Employment relation Essay Example

and inflation rates rose. In order to tackle this problem, the government introduced income policies to control pay increases; nonetheless, these measures had a limited timeframe (Blyton and Turnbull, 1998).

The policies had a greater effect on private sector employees and were viewed as an intentional effort to give more power to employers, leading to labor disputes. In the 1960s and 1970s, trade unions were perceived to possess excessive power and to use it recklessly, resulting in the decline of British industry's competitiveness due to product distribution issues and rising costs. Trade union leaders once again pledged wage restraint in exchange for increased industrial conflicts during economic policy discussions.

Although trade unions agreed to wage restraint from 1975-77, the government enforced a 5% increase on the public sector in 1978. This action had a major impact on the 'winter of discontent' (1978-9) (Blyton and Turnbull, 1998), providing an opening for a fresh approach to economic management and industrial relations. Margaret Thatcher sought to drive this transformation with the rise of the 'new right'.

The emergence of monetarists brought forth the belief that inflation was caused by multiple factors. These factors included excessive money circulation, high levels of borrowing, the government's need to decrease its borrowing, and the influence of market and labor dynamics on the supply of goods. These beliefs were adopted as policies by the conservative government during Mrs. Thatcher's time in office. The suggested methods to tackle inflation were either deflation or wage restraint. Consequently, the government's role in employee/management relations underwent a shift from being "neutral."

The Thatcher government held the belief that economic issues were primarily the result of excessive trade union power and state

intervention. Consequently, it was believed that by reducing these factors and promoting entrepreneurship through deregulation and privatization, there would be a substantial increase in competitiveness due to lower wages and costs. This theory posited that unemployment would create job competition, thereby driving down wage costs. Minford contends that trade unions utilize their 'monopoly power' to elevate wages beyond market rates.

Employers hiring fewer union workers causes an increase in the unemployment rate, according to neoclassical economics. Unions are believed to raise costs (wages), contribute to inflation, and lead to unemployment and income inequality within society. As a result, both individual firms and the overall economy become less efficient due to the implementation of restrictive practices and demarcations (Blyton and Turnbull 1998). Therefore, it was deemed necessary to reduce the power of unions in order to lower wages, decrease unemployment, and enhance efficiency.

The goal of reducing trade union power was achieved by the Conservatives elected in 1979, 1983, 1987, and 1992. They implemented new trade union laws, exploited high unemployment rates, and defeated the miners' strike in 1985. These actions effectively accomplished their objective by the mid-1980s. Furthermore, legislation enacted during the 1980s impacted trade unions' internal affairs and governance by requiring secret postal ballots and safeguarding union members' rights. As a result, control shifted from shop workers who were previously heavily involved in union activities to union leaders.

The decrease in trade union membership can be attributed to employers recognizing the issues they caused during the 1980's and 1990's, resulting in less recognition of unions. Employers began de-recognizing unions and favoring bargaining purposes, leading to reduced benefits for workers. The steward role was endangered due to management

HRM strategies that aimed for flexible work arrangements and employee involvement, which were not easily influenced or controlled collectively. This made workers question the value of joining trade unions. Globalization has had a significant impact on industrial relations over the past two decades. While multinational companies have been around for some time, what is new is the rapid establishment of production facilities in newly industrialized countries worldwide. Britain has experienced this trend particularly strongly as it has attracted varying levels of inward investment.

In Europe, Britain was a significant choice for investment from Japan and Korea as they respectively accounted for 40% and 50% of the total investments. Moreover, these companies formed partnerships and cooperated on the creation and manufacturing of different goods. Consequently, by 1996, foreign entities controlled a quarter of the United Kingdom's manufacturing capacity. The emergence of globalization brought about alterations in production techniques and labor management which ultimately affected employment, labor practices, trade unions, and industrial relations.

The relatively lower quality of management in Britain has become a focal point due to the foreign management's ability to achieve significantly higher efficiency. Over the past twenty years, globalization has intensified competition, resulting in losses for the UK. This is primarily attributed to its lower levels of productivity, wages, and costs compared to its main competitors. However, there is a persistent lack of investment leading to low productivity, ultimately causing higher unit labor costs.

Britain responded to competitive pressure by implementing new market circumstances. These changes involved intraorganisational developments, such as the introduction of new technology and adoption of new manufacturing techniques (Blyton and Turnbull, 1998). In order to remain internationally competitive, UK industry resorted to

cutting wages in comparison to other industrialised economies due to Britain's lagging productivity. Furthermore, globalisation also resulted in changes in employment and the labour force.

The text examines the impact of employment changes in both the production and service industries. During the 1980s, there was a significant decrease in job opportunities within production, while the service sector experienced growth. Over the course of the 1980s and 90s, there was an increase in female part-time employment, leading to women constituting nearly half (49.9%) of the total workforce by 1996. Many women found employment in the service industry, particularly in areas such as health and social work where they comprised 81% of workers or education where they accounted for 71%. In addition to these developments, new job locations called 'Greenfield sites' were established in rural regions. Concurrently with these shifts, self-employment witnessed a rise of approximately 50% from 1981 to the mid-1990s.

During the 1980s and 90s, unemployment rates were four times higher compared to the 1960s and 70s. This period also witnessed a rise in mergers and acquisitions, resulting in the formation of larger multinational companies. Notably, the United Kingdom stood out globally by accounting for 75% of all hostile takeovers (Blyton and Turnbull, 1998). Furthermore, between 1979 and 1997, numerous laws were enacted to alter the power dynamics between labor and capital. Many of these legislations imposed limitations on trade unions and impeded their ability to organize and take collective action.

Mrs. Thatcher introduced legal restrictions in stages to avoid repeating the mistakes of previous attempts to reduce employment rights, such as protection from unfair dismissal. The pace of legislation change increased when Norman Tebbit took over the

Department of Employment in 1992 and it became a significant tool for economic policy. Additionally, the European Union has had a significant impact on employee relations.

The main European countries typically had a higher level of corporatism compared to Britain. Britain became a member of Europe in 1973, which introduced the possibility of tension and friction. Initially, policy initiatives did not prioritize employment and industrial relations. However, with the implementation of the single market act in 1987, there has been an effort to create a fair competitive environment referred to as a 'level playing field'. Many countries fear that this competition may lead to a decrease in wages and working conditions to the lowest possible level.

As a result, the European Union (EU) introduced the social chapter during the Maastricht agreement to establish and achieve a common understanding of basic standards. Despite choosing not to participate in these agreements, the UK adopted certain aspects as health and safety laws. The conservative party viewed the social chapter as burdensome, leading to increased challenges for businesses. Furthermore, technological progress also contributed to changes in how employees interacted with each other. The degree of this impact varied depending on factors such as specific products/services offered, organizational type, and attitudes towards labor unions.

Advancements in technology have caused a decline in the requirement for unskilled labor within manufacturing sectors, while simultaneously creating a greater demand for low skilled and semi-skilled workers in service industries. Furthermore, information systems have facilitated the consolidation of production stages for businesses, enabling them to decrease their inventory and operate on a just-in-time basis. These alterations in economic and political aspects have primarily been influenced by a transition

in economic policies that prioritize inflation over employment.

During the 1930s depression and World War II, there was a strong drive in Britain to improve the future for most people. However, when the Conservatives took power in 1979, Mrs. Thatcher aimed to decrease inflation by increasing unemployment. The previous Labour government had tried to boost employment, but this led to inflation. Thatcher believed that excessive trade union power and government intervention caused these economic problems. As a result, the conservatives set out to tackle these issues.

Globalisation has caused businesses to face greater pressure to enhance their competitiveness against European companies, leading to intensified competition in domestic and international markets. This has exacerbated the challenging economic conditions in the UK, as evidenced by a decline in the country's share of global trade and total exports, along with a prolonged period of decreased productivity compared to major industrial competitors.

Blyton and Turnbull (1998) argue that in the 1980s, the United Kingdom faced difficult trading conditions. As a result, it became a net importer of manufactured goods for the first time in 1983. This situation showed that the UK economy was relatively fragile due to insufficient productivity growth and a decline in manufacturing sectors. To tackle this issue, the Conservative government focused on controlling wage inflation, especially in the public sector. Furthermore, they also aimed to improve productivity and competitiveness through management efforts at a smaller scale.

During the 1980's and 1990's, the conservative party introduced several acts to address challenges faced by businesses in Europe. These included the Employment act of 1980 and 1982, Trade Unions Act of 1984, Wages Act of 1986, Sex Discrimination Act of 1986, Employment Acts

of 1988 and 1989, as well as subsequent acts in the following decade. Additionally, there was the Trade Union Reform and Employment Rights Act of 1993. The main objective behind these measures was to improve employee relations and enhance business competitiveness. They were implemented in response to issues stemming from previous labour government policies and trade union activities.

The modification in laws and employee associations was impacted by several elements, including the founding of the European Economic Community through the Treaty of Rome in 1957. The main objective of this community was to promote economic growth by removing trade barriers and enabling unrestricted movement for goods, services, capital, and labor. However, it is essential to recognize that industrial relations practices vary significantly among different nations.

According to Salamon, a conflict emerged between the UK conservative government and multiple EU partners due to contrasting political ideologies. The European countries supported a 'social democratic' ideology, whereas the UK government favored a more 'liberalist/ laissez-faire' ideology. This clash led to the creation of the initial social action plan in 1974. Later on, tensions with the EU reemerged in 1989 through the Social Charter and in 1991 via the Maastricht Treaty on Political union.

The European Social Charter is the primary means of making progress in employment. Its goal is to ensure that employees benefit from the single market. It not only establishes employment standards but also strengthens employee rights and participation in decision-making (Salamon, 1998). The advancement of technology and industry has been an ongoing process since the industrial revolution. This process involves eliminating certain types of work while introducing new ones.

The rise of the 'Technological Revolution' in the 1980s and

90s can be attributed to heightened change driven by globalisation and the competitive advantages of other EU businesses. Salamon proposes that, during times of recession, the diminishing power of trade unions hindered their ability to negotiate and reach consensus on new technology. This may have contributed more significantly to the procedural aspects of many technology agreements than any real disparities in productivity changes.

All the factors have caused consequences that affected changes in employee relations over the last 25 years. Economic factors led to deflation and unemployment issues for workers, along with wage cuts for employed individuals. Since the conservative party's election in 1979, there has been a change in economic policy towards a monetarist approach, focusing on controlling inflation and achieving international competitiveness as highly important.

The government implemented a policy to cut spending in the public sector by privatizing, imposing cash limits, and providing minimal wage increases. The objective was to reduce borrowing, taxes, and interest rates in the public sector while shifting national resources to the private sector for investment. Instead of being viewed as complementary, there was a perception that the public and private sectors were competing with each other. To achieve sustained economic growth, high unemployment was considered necessary but temporary to enhance productivity and competitiveness (Salamon 1998).

Between 1979 and 1981, significant inflation in the UK had a significant impact on employees. Manufacturing employment continued its decline during this period, resulting in a total loss of 700,000 jobs across various industries and services. From 1981 to 1991, there was an additional decline of 1.5 million jobs in manufacturing employment. Energy industries, water supply, and construction also experienced downturns; however, there was growth

within the service sector due to increased female workforce participation. These changes raise concerns regarding employee-management-union relationships.

Due to changes in the workforce and decreasing union membership, trade unions have modified their recruitment strategies and negotiation approaches to include non-manual workers, women, and part-time workers. In the 1980s and 90s, the UK experienced a long period of high unemployment. Moreover, there was a notable shift in tax distribution during this time with a decrease in direct taxes such as income tax and corporation tax, while indirect taxes like VAT and excise duties increased.

Due to these changes, income distribution was skewed in favor of wealthier groups and disadvantaged those who were poorer. To handle the increased competition, numerous British firms decreased wages as a result of low productivity caused by insufficient investment. Consequently, both company actions and government social security policies played a role in increasing poverty rates. As a result, Britain has a higher level of inequality compared to most European countries. Throughout its history, the UK has grappled with inadequate investment in its population.

The participation rates in post compulsory education are low compared to other countries in Europe and our main competitors. This is also true for those who are obtaining vocational qualifications.

In the UK, almost two-thirds of the workforce does not have vocational qualifications, while in Germany this number is only 26% (Hutton, 1996).

The training boards that required industry contributions were dismantled by the Conservative government and replaced with an employer-led system. However, British industry has a poor track record in this area as it views training as an expense rather than an investment and often hires employees from competing companies.

Subcontracting experienced

a rise in the 1980's and 90's as a result of organizational changes, bringing several advantages for management. By utilizing subcontractors as a potential threat, it becomes simpler to secure workers' compliance. When larger companies outsource their work to smaller firms, they can enforce their own terms and benefit from reduced costs and increased flexibility in labor utilization. As a result, bigger corporations are able to shift the challenges of volatile product markets onto these smaller subcontracting entities.

With the election of the conservative government, a number of acts were passed in Britain to improve employee relations. The most significant act was Tebbits Employment act 1982, which invalidated many disputes that clearly dealt with industrial relation issues. Additionally, trade unions were granted 'legal personality' by removing their immunity from civil court action, allowing them to engage in various unlawful activities. Restrictions on strike actions were imposed with the introduction of closed ballets.

The conservative laws have negatively impacted individual rights at work and have had a detrimental effect on trade union organization and representation in certain situations. Conservative economic policies have been more effective in weakening unions than their legislative reform efforts. In the public sector, where the state is the employer, government policies in the past twenty years have actually increased industrial conflict (Blyton and Turnbull 1998).

The European Union (EU) has brought about significant changes for employees through the passing of the Single Market Act in 1987. The aim has been to create a fair competition environment by establishing a "level playing field." However, many countries fear that this competition may lead to lower pay and worsened working conditions. To address this concern, the EU proposed

minimum standards in the social chapter at the Maastricht agreement. While the UK chose not to participate in these arrangements, some of them have been implemented as health and safety measures.

However, the current Labour government has chosen to join the social Chapter, and its rules will be integrated into British law. Conservatives view these rules as an imposition that adds to the burden on businesses. This decision now ensures that minimum standards are established for all workers, along with equal opportunity rights. The impact of technology on job numbers remains uncertain, but it has resulted in a decrease in the need for unskilled labor in manufacturing sectors, while simultaneously generating a demand for low to semi-skilled labor in the service industry.

The impact of technology on deskilling is not well understood. Certain industries have experienced deskilling, where previously skilled workers are reduced to machine operators. Technology, especially information systems, has also led to increased integration across different stages of production. This has allowed companies to minimize inventory and adopt just-in-time systems. However, these systems have consequences for both employees and employers, as they require careful management of production and delivery flows.

Consequently, employee relations rely on the active co-operation of employees, granting them potential power in the situation. The primary factors behind these changes are economic and political factors, legal factors, influences from the European Union, and technology. Post-war economic problems in Britain, with an emphasis on improving the future for the majority, resulted in inflation.

The conservative government led by Margaret Thatcher attempted to address this issue by changing the economic policy focus from employment to inflation. As a result, deflation, unemployment, decreased trade union influence, and

wage cuts ensued. This ultimately left workers with lower income, fewer rights, and reduced union representation. The conservative government enacted multiple policies that shifted power from employers to employees, including the introduction of the employment acts under Tebitt aimed at enhancing employee relations.

The EU initiated various changes in working conditions and equal opportunities, which were initially rejected by the conservative government but later implemented by the labour government. Additionally, it introduced heightened competition for the British industry, forcing organizations to adapt to stay competitive. The technological advancements associated with globalization and the competitive advantage of European companies led to a decrease in demand for skilled workers in Britain, particularly due to the introduction of just-in-time systems.