Effective personnel management
There are always chances that employees will form a works council if the business organization if facing financial problems on a long term basis. This is because works councils help employees in the protection of their quasi rents. This are normally created through human capital investments. Studies that have been done in the past show a negative relationship between unions and employment growth in Australia. Studies show that once the endogeneity of unions has been accounted for, then the negative link between employment growth and unions disappears.
Union membership on the other hand has the advantage of reducing the employee’s risk of being sacked by employers unfairly. In this case the risk of being sacked by employers rises when the employment losses in a workplace are high. On the other hand works councils in Australia could lead to positive growth in the employment sector. This is because works councils have a limited focus on redistribution of rents but they have a stronger focus on creating unity in employer employee relations.
The role of works councils in the management of employment relationship in Australia is to help in the making of employment decisions therein. One of their major roles is to help employees in the bargaining of their compensation plans at the work place. This is because there are normally instances when employers fail to pay employees their dues. In this case the works council come in to represent employees. Works councils normally have the role of demanding compensation on behalf of employees.
This can be compensation for dislocation which can be due to major organizational changes or they can also be caused by closing of plants. The other role that works councils has is to ensure they carry out consultations in respect to dismissal of employees from jobs. Works councils in general help in employee representation. Their role in the management of employment relationship is to ensure the increase in joint establishment surplus. Their role is also to cooperate with the management in the organization.
These two have to have a spirit of mutual trust. This cooperation is normally for the benefit of both the establishment and the employees in general. This is because these two parties depend on each other. The two actually need each other for their success. Just like it has been highlighted earlier a major role that is played by works councils in employment relationship in Australia is being employee’s voice. They have a collective voice unlike if employees were to speak at individual levels.
This means that works councils can carry out collective bargaining on behalf of employees. This is normally done in relation to various issues like terms of payment and workplace conditions. This is because individual voice of employees is not normally effective in representing employees at the workplace. Having a collective voice helps in overcoming free rider problems and influences the aggregation of employees’ preferences. This creates a collective bargaining power whereby works councils communicate to employers the employees’ preferences.
This helps in the optimization of provision of public goods at the work place. This also helps in creating a very effective personnel management at the work place. Workers normally benefit in return by having an increased productivity at work. This also helps in increasing the morale of the workers in general and also employment growth in Australia. Works councils have codetermination rights that help in protection of both employees and employers interests