mixture of those factors. Austerity policies are fiscal discipline which is demonstrated by government so as to align the overall revenue with expenditures. Majorly these policies target certain programs for cuts such as development projects, social spending or other such welfare program. On the other hand, the common source of increasing fees of users is tax, bus fares, train fares, etc. However this form of policies has an impact on payment scale of employees as the retirement age of workforce is considerably increased and their respective pension witnesses major cuts (ACAS, 2005). For instance the negative impact of austerity policies is highly observed in public sector where employees are subjected to loss of payment as there is higher cost and less productivity. This is often termed as deferred pays where employees are not given their requisite pension amount on retirement. There are even circumstances where this form of policy implementation in UK firms has led to labour strike and even many firms have been shut down. Public sector organizations in the current scenario are witnessed to adopt the business models of private sector organizations. The major reason is that there is a need to control the total labour costs so that higher revenue margins can be achieved with better levels of productivity. There is even decrease in the percentage of trade unions in UK firms as there is strong co-ordination in context of industrial action which is observed in public sector organization. The collective bargaining approach in UK has noticed a decline due to less of employees being ready to be unionised as they focus on being aligned with the common goals of an organization (Lyddon, 2009). Strikes in UK firms usually results when there is any form of injustice done by an employer. On the other hand, collective bargaining and effective strike action cannot be inter-related as the trend of collective agreement is declining and trade unions in UK organizations in most conditions work in collaboration with the management. The current issue in the UK pay scale is the high wage rate and low productivity. These issues are closely knitted with the austerity policies of government that focus on spending cuts. Conclusion As per the study collective bargaining is an approach through which employees put across their demands to management with the support of trade union. It can be stated that this form of approach enables an organization to eliminate any form of workplace conflict from the system. The trade union members are responsible towards forming an agreement which denotes the desirable wage rate of employees. However the trend of collective bargaining is decreasing in UK which states that more employees are becoming performance focus than to be a part of any dispute. There are many issues which have resulted into declining of trade union and austerity policies are one such factor which has created a negative impact on this approach. The government policies to a great extent regulate the wage rate which is adopted by an organization. Hence the laws and regulations are always taken into consideration while designing the pay scale structure. On the contrary, collective bargaining approach is decreasing as there are a lot of changes taking place in political, economic and legal context. The major economic condition is the rising rate of inflation and the higher labour costs. It is often witnessed that organizations design the wage structure on basis of the competencies and job responsibilities possessed by an employee. This in turn affected collective bargaining as majority percentage of employees is not in favour of approaching the management for similar increase in pay scale. References ACAS. 1983. Collective Bargaining in Britain, Its Extent and Level. Oxford: Basil Blackwell. ACAS. 2005. Appraisal Related Pay. London: ACAS. ACAS. 2006. Pay Systems. London: ACAS. ACAS. 2010. Job Evaluation, Considerations and Risks. London: ACAS. Burchill, R. C., 1970. Introduction to Payment systems and Pay Structures with a Note on Productivity. New York: Dodd Mead & Co. Clegg, H., 1979. The Changing System of Industrial Relations in Great Britain. Oxford: Blackwell. Hale, D. 2009. Labour Disputes in 2008. UK: Palgrave Macmillan. Holdsworth, C., 2010. Patterns of Pay. UK: Palgrave Macmillan. Lyddon, D. 2009. Industrial Conflict under New Labour. New Jersey: Routledge. McCarthy, W., 1966. The Role of Shop Stewards in British Industrial Relations. London: HMSO. Pereira, S., 2004. Collective Agreements and Wages in the New Earnings Survey. UK: Hart Publishing. Thomason, G., 1984. A Textbook of Industrial Relations Management. UK: CIPD. Williams, S., and Adam-Smith, D., 2010. Contemporary Employment Relations. London: Oxford University Press. Read More