Hrm 603 major assign

Name: Cagi Merelita

ID No.: 2011001230

HRM 603: Comparative Studies

of Industrial or Employment Relations

Major Project

Trimester 3

2013

Table of ContentsIntroduction...............................................................................................................1

Key features and processes of ER/IR system of the three countries.........................4

Structures and roles and relationship.........................................................................6

Role of Trade Unions in each country.......................................................................7

The role of the State in each country.........................................................................8

The role of Employers Association...........................................................................9

Labour market philosophies....................................................................................10

Labour legislations or Laws....................................................................................11

Legal framework (collective or individual).............................................................13

Recent Trends/ Changes..........................................................................................14

Conclusion...............................................................................................................15

2Cagi Merelita2011001230HRM 603Tri 1, 2013

IntroductionEmployment Relations can be defined as the study of the rules and rule – making processes that

regulate the employment relations (Bray, Waring, & Cooper, 2009). It was further noted by

(Bray, Waring, & Cooper, 2009) that at the core of Employment relations, are different views

about the most effective way to manage the relationship between an organization and its

representatives, the managers, and employees and their representatives. This is evident, as

(Devereaux & Moore, 1995) defined employment relationship as the “set of all relations and

supporting institutions between employees and employers (Flanagan et al., 1989)”. This is all

summed up by (Sagoa, 2013) who noted that; Industrial relations is a multidisciplinary field that

studies the employment relationship and it explores the relationship between employers and

employees, employers and trade unions, their relationship with the state and other stakeholders,

with industrial relations being increasingly called employment relations because of the

importance or significance of non- industrial or employment relationships.

Historically, the British system was heavily indebted in the Australian system. According to

(Sagoa, 2013) , the British system of employment was a collective bargaining one which was

adversarial as supposed to consensual by nature, with the system encompassed a well -

developed trade union movement which was primarily craft as opposed to industry based union.

This system was significant in terms of the development of other employment relations systems,

such as Australia. Since the 1960s, ‘tradition voluntarism’ has been weakened by the increasing

legislative intervention of the state, particularly since the election of the Conservative Party in

19701.

It was further noted by (EIROnline, 2009) that; the system of industrial relations in the United

Kingdom (UK) is traditionally characterized by voluntary relations between the social partners,

with a minimal level of interference from the state. In the context of very early industrialization

1 Sagoa, I. (2013, January 4). Industrial or Employment Relations in the United States; Industrial or Employment Relations in

Great Britain. HRM 603: Comparative Studies in Industrial or Employment Relations. Suva, Nasinu, Fiji: Fiji National University

Nasinu Campus.


and a liberal political culture in which the state seldom intervened in the affairs of private actors,

trade unions gradually consolidated their membership and power base throughout the 19th

century. Various legislative developments also allowed trade unions the right to organize

workers and engage in industrial action. The economic context throughout this time was also

favorable to the development of trade unionism. Owing to the pace of industrialization and the

existence of substantial colonial markets for UK industry, the 19th century and early 20th

century were characterized by extensive economic growth. This economic climate facilitated the

development of a system in which some of the fruits of economic development could be

designated for collectively bargained wage increases. In terms of the role of the law, collective

bargaining was far more important than the influence of legal regulation. For employers and

trade unions, the role of statute law was to support and extend collective bargaining rather than

to comprehensively regulate the system. Notably, the law provided trade unions with a series of

‘immunities’ from UK common law.

Historically, Australia’s employment relations system can be traced back to the period of the

Second World War when manpower shortages and the demands of the war effort required the

smooth assimilation of a large number of women into the workforce, many in very non –

traditional roles (Cochrane, 1985)2. Politically, the Australian system is heavily indebted to the

British system. According to (Shelton, 1995), “recent changes in the international economic

standing of Australia have created an ‘economic crisis’ mentality, that is having a last impact on

business and politics in this country, as the government in the late 1980s, recognized the

importance of human resource management in its effort to restructure industry and promote a

more productive business environment”.

Economically, (Shelton, 1995) noted that, the international economy has changed in recent times

especially since the 1980s; the Australian governments have changed their strategies on how the

domestic economy should respond to international developments. Australian economic

development has always been strongly affected by its place in the international political

economy.2 Shelton, D. (1995). Human Resources in Australia. In L. F. Moore, & J. P. Devereaux, Human Resource Management on the Pacific

Rim: Institutions, Practices, & Attitudes (pp. 31-35). New York: Walter de Gruyter.


(Shelton, 1995) further noted that the “Australian economy during the nineteenth century, was

very open to international force, however, their economy remains highly dependent on its mining

and agriculture industries, despite these industries employing a mere 5% of the total workforce,

and has generally experienced strong economic growth from the 1980s to 2007, with the

exception of a sharp downturn in 1990 – 91”.

When compared to the background of Australia, United States of America, human resource

management according to (Devereaux & Moore, 1995), “is at the turn of this century appears to

be in a state of transition, whether viewed by human resource specialists or industrial relations

theorists”. This is supported by (Sagoa, 2013) , who noted that the persistence of economic

pressure that first challenged American industry in the 1970s continues to reshape US industrial

relations, with an effort to maintain their competitiveness, US firms have developed panoply of

strategies ranging from confrontation and labor control to collaboration and employee

empowerment. Furthermore, globalization of markets, rapid technological changes, shorter

product – life cycles and shifts in consumer preferences have increased the pressures on US

firms.

According to (Devereaux & Moore, 1995), the “modern employment relationship in the US

began in the mid – 1800s with the advent of the mechanized factory, which required the

availability of more unskilled and skilled labor on a longer term, reliable basis (Chandler, 1962;

Dobbin, 1992; Jacoby, 1985)”.

(Schneider & Stepp, 2006) noted that “employee involvement was first promoted in the late 1960s

and 1970s as an antidote to growing disaffection with the industrial workplace”. Moreover,

(Kaufman, 2006) added that, “…..after the field’s early ideas were adopted as public policy and

workers secured some protections at work – through laws and unions-difficulties and differences

emerged”.

Therefore, this assignment will compare and contrasts the main features of

Employment/Industrial relations between Great Britain, US and Australia, with usage of

examples.


Key features and processes of ER/IR system of the three countries

According to (Sagoa, 2013), the key features of the system in Britain are; the influence of the

Conservative Government since 1970 on the pattern of employment relations in Britain, the

effect which political climate has on Trade union density, the decline in collective bargaining

and the change in the level at which the such bargaining is occurring, the extent to which Human

Resource Management policies are being pursued by British Management, the view of authors/

scholars with regards to the transformation of British employment relations and the influence of

European Union and the effect of change in government on the future direction of employment

relations.

Furthermore, (Sagoa, 2013) noted that the key features in the United States Industrial Relations

systems. He noted that there is a “three- tier structure of industrial relations in the United States

which are economy, sectoral, and company/establishment bargaining, and local unions deal with

the daily interaction with employers at the workplace”. However, (Sagoa, 2013) further noted

that “……there has been a change in the shared ideology among the three players (employers,

trade union and government) since the 1980, with the employment having moved from

manufacturing jobs and other jobs that have traditionally been represented by unions to more

service and high technology jobs, and employers have learned that using positive human

resource management practices. Finally, in the past several the governments has increasingly

provided for the protection of workers’ rights by passing a variety of legislative actions”.

Moreover, the Australian key features of the system in Australia are, according to (Sagoa, 2013),

the Australian employment relations have moved from centralized to decentralized regulation of

work, from awards and collectively negotiated agreements to individual contracts of

employment, from full-time, permanent and continuing jobs to contingent forms of work and

from a pluralist system of employment relations to a unitarist approach in which collective forms

of worker representation are diminished.

Therefore, when comparing the key features of each of the countries, the similar key features, are

the significant legislative, structural changes, with declines in union density and power, increase

in non – standard forms of employment. However, Great Britain and United States both have a


centralised system of industrial relations, whereas Australia, is trying to move away from a

centralised system to a decentralised system.

According to (Sagoa, 2013), the voluntary system characterized by the British industrial relations

system for most of the 20th century, at its heart was a policy of relative legal abstention, with

primacy to – and support for –regulation through collective bargaining, as the regulation of

employment relationship by means of collective bargaining between employers and unions

(including multi – employer level) was far more important than legal regulation through Acts of

Parliament, where statutory law intervened, it did so to support and extend the collective

bargaining and to plug gaps, its coverage and protection.

However, the coverage of collective bargaining in Great Britain has shrunk, as union

membership and density, particularly in the private sector (Sagoa, 2013). This was further

supported by (EIROnline, 2009) who noted that, “collective bargaining has become far more

decentralised since the 1970s and 1980s”. But when compared to Australia, according to

(Shelton, 1995), “The view of union movement is that Australian Workplace Agreement

(AWAs), are an attempt to undermine the collective bargaining power of trade unions in the

negotiation of pay and conditions of their members”. Whereas, in the United States, according to

(Sagoa, 2013), collective bargaining effectively sets and regulates the broad, middle tier of the

wage distribution and employment conditions.

Therefore, it can further be said that collective bargaining is used by all the three countries as a

means to settle disputes in workplaces, and the outcome of the negotiations both are benefited by

the employers and its workers.


Structures and roles and relationship

The structure of employment has changed radically in recent years (Sagoa, 2013). This statement

is true as over the years, the countries, Australia, Great Britain and United States developed

economically, with the increase in supply and demand for labor. According to (Sagoa, 2013)

Australia’s structure of employment changed radically, that is, there is a decline in full – time

permanent employment, with the expansion of various forms of non – standard employment

(such as casual work, temporary jobs, outsourcing and use of agencies and other labor market

intermediaries). (Moriguchi, 2000) noted that, in the U.S. employment system, explicit and

elaborate employment contracts in large manufacturing firms were reinforced by the well-

developed legal enforcement mechanism provided by the state; at the same time, as more firms

in the economy relied on explicit contracts, the state’s return from providing a legal system to

enforce such contracts became higher.

(Huebsch, 2013) added that in the United States of America; the history of the labor-management

relationship started in the mid-1860s with the Industrial Revolution. Mass migration of workers

from rural to urban areas led to a surplus of labor, and tough competition between factories. In

general, few laws existed to protect workers, and employers focused on cutting costs rather than

the care of their personnel. Companies often fired workers for taking part in union activities. The

first national union, the Knights of Labor, dominated labor-management relations by organizing

political actions and conducting arbitration with companies on behalf of workers.


Role of Trade Unions in each country

The role of trade unions has changed significantly over the past thirty years (Wright, 2011).

Trade unions have a number of functions, some of which have been more prominent than others

at different periods in history, but, over the course of time trade unions have developed five

principal functions (Ewing, 2004). (Ewing, 2004) further noted that “the five developed

principal functions are a service function; a representation function; a regulatory function; a

government function; and a public administration function”. According to (WikiAnswers,

2013), there are nine main functions of a trade union which are; collective bargaining with the

management to settle terms and conditions of employment, advise the management on personnel

policies and practices, taking up the individual and collective grievances of the workers with the

management, work for achieving better say of workers in the management of affairs of the

enterprise which influence the lives of the workers directly, organising demonstrations, strikes,

etc, to press demands of workers, education of workers and their children, welfare and

recreational activities of their members, representing of workers in various national and

international forums, and securing legislative protection for workers from the government.

The main service a union provides for its members is negotiation and representation. According

to (Margetts, 1998), most ‘collective bargaining’ takes place quietly and agreements are quickly

reached by the union and the employer. The establishment of conciliation and arbitration systems

encouraged the rapid growth of Australian unions and, to a lesser extent, employer association

(Sagoa, 2013). According to (Shelton, 1995), in Australia, unions may acquire the status of a

legal entity (known as collective bargaining) over wages, working hours and other terms and

conditions of employment. In Great Britain, it has been noted by (EIROnline, 2009), “……trade

unions in different companies and sectors often share information with one another…”


The role of the State in each country

According to (Devereaux & Moore, 1995), the role of the state has become more important than

the labour may having to lose power to management. Overall, the role of the state is to establish

laws such as Safety regulations and to also provide financial aid to businesses, that contribute to

the economy of a country, in order to keep the economy afloat (Rollinson, n.d.).

Until the 1950s there was probably no other industrialised country in the world where the State

was less interventionist in terms of its employment relations laws than Britain (Rollinson, n.d.).

However, the pace of State intervention has accelerated significantly since the end of the Second

World War, first during the 1960s and 1970s and then again in the 1980s; further interventions

by the State during the new millennium have altered the employment relations landscape in

Britain even more (Rollinson, n.d.). As a result, it is now probably fair to say that individual

employment laws, rather than voluntary collective bargaining agreements, regulate working

conditions in Britain (Ewing, 2003), which has had a huge impact on the behaviour of managers,

trade unions and employees (Rollinson, n.d.).

Overall, it can be summarised as, according to (Sagoa, 2013), the key roles of the state in the

industrial relations or employment relations context are; provision of institutional framework

where the general aim of the state is to provide for the bilateral relationship between the

worker/trade unions and employers/their representatives, provision for collective bargaining

where the state provides the general alternative mechanism for settling general terms

employment by non-political means, limiting or avoiding industrial conflicts where in all

developed nations, the state tries to avoid or limit collective industrial conflicts, and

interpretation of conflict of right and interest where clear distinction is and collective conflict of

interest which are solved peacefully between the parties.


The role of Employers Association

(Sagoa, 2013) noted that for the role of employer’s association are to provide advice, support and

training to members on industrial relations, and a wide range of employment or work related

matters. An employers association could also be described as (EIROnline, 2009) noted, as a

counterpart to a trade union in that it organises employers and represents them in collective

bargaining, offers them specialist advice and services and represents them before certain bodies

such as the Employment Appeals Tribunal of the Labour Court.

For Australia, most employers Association were vocally supportive of Work Choices legislation,

with some bodies even funding pro- Work media advertisement (Sagoa, 2013). Whereas in Great

Britain, the role of the employers’ association according to (EIROnline, 2009), is for the

purposes of negotiation with trade unions or to provide affiliated employers with industrial

relations advice and assistance.

Therefore, overall, the employers’ association roles in each country are slightly similar, as they

negotiate industry –wide, multi-employer collective agreements with trade unions (EIROnline,

2009).


Labour market philosophies

According to (Bray, Waring, & Cooper, 2009); the public policy relevance of employment

relations in Australia is long – running and unidentifiable – the controversy over the introduction

and operation of the 2005 Work Choices legislation is only the most recent example of

employment relation contributing a defining issue on which governments and oppositions differ

and on which governments rise and fall.

Unemployment rate are one of the factors that contribute to the rise and fall of the government.

According to (Fontes & Fedec, 2013), unemployment Rate in the United States decreased to 7.60

percent in March of 2013 from 7.70 percent in February of 2013 as reported by the Bureau of

Labor Statistics. Historically, from 1948 until 2013, the United States Unemployment Rate

averaged 5.81 Percent reaching an all-time high of 10.80 Percent in November of 1982 and a

record low of 2.50 Percent in May of 1953. In the United States, the unemployment rate

measures the number of people actively looking for a job as a percentage of the labour force.

When compared to United States, Australia had the unemployment rate which remained

unchanged at 5.4 percent and had been on the upward trend since reaching 4.9 percent in June of

2012 (Fontes & Fedec, 2013), whereas as also added by (Fontes & Fedec, 2013), Great Britain

had the unemployment rate that is at 7.8 percent up from a year low of 7.7 percent. Therefore,

Great Britain and United states had approximately the same percent of 7.7 percent

unemployment rate.

America had the polarization of the business community and organized labour over the basic

provisions of American labour law has accompanied and contributed to the decline in trade union

membership.


Labour legislations or Laws

Studying notes written by (Sagoa, 2013), it is evident that in the country Australia has a

federation where it is a system of government with a central federal government and six regional

governments, where the role of the state is to only making laws in relation to industrial relations.

However, in 2005, the Howard Liberal government, according to (Sagoa, 2013), amendments

made to the Work Relations Act 1996 were to remove the state control of industrial relations.

According to (Sagoa, 2013), a period of Conservative Government from the year 1979 to 1997

under Mrs. Thatcher and then Mr. Major saw a radical break with voluntarist tradition of British

industrial relations, but the post 1997 Labour government had taken a different approach to that

of its predecessors regarding the role of legislation in regulating employment relations. However,

the voluntary system characterized by British industrial relations for most of the 20th century,

where at the heart of the policy of relative legal abstention was the regulation through collective

bargaining. Furthermore, in the post 1997 legislative agenda, according to (Sagoa, 2013), the

National Minimum Wages (NMW) was introduced in April 1999 and legislation which regulates

work time and leave from 1998 with, legislation on Trade Union recognition procedure being

effective from the year 2000.

According to (WikiAnswers, 2013), United States labor law is the body of law that mediates the

rights and duties of workers, employers and labor unions in the United States of America.

Federal laws, such as the Fair Labor Standards Act, the National Labor Relations Act and the

Occupational Safety and Health Act set the standards that govern workers' rights to organize in

the private sector, and override most state and local laws. Usually more limited rights for

employees of the federal government, but not state or local governments, where workers derive

their rights from state law (WikiAnswers, 2013). The pattern is even more mixed in the area of

wages and working conditions. Federal law establishes minimum wages and overtime rights for

most workers in the private and public sectors; state and local laws may provide more expansive

rights. Similarly, federal law provides minimum workplace safety standards, but allows the states

to take over those responsibilities and to provide more stringent standards.


Finally, both federal and state laws protect workers from employment discrimination. In most

areas these two bodies of law overlap; as an example, federal law permits states to enact their

own statutes barring discrimination on the basis of race, gender, religion, national origin and age,

so long as the state law does not provide less protections than federal law would. Federal law, on

the other hand, preempts most state statutes that would bar employers from discriminating

against employees to prevent them from obtaining pensions or other benefits or retaliating

against them for asserting those rights (WikiAnswers, 2013).


Legal framework (collective or individual)

For Great Britain, since the employment tribunal was set up in the year 1964, individual statutory

employment rights were enforceable via Employment Tribunal, however, there is no provision

for class action against one employer (Sagoa, 2013). However, since 1979, there has been no

thorough exploration of how employment disputes might be best dealt with, but the system

favors individuals to enforce their rights where focus is advocated less on providing individual

redress for breaches of rights, more about providing the kind of workplace where breaches is less

likely to occur (Sagoa, 2013).

However, Australia had changes that were introduced in 1993 by the Keating Labor government

in the form of the Industrial Relations Reform Act 1993, allowed federal non-union collective

agreements to be certified for the first time with incorporated a limited right to protected

industrial action during a designated bargaining period (Sagoa, 2013).

America has a collective framework of industrial relations (EIROnline, 2009), where the federal

and state laws provide legislations to govern labor relations (WikiAnswers, 2013).


Recent Trends/ ChangesThe most critical changes revolve around the role of the government actions in the workplace

(Devereaux & Moore, 1995). For the country United States some major changes faced are,

according to (Devereaux & Moore, 1995), “managers revolve around the characteristics of

workers, with more women joining the workforce, as well as minorities, causing adjustments in

the traditional expectations”. In addition, (Devereaux & Moore, 1995), further noted that due to

the demographic changes in the profile of workers is the lack of workers with requisite skills and

productivity, compared to workers in industrialized countries. Moreover, in United States the

role of the government was to establish rules for an orderly process in which workers would

duly: elect individuals to represent them in a collective negotiation with employers, over wages,

hours, and working conditions, finally, the extensive degree of experimentation with employee

participation, work organization, and human resource practices in both union and non union

setting has further tested traditional patterns, but these conflicts and experiments have occurred

primarily in the private sector, with government sitting on the sidelines as a seemingly

uninterested observer (Sagoa, 2013). However, according to (Sagoa, 2013), during Clinton’s

administration, the labour market and workplace policies were put back on the national agenda

For the Australian employment relations system, (Sagoa, 2013) noted that some changes are;

previously the regulation of work and employment are that a long tradition of centralized

regulation of wages and conditions through awards and agreements in the Australia Industrial

Relations Commission, at both the industry and national level. However, over the past decades,

the reduction in the scope of the Commission’s jurisdiction to conciliate and arbitrate award

matters with encouragement of individualized agreements between workers and employers at the

enterprise level. Added to this changes is that, previously, predominantly permanent, full-time

forms of employment with hours regulated by awards and collective agreements, however, over

the past decades, almost half of the workforce now employed in jobs which are casual, part-time

and/or fixed contract.

When compared to Australia and United States, for Great Britain, (Sagoa, 2013), highlighted that

some of its changes are, the retreat from collective bargaining, voice, high involvement of

Human Resource Management (HRM), contingent pay, upheaval in the public sector and legal

regulation.14

Cagi Merelita2011001230HRM 603Tri 1, 2013

Conclusion

The purpose of this assignment was to explore the origins of the distinctive employment systems

that emerged in the U.S. Australia and Great Britain, and to develop a theory which provides a

consistent explanation for the institutional developments for both countries since the beginning

of this century. The main findings and interpretations provided by the comparative historical

analysis can be summarized as follows.

At the beginning of the twentieth century, in spite of the underlying differences between the

three countries’ cultural traditions, political regimes, and the stages of industrialization,

employment relations in large American, Australian and Great Britain manufacturing firms were

similar in the following aspects. Employment contracts were simple, short-term, and

individualized, and “employment at- will” was a prevailing principle in both societies. There

were highly competitive labor markets in which wages were determined by general skills and

experience. Production workers, skilled or unskilled, frequently moved among factories seeking

higher wages and better working conditions, implicit, long-term employment contracts and

company-wide unions under a new legal framework, with some important modifications. In

particular, blue-collar workers achieved a higher economic and social status within firms during

the process of democratization (Wright, 2011).


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Sagoa, I. (2013, January 23). Introduction: An overview of Industrial or Employment relation in global context. HRM 603: Comparative Studies in Industrial or Employment Relations. Suva, Nasinu, Fiji: Fiji National University Nasinu Campus.

Schneider, T. J., & Stepp, J. P. (2006). The Evolution of U.S. Labor - Management Relations. Restructuring Associates Inc.

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Hrm 603 major assign