Industrial Relations

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Table of Contents

Why study industrial relations?
Key elements in industrial relations
Industrial relations theories
The Australian Industrial relations for the past two decades
Works Cited

Despite the term ‘Industrial relations’ having been accepted in academic study and the work environment, no succinct definition of the term exists in literature. As (Kelly 50) admits, definition of the term is surprisingly rare, and even where such definitions exist, they are imprecise and disagreeable in specific respects.

Despite this, (Kelly 52) has gone ahead to define Industrial relations as the “study of processes of control over work relations.” The definition by Kelly stresses the importance of processes that involve collective organization approaches, and actions by workers.

On his part, (Dunlop 4) defines Industrial relations as a “complex set of phenomena both inside and outside an organization, that determines the relationship between employees and the management”.

According to (Dunlop 4), the concept of industrial relations begun during the industrial revolution era, when the establishment of towns and cities led to the creation of industries, which in turn created job opportunities for the masses. With the emergence of large organizations, the labour market was flooded with workers who were willing to venture into promising job opportunities in the industrial sector.

These social changes later gave rise to various workplace issues, which included low wages, long working hours, unfair treatment, and dangerous working environments (Rose 23-51). Since there was little or no interaction between workers and their employers, most of these issues were not noticed by the former, usually leading to widespread discontent among the employees.

For employers to appreciate the magnitude of the issues that faced their employees, workers realised that they needed to unite and present their grievances as a unified front. This triggered the development of labour relations, which sought to ensure that employees were treated fairly (Bean 14).

According to (Wooden 17), the field of industrial relations was traditionally very wide, covering aspects such as human resource management, commerce, workers involvement in decision-making, conflicts in the work place, workers unions, and collective bargaining.

However, with the changing trends, industrial relations have diverted its attention to the relationship between parties involved in the production process (Lewer, Lewer & Gahan 12).This in turn means that the labour relations’ focus is now intent on ensuring that workers are treated with utmost trust, dignity, and equality.

Moreover, industrial relations have enhanced teamwork and cooperation between the stakeholders in the production process.

Democracy and decentralization of the industrial relations has been a major breakthrough for the modern labour market. Specifically, workers are now more involved in the decision-making process. According to (Horstman 1), industrial relations have provided workers with the much-needed empowerment, which allows them to air their grievances through the trade unions.

Employers have also been empowered and at the same time kept under regulation by the government. This ensures that the capitalists do not take advantage of the expansive labour market but compensate the workers accordingly. Other civil organizations have also been on the forefront to champion for fair treatment and the maintenance of a favourable work environment for the labour market (Cascio and Boudreau 45-58).

Why study industrial relations?

Studying Industrial relations helps students understand employment relationships better, hence preparing them for the realities of the job environment. The industrial relations course also equips students with knowledge regarding their rights as future employees, and their obligations as future employers. Specifically, the course helps students to understand and appreciate the importance of every actor in the work force.

The course highlights the different distinctive roles played by the employers, employees, the government bodies and nongovernmental organizations that champion for fairness and equality in the work place (Rose 50-71).

The course also explains the complex nature of concepts of conflict, conflict resolution, corporation, work polices, and ethics that are to be practiced by both the employers and the employees under the supervision of the government authorities.

Additionally, the course highlights important aspects of trade unions, which represent the needs and requirements of the labour market. The course places emphasis on employees’ need to forge a united front when dealing with emerging issues in the work place.

By taking up the course, students are able to appreciate the importance and relevance of the labour process. By indulging in the different theories that explain the industrial relations concept, students gain knowledge concerning the work place and governing rules therein. Students also understand how external factors such as politics and social issues affect the complex nature of industrial relations in the workplace.

Thus, this course is very important to individuals who have an interest in understanding the origin and trends that have transformed the way organizations engage with their workers. One also gains knowledge about government policies, which have been put in place to ensure that workers and employers foster good industrial relations (Kenneth 23).

Key elements in industrial relations

Industrial relations have four very important elements that contribute towards the entire concept. (Peart 5) refers to the four elements as the building blocks and the determinant factors in industrial relations. The elements include actors, context, ideology, and rules.

Actors

These include the management of an organization, employees of the organization who can be represented by the employees union, the government, and other nongovernmental organizations whose core mandate is championing for good industrial relations. For a stable industrial relation, all the actors must be aware of their roles in the system (Kenneth 4).

The management is tasked with ensuring that operations are run smoothly and workers are paid their wages in due time. It is also the management’s responsibility to ensure that worker’s compensation is fair, and that their complaints are addressed in good time.

Through the Unions, workers air their grievances to the management, and sometimes to the government, while the government and non-governmental institutions have the responsibility of ensuring that organizations meet the required workers relations and follow the laid out policies governing industrial relations (Bean 16).

Context

This refers to the driving factors that can influence or constrain the capacity of actors to make a decision that is likely to affect the functioning of the organization. These factors emanate from other parts of the society such as, technological advancement, changes in market trends, and changes in marketing strategies employed to achieve a competitive edge (Peart 6).

The contextual factors can affect industrial relations positively or negatively depending on the economic status of the country. This further means that such factors bearing on the budgetary allocations of a given organization, and the returns from the targeted market.

Politics is one such contextual factor, which has a major influence in decision-making and championing causes adopted by an organization. Further, politics affects the status of the labour market. This is because politics of a country dictates the extent of political influence in the society and the power associated with such an influence.

Ideologies

These are beliefs or cultures within the system that define the role of the different actors involved in industrial relations (Peart 19). Beliefs define how the different actors in industrial relations perceive individual, and each-other’s roles (Kenneth 12).

Based on such perceptions, positive or negative industrial relations might emerge. If the relations are positive, then this implies that actors’ perceptions are in line with the industrial relations while the reverse is true (Peart 19).

Rules

This refers to the guiding principles formulated through various processes and presented differently by different organizations within the labour market. The rules define the terms and nature of the industrial relations to be conducted by the labour market as they associate with the capital providers.

If the rules are stringent then negative industrial relations are likely to emerge, as different actors will always present a different understanding and interpretation of the rules. For a positive industrial relation to be fostered, stipulated rules should be stated clearly.

Industrial relations theories

Different scholars have come up with various theories in a bid to explain the industrial relations concept. In literature, three major theories dominate the industrial relations debate. These theories are contrasting in nature in their quest to explain workers relations, rules of engagement in the work place and the role of workers union. The three theories include unitary, radical and pluralism theories (Bean 16).

Unitary theory

According to (Peart 28) this theory portrays one happy family. It is a more integrated system that depicts a harmonious working environment for both the employers and employees. Loyalty is a major component in this system as both the employers and employees are believed to be in a mutual relationship.

In a system based on the unitary theory, not much significance is paid to the role of a workers union. As such, employees do not need to be represented by the unions as the trust created is immense and does not anticipate any conflicts. Further the system views conflicts as small misunderstandings or breakdown of information.

(Dunlop 34) describes this system as an integrated grouping that shares common values, interests and objectives. Authority and control is bestowed on the employer. (Peart 28) argues that this system is irrational as employees are taken advantage of due to lack of representation.

This happens because the presence of Labour Unions is considered intrusive and can only be accepted if the employees force their way and establish a union while disregarding the rules of the organization.

(Peart 29) states that conflict resolution in such a system uses a more coercive approach as all the powers of implementing rules and looking into solving employees issues are placed under the authority of the employer.

The theory creates an illusion that all parties to the organization share a common goal and speak a common language of solidity while those who are against such a system are viewed as outsiders, unreasonable and an impediment to achieving the organizational goals.

Such a system is more of an individualistic approach that undermines the role of workers in an organization and overlooks the importance of addressing employee’s issues amicably through an identified body that represents the demand of the employees. This type of system is mostly used in a capitalist society (Bean 17).

Pluralism theory

(Bean 18) views this theory as a democratic approach to industrial relations, since both the employer and the employee treats the organization as a community, made up of subgroups under different regimes of leadership. The subgroups include the management and the workers union. In pluralism-based systems, the subgroups have divergent views and objectives, depending on their roles in the larger organisation.

Trade unions are highly advocated for and termed as the agents of change and the link between the workers and the management. Conflict resolution in this system involves negotiation between the subgroups as employees have an added advantage of bargaining as compared to the unitary approach (Peart 32).

Through collective bargaining, the workers and the management are able to come up with a mutual understanding as to how things should be done in the organization (Bean 19).The bargaining process involves agreeing on a particular issue after the involved parties have tabled their proposals, which are debated for, and against upon which a mutual agreement is reached.

(Peart 32) asserts that such a system is prone to come up with applicable rules that do not undermine the existence, function, and role of either party.

It is more of an agreement pact. (Peart 33) explains that this system approaches a rational tactic towards conflict resolution, since it is based on a ‘very’ practical theory that avoids the acceleration of conflicts in the work place thus reducing the probability of the emergence of workers strikes. Compromise is the main strategy adapted as both parties have a say and after consultations, the best and most practical solution is adapted.

In such a system, employees feel represented and are free to air their grievances to the management with the anticipation of getting a positive feedback or change after consultations with the trade unions.

This system is evident in post capitalism organizations that are determined to deal with employees grievances and dissatisfaction, since they understand that employees are major assets to the competitive performance of their businesses (Bean 20).

Marxism/ radical theory

According to (Peart 34) systems based on the Marxist/radical theory are well represented in capitalism systems where the interests of the labour and capital are divergent. This is attributed to the fact that this system brings forth the greatest wealth differences as the gap between the rich capitalists and the poor labourers is huge thus leading to inequalities and oppression of workers.

Notably, the oppressed poor find reprieve in the trade unions’ willingness to ‘fight’ on their behalf. As such, the trade unions have a responsibility to ensure that the workers’ wages are commensurate with their labour input; that the work environment is favourable; that there is no oppression (gender or otherwise) in the workplace; and that every worker receives fair treatment from the employer.

To survive in the contemporary capitalist environment however, (Bean 24) notes that industrial relations have to change accordingly. The change is essential if Unions are to match the new capitalistic dynamics, which are conspicuously different from what was the norm in the traditional trade unions.

For example, globalization has diversified the employment sector meaning that not all employees (especially considering their cultural differences) may value trade union membership.

The radical system is prone to rampant conflicts as workers are always in a battle with management to express their resentment of the way the management perceives their role and contribution to the development of the company. (Bean 24) asserts that trade unions in this system are a necessary tool for the workers, especially in a system where anyone is dispensable.

The unions therefore act to shield workers from unfair dismissal. More importantly, trade unions are tasked with ensuring that they develop cohesive units that will outcast the authoritarian rules with the intention of advocating for change.

The trade unions are also tasked with mobilizing the employees to support a given agenda, which they feel is necessary for the advancement of employees’ position in the labour market. Such actions help Unions to acquire some power mileage, which is necessary for advocacy purposes (Rose 63).

A system based on the radical theory advocates for the existence of trade unions because of rampant conflicts associated with the system (Rose 63-68). In such a system, reaching an agreement can be a daunting task. As such, employees have to push their way through regardless of the consistency of their claims.

The system is also characterized by poor industrial relations with workers being subjected to low wages, poor working conditions and poor living standards while on the other side the capitalist reap maximum benefits from the employees input in the production process, which translates to high lifestyles integral to the living standards of the work force (Peart 36).

Another reason for studying this system is based on the controversy that has been generated over the years. Focusing on Australians for example, it is noteworthy that certain groups criticize the system, while others proclaim the achievement of the labour market towards decentralizing the system.

(Kenneth 5) argues that although the Australian government has put emphasis on regulating and monitoring the industrial relations, the practicality of the system is controversial as the system empowers the capitalists to maximize on capital returns at the expense of the labour market.

This is contrary to what (Kennedy 5) refers to as the voluntary system utilized in the United States of America where minimum regulation is conducted but the practically of the system is felt by the labour force.

The arbitrary system makes it difficult for one to understand industrial relations in Australia. As such, there is a need to examine the system from a wider perspective. In the past, policy makers generalized the whole concept as a government driven projected for resolving industrial relations issues. Both the public and private enterprises characterize the Australian labour market.

Notably, the two sets of enterprises have a different way of articulating the industrial relations regulations thus creating disparities in the general market. Specifically, the disparities noted in the federal government and the six states concerning the regulation of industrial relations rules make the topic an interesting avenue for scholars who would like to research on the influence of politics in the labour market (Kenneth 7-12).

The Australian Industrial relations for the past two decades

Calls for reform have been the major political and economic debates of Australia concerning the industrial work relation in the Australia labour market. The late 1980s saw the introduction of the collective bargaining strategy during the Hawke government (Wooden 60).

Around this time, the emphasis of the trade unions was also very vital as through the trade unions more cooperation was achieved with trade unions pushing for the decentralization of the industrial relations system (Wooden 60).

Major changes in the 1990s brought about the inclusion of individualism in industrial relations, and a reduction of the involvement of the trade unions in the workplace.

These radical changes were introduced in Australia under the Howard coalition government (Wooden 60). Critics have come out to dismiss the changes. However, this is contrary to the early 1990s where the labour government allowed the introduction of non-union agreements in the work place.

In 1996, the Liberal National party fostered a radical change in the work place, which was characterized by lack of collaboration with the trade unions and giving more power to the employers rather than concentrating on collaborative measures between the employers and the employees.

This resulted to compulsory arbitrations enforced by the Australian industrial relations commission leading to the emergence of a decentralized system. According to (Wooden 65-76), the decentralized system was more functional and fair to both the employers and employees as compared to the previous centralized system where the capital providers had all the decision-making powers.

In the recent past, the government has established a national work place relations system that is in line with the constitution. The current system favours fair pay and appropriate working conditions by setting out the minimum wages that an employer can pay his employees.

Motivation through awards is highly recommended as workplace agreements are supposed to work in favour of both parties. Collective bargaining, safety, and the right for association and formation of trade unions are the key driving components of the current situation of the Australian labour market.

Works Cited

Bean, Ron. Comparative Industrial Relations: An Introduction To Cross National Perspectives. London: Thomson publishers, 2004. Print.

Cascio, Wayne, Boudreau, John. Investing in People: Financial Impact of Human Resource Initiatives. 2nd Ed. Prentice Hall: Pearson, 2010. Print.

Dunlop, John. Industrial Relations Systems. Cambridge: Harvard Business School Press, 1993.Print

Horstman, Bob. “Decentralized and Deregulated Australian Industrial Relations: The effects on HRM and IR in Small Enterprises.” Employee Relations 21.3 (1999): 1-10.

Kelly, John E. Industrial Relations: Approaches to Industrial Relations and Trends in National Systems. New York: Routledge, 2002. Print

Kenneth, Frederick W. Australian Industrial Relations Systems. London: Oxford press, 1990. Print.

Lewer, Alexander and Gahan, P. Understanding Australian Industrial Relations. 7th ed. Melbourne: Cengage Learning, 2006. Print.

Peart, Michael J. Industrial Relations: A Textbook. London: Croom Helm, 1982. Print

Rose, Ed. Employment Relations. Prentice Hall: Pearson, 2008. Print.

Wooden, Mark. The Transformation of Australian Industrial Relations. Sydney: Federation press, 2000. Print.

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