Labor Relations and Collective Bargaining - Research Paper Example

Labor Relations and Collective Bargaining Labor relations have been traditionally considered as an important part of economic life, mostly due to their effects on employee performance. In practice though it seems the specific sector is not adequately protected by law. Many efforts have been done for developing an effective framework regarding the regulation of labor relations but the results can be characterized as rather disappointing. Current paper focuses on labor relations in different industrial sectors. The overview of the sector, using the relevant literature, proves that labor relations have been significantly alternated through the years trying to respond to the economic and social needs of each era. Reference is also made to collective bargaining as an important aspect of labor relations. Moreover, the cost of labor contracts is analyzed, as possible, as this cost is differentiated across industries and enterprises. The examination and the analysis of the above elements of labor relations leads to the following assumption: labor relations are necessarily influenced by the local economy and social ethics, as this influence is reflected in the cost of labor contracts and the level of success of collective bargaining. From this point of view any effort for the improvement of labor relations would be based on the following criteria: close monitoring of the costs involved and cooperation with unions, as representatives of an important part of the local population. The form of labor relations worldwide is based on similar criteria: the need for employee safety, for trust in the workplace and for increased protection of employees’ compensation, including salary and potential benefits. For many decades, legislators in all countries have tried to develop a legal framework for ensuring the protection of rights of both employers and employees, as incorporated in labor relations. However, the enforcement of relevant laws has been often proved problematic, a fact that is reflected in the high number of legal texts emphasizing on the particular sector. Moreover, it should be noted that the intervention of legislators and judges in labor conflicts has not been always in favor of employees. In the study of Holley, Jennings, and Roger it is mentioned that ‘in 1884 a judge in the state of Tennessee wrote: all may dismiss their employees at will’ (Holley, Jennings, and Roger 522). In any case, the need for effective management of labor relations, in all their aspects, has been a priority for politicians, legislators and theorists. An example is the theory of scientific management developed by Taylor in 1935 (Holley, Jennings, and Roger 522). The Wagner Act of 1935 also proves the willingness of the state to provide adequate protection to both employers and employees (Holley, Jennings, and Roger 522), since, in this way, social and economic conflicts could be effectively controlled. From another point of view, Liff (161) notes that labor relations should be effectively protected because of the following reason: apart from their power to influence the social and economic structure of a particular society, labor relations can also affect the political system of the country involved. This issue is clearer in the case of unions, which should be viewed as ‘political organizations’ (Liff 161) being able to influence the political beliefs of their members, which can be thousands or even millions. Liff (161) also highlights the importance of unions and collective bargaining; it is explained that certain employee rights, like the right to strike, are often not available to employees but they are only accepted, in terms of law, if they are pursued through unions (Liff 161). For this reason, the relationship between employers and unions should be regarded as a priority for politicians and legislators when having to decide on the form and content of labor relations’ legal framework. On the other hand, there is always the chance that labor relations are not among the priorities of judicial and political authorities in a specific country. This phenomenon tends to appear in the following case: when the governors of a country do not wish to offer equal protection to employers and employees, mostly when state is likely to be the employer in the high majority of enterprises. In other words, in highly centralized countries labor relations are not adequately protected and promoted being considered as a threat to existing political and social framework (Beik 2005). Even in this case, employees can seek for the protection of their rights through the relevant international bodies, which focus on the promotion of human rights, as these principles can be also related to employment – related conflicts. As already explained above, the framework of labor relations can be quite complex incorporating existing political, social and economic trends. This issue is made clear in the case of collective bargaining, a critical aspect of labor relations. In fact, the review of the relevant literature, as it is, indicatively, presented below, proves that labor relations are based on collective bargaining since most of employee rights are secured only through appropriate collective bargaining initiatives. Existing legislation focusing on collective bargaining seems to promote two specific collective bargaining processes: mediation and facilitation. In accordance with Caisley (2007) mediation seems to be ‘the preferred means of dispute resolution under the Employment Relations Act 2000’ (Caisley 85). The above view refers to a specific legislative text but it is further supported by the claim that mediation is an ideal means of dispute resolution in such conflicts, i.e. labor conflicts, since the specific process is ‘flexible, accessible and confidential’ (Caisley 85). It is also noted that under certain terms, such as in the case of strikes and lockouts, the use of mediation is not only unavoidable but, rather, compulsory (Caisley 85). However, the potential weaknesses of mediation cannot be ignored. As Caisley notes (85) mediation is often not well organized or monitored, as a process, a fact that usually leads to the failure of the negotiations involved. It is clear that existing legislation needs to be reviewed for ensuring the effectiveness of existing collective bargaining processes. An indicative initiative of such type is the introduction of the ‘Employment Relations Amendment Act (No 2) 2004’ (Caisley 85), a legal text that offered to ‘the Employment Relations Authority new powers’ (Caisley 85), meaning the ability of the specific authority to enforce the development of appropriate solutions in the context of collective bargaining processes. Because of the potential weaknesses of mediation, as a collective bargaining process, the use of alternative processes of such type has been considered as necessary; facilitation is considered as a process that has significantly helped towards the increase of effectiveness of collective bargaining. However, facilitation should not be used as the primary means of collective bargaining (Caisley 91). It should be rather used only in cases where severe conflicts are developed in a collective bargaining process. In such case, there would be no other way of reaching a collective bargaining agreement unless through facilitation. One of the most important issues when having to evaluate a particular collective bargaining system, meaning the collective bargaining framework of a specific country, is the following one: at which level is this system likely to be affected by the relevant international law? In accordance with Piekkola and Snellman (2005) this issue is quite critical for the following reason: in countries where existing collective bargaining processes can follow the trends of international integration related to collective bargaining, then these processes are expected to protect more effectively employees’ rights (Piekkola and Snellman 9). At this point, it could be argued that the participation of a collective bargaining system in initiatives that promote globalization, as international integration in regard to collective bargaining can be characterized, cannot guarantee the quality or effectiveness of the particular system. Moreover, when such initiatives are against existing political framework, then their chances for success are limited, as in the case of strongly centralized countries. On the other hand, Troy (1999) supports that collective bargaining is not an indispensable part of labor relations at the level that employees can protect their rights without joining a union. This is the case of non union workers who can seek for the protection of their rights through existing employment laws, as they are applied on all workers, no matter if they are members of unions or not. From a similar point of view, Najita and Stern (2001) support that the effectiveness of a collective bargaining system is not guaranteed. For this reason, employees would rather try to secure their rights through relevant laws. This problem appears, for instance, in the following case: when the structure of a country’s public sector is quite complicated, a fact that leads to the necessity for the existence of two different collective bargaining systems: one for employees of the public sector and one for those of the private sector (Najita and Stern 26). Apart from the structure and the quality of existing collective bargaining system, the performance of labor relations in a particular country can be affected by the cost of labor contracts. When referring to the cost of labor contract, reference is usually made to all economic aspects of this contract, meaning all the phases of this contract, i.e. from the beginning up to its termination. The characteristics and the types of cost of labor contract are analyzed in the study of Shen and Xiong (2011). In accordance with the above researchers, who accept the relevant view of Williamson (1985) the cost of labor contracts would be divided as follows: ‘advanced costs and afterwards cost’ (Shen and Xiong 293). The first category refers to the cost of hiring an employee and of compensating the employee in accordance with the terms set in the labor contract. On the other hand, afterwards cost is a term used for describing the funds invested on activities such as the training of the employee, the development of effective communication in the workplace and the supervision of the employee. (Shen and Xiong 293). At the next level, the local employment laws may require the subscription of workers in particular organizations or institutions, as for instance in the case of Ukraine with the national law orders that workers in foreign firms operating across Ukraine need to be registered with the General Directorate for Servicing Foreign Representative Offices (Alibekova 435). In the above cases, the level of fees required is usually set by the law. At this point the following issue should be reviewed: would other expenses resulted from a particular labor contract could be characterized as costs of the labor contract, in the terms that they could be enforced using existing laws? Lewin, Kaufman and Gollan (2010) refer to the case of the losses of enterprises resulted because of a strike. These losses could be considered as costs of a labor contract only if they are not justified by the local employment laws. In such case, the employer could ask the relevant amounts to be deducted by the employees’ compensation. Otherwise, the employer could not develop such claim. A similar view has been developed by Steinfeld (2001). In accordance with the particular researcher, the costs of a labor contract should incorporate all expenses that would be normally expected to result because of the particular contract. The losses caused to the organization because of a strike of employees would be included in such costs in case that the strike has been justified by the law. The examination of the various aspects of labor relations, as based on the relevant literature, has indicated the importance of the specific sector for the political, economic and social life of all countries. At the same time, it has been also proved that certain aspects of labor relations, such as collective bargaining and labor contracts’ costs, are not always effectively addressed, referring not only to the content of relevant legislation but also to the interpretation of these laws by employers and managers in different industrial sectors. In other words, it seems that the major problem of labor relations is not related to the adequacy and content of relevant laws but rather to the lack of mechanisms in regard to the enforcement of these laws in practice. It has been also made clear that the specific problem is often supported by the state, aiming to protect existing political trends as explained above. In this context, the development of an effective labor relations framework seems to be depended on the following criteria: the willingness of the political and judicial authorities to participate in such initiative and the support of the relevant activities and efforts by the unions, as representatives of people with different social, political and economic characteristics. Works Cited Alibekova, Antonida. Employment law. Frederick: Kluwer Law International, 2007. Beik, Mildred. Labor relations. Westport: Greenwood Publishing Group, 2005. Caisley, Kiely. Collective Bargaining. Auckland: CCH New Zealand Limited, 2007. Holley, William, Jennings, Kenneth, and Roger, Wolters. The Labor Relations Process. Belmont: Cengage Learning, 2008. Lewin, David, Kaufman, Bruce and Paul, Gollan. Advances in industrial and labor relations. Bingley: Emerald Group Publishing, 2010. Liff, Stewart. Managing government employees: how to motivate your people, deal with difficult issues, and achieve tangible results. New York: AMACOM Division of American Management Association, 2007. Najita, Joyce, and James, Stern. Collective bargaining in the public sector: the experience of eight states. New York: M.E. Sharpe, 2001. Piekkola, Hannu, and Kenneth, Snellman. Collective bargaining and wage formation: performance and challenges. New York: Springer, 2005. Shen, Gang and Xiong, Huang. Advanced Research on Electronic Commerce, Web Application, and Communication: International Conference, ECWAC 2011, Guangzhou, China, April 16-17, 2011. Proceedings. New York: Springer, 2011. Steinfeld, Robert. Coercion, contract, and free labor in the nineteenth century. Cambridge: Cambridge University Press, 2001. Troy, Leo. Beyond unions and collective bargaining. New York: M.E. Sharpe, 1999. Read More