In Colloboration with

6518YPCBSC
STRATEGIC HRM
Lecture 8:
Employment Relationship
Learning Outcomes
By the end of this session, you should be able to:
❑ Define Employee Relations and the key players in the employment
relationship.
❑ Evaluate the complexity of relationships between various
stakeholders in employment relations.
❑ Discuss the importance of strategic integration of employment
relations and the role of HR, Line managers and Trade Unions.
What is Employee
Relations (ER)?
▪ Employee relations is the term used to describe the
relationship between employers and employees.
▪ Today’s interpretation of employee relations refers to
individual as well as collective workplace relationships.
▪ It reflects the increasing individualization of the employment
relationship following the rise of individual workplace rights
and the historical decline in trade union reach and
influence.
▪ In line with this focus, there’s an increasing emphasis on
helping line managers to establish trust-based relationships
with employees.

CIPD 2021
Employment Relations and the
Legal Context
Gennard & Judge (2016)
– An employment relations system at any level consists of
actors, their institutions, and government agencies, and
is set within its own economic, legal, social and
technological environmental context.
– Changes in this corporate environment impact on the
balance of bargaining power between the employers and
employees and on the employment relations policies
adopted as a result by an organization.
– We recognize the of employment relations in non-union
environments as well relevance as in unionized ones.
So what does this look like in practice?
‘Employee relations’ covers the contractual, practical, as well as the
physical and emotional dimensions of the employee-employer relationship.
▪ The term employee relations is also used to highlight the efforts an
organisation – or the HR department makes to manage that relationship.
These efforts are usually formalised in an employee relations policy or
programme.

ER is a crucial factor when it comes to overall organisational

performance. Why?
▪ Because good employee relationship management translates into
increased employee wellbeing (and performance).
▪ And, since employees are the engine of any organisation, you want to
make sure that both employer - employee relations are well-maintained.
Key actors
Employees,
Employers and managers representatives and The State
unions
• 80% of employees work • 6.4 million union • Largest employer,
in SMEs members in 2014 legislator and economic
• Highly personal and compared to 13 million manager
informal employment in 1979 • Key agencies: Acas,
relations • Shift from CAC, Certification
• Larger organisations – representation over Officer
views of managers tend collective to individual
to cohere with owners issues
• Limited non-union
representation
Interests in employment relations
Employee Employer The State
Employment Profit maximisation Power
Income Shareholder value Economic growth
Fairness Stakeholder interests Ideology
Voice Quality and service Continuity
Job satisfaction Employee engagement
Occupational identity Creation of employment
Autonomy Control

(Adapted from Budd and Bhave (2008))

Different approaches to the
study of employment relations

There are three distinct ideological perspectives to origins and

nature of industrial relations, each leading to a distinct
approach/analytical tool to explain industrial relations:
▪ a Pluralist perspective, leading to ‘neo-
institutional’(new institutional) approaches (institutional
structures, rules, norms, choices and culture)
▪ a Unitarist perspective, which informs human resource
management (HRM)
▪ a Radical perspective, which enables a ‘labour
process’ approach.
Different approaches to the study of
employment relations (cont…)
A pluralist perspective
First, what is the pluralist perspective?
▪ Conflict is inevitable: competing interests between the parties.
▪ Power is diffused among the main bargaining groups within the employment relationship: no-one dominates.
▪ Trade unions are viewed as providing a mechanism that legitimates employees’ rights to bargain within the workplace.
▪ The state is regarded as an impartial entity, whose primary function is to protect the ‘public interest’.
▪ Pluralism focuses more on compromising and collective bargaining as it recognizes different interests within sub-groups can
cause conflict, primarily between the management and trade union.
▪ Pluralism recognize the importance of conflict and negotiation. Cradden (2011) emphasize that companies that utilize
this practice values negotiation and coming to an agreeable resolution that benefits both the employees and employers
equally.
▪ This limits the employer’s authority or any misuse of power toward the employee. A major limitation of this approach is
the power and control that managers possess.
Different approaches to the study of
employment relations (cont…)
A Unitarist perspective
▪ The unitarist approach consists of all members sharing the same interest and
being homogenous.
▪ Third parties are viewed as irrelevant as employees and employers have a mutual cooperation.
▪ Unitarism consist of management and staff members sharing a common goal, through their loyalty towards
the organisation (Fox, 1966).
❑ Organisations consist of people with common aims
❑ No conflicts of interest between managers and their subordinates
❑ Strong leadership required to achieve common purpose
❑ Single source of authority
❑ Trade unions illegitimate intrusions into the right to manage
▪ Companies who use this approach depends their workplace on strong sense of cooperation between the
employer and employee, which allows workers to focus on the primary aim (Wood and Elliot,1997)
What is the
Difference
Between
Unitarism
and
Pluralism?
Different approaches to the study of
employment relations (cont…)
A Radical Approach

▪ The radical approach to HR suggest that employs and employers are bound to
have conflict due to the result of capitalism.
▪ This practice focus on the idea of control as most important, to the industrial
relations and the employment relationship (Wood & Elliot, 1997).
▪ Trade unions are used to protect the rights of the employees by maintain and
improve the workers’ terms and conditions.
▪ Although, most managers are drawn to this concept, some major drawbacks
include the potential of inequality of power towards the employers.
▪ Thus, the radical approach consists of both benefits and limitation towards the
employment relationship.
Advisory,
Conciliation and
Arbitration ▪ The Advisory, Conciliation and Arbitration Service (Acas) aims to improve
Service (acas) organizations and working life through better employment relations, working
with employers and employees to solve problems and improve performance.
▪ Acas is an independent public body (an executive non-departmental public
body sponsored by the Department for Business and Trade, Britain) that
receives funding from the government. They provide free and impartial advice
to employers, employees and their representatives on: employment rights,
best practice and policies and also offer training and help to resolve disputes.
▪ Acas work with millions of employers and employees every year to improve
workplace relationships. They an independent public body that receives
funding from the government.
Central Arbitration Committee
(CAC)
▪ The Central Arbitration Committee is a permanent independent body with
statutory powers. Its main function is to adjudicate on applications
relating to the statutory recognition and de-recognition of trade
unions for collective bargaining purposes.
▪ The Act permits trade unions to apply to the Central Arbitration
Committee (CAC) for the legal right to be recognised by the employer on
behalf of workers in a particular bargaining unit.
❑ Handling applications for trade union recognition and derecognition.
❑ Adjudicating complaints from a trade union that an employer has
failed to disclose information for collective bargaining purposes.
❑ Resolve disputes over the establishment and operation of European
Works Councils.
❑ Resolving about the establishment and operation of information and
consultation arrangements.
Certification officers
Responsibilities are to:
▪ Maintain a list of trade unions and employers’ associations
▪ Ensure compliance with statutory requirements for annual returns from trade unions
and employers’ associations and keeping them available for public inspection.
▪ Determine complaints concerning trade union elections, certain other ballots and
certain breaches of trade union rules.
▪ Ensuring observance of statutory requirements governing mergers between trade
unions and between employers’ associations.
▪ Oversee the political funds and the finances of trade unions and employers’
associations.
▪ Certify the independence of trade unions act as the ‘prescribed person’ under the
Public Interest Disclosure Regulations 2014, so that workers or employees of trade
unions and employers' associations are protected if they report fraud or financial
irregularities (whistleblowing) to the CO.
Role of Trade Unions - collectivism
▪ Collective relationships typically involve groups of employees and often involve
trade unions like Unison, Unite, GMB etc and an individual employer or group of employers.
▪ The body that represents trade unions in this country at a national level is the Trades
Union Congress (TUC). The body that represent employers collectively is the Confederation
of British Industry (CBI).
▪ Trade union representatives help to ensure the smooth running of industry.
• Wherever people work or meet together, disputes and grievances will occur, and in industry the problems of new technology,
complicated payment systems and work that lacks stimulation are bound to create dissatisfaction.
• Many of these everyday problems are easily dealt with by meetings, discussion and bargaining.

▪ Collective bargaining involves representatives of employers and employees getting together to discuss and
bargain.
• The HR Manager and a representative of each trade union at a place of work will meet on a regular basis to discuss issues.
• Most collective bargaining over major issues, however, involves inter-party negotiations.
• These can range from fairly small groups on each side of the bargaining table to over 20 representatives from management
and a similar number from different trade unions.
• It is important to remember that talk and discussion is the major tool of employment relations.
Role of HRM in the employment
relationship
When it comes to employee relations, an HR department has two
primary functions.
▪ First, HR helps prevent and resolve problems or disputes between
employees and management.
▪ Second, they assist in creating and enforcing policies that are fair
and consistent for everyone in the workplace.

Employee relations focuses on:

❑ Working conditions and employee safety
❑ Pay and benefits
❑ Work-life balance
❑ Rewards and recognition
❑ Collective bargaining
❑ Employee voice
❑ Workplace conflict
 Role of line managers in the
employment relationship
Line managers sit at the heart of the relationship between the employer
and the employee and if this is flawed then it can lead to serious problems.
CIPD …. “Managing the employment relationship rests heavily on the shoulders of line managers,
but their competence in this area is, in general, seriously neglected.”
• Line managers manage employees and
are responsible for the team
development and performance. ▪ Developing strong employee relations within an organisation is increasingly important
• A line manager will be one position above
and it is crucial to remember that creating this is no longer the sole responsibility of
the employees they manage.
• They will carry out additional
the HR team.
responsibilities like overseeing their team’s ▪ Despite more being asked of line managers, investment in essential training and
day-to-day tasks but will often work on
similar tasks and projects as those they development for them is all too often neglected and they are not adequately prepared
line manage too. for the situations and issues that they will have to deal with in their position.
• Depending on the business or industry, line
managers might also be called team ▪ Good line managers are be able to manage conflict, resolve problems and
leaders or supervisors. understand employees’ feelings whilst influencing and motivating employees on a
daily basis in order to meet the demands of their employer and company objectives
and this is no mean feat.
Employee relations best practices
1. Honest communication
▪ It’s crucial to communicate openly with your employees since good and honest communication
is the foundation of your relationship with them.
▪ Share organizational updates with your team and build a relationship in which no one is afraid to
speak up or ask questions. Part of this communication should be about sharing the company’s vision.
2. Get your team behind the vision
▪ This one consists of two parts. The first part is about making sure you frequently share – and communicate, there it is again – the mission
and vision of the company.
3. Trust your people
▪ In other words: don’t micro-manage. Once you’ve made sure that people know what they need to do, what’s expected of them, and that
you’re there if they need you, let them be. Trust them.
4. Recognition & appreciation
▪ No less than 76% of employees who don’t feel valued at work are looking for opportunities elsewhere.
▪ Showing your employees, you care and giving them recognition is key in building strong employee relations.
5. Invest in your people
▪ Showing people, you care and building strong employee relations also means investing in them.
 References
• ACAS. (2014) Reframing resolution – managing conflict and resolving individual employment disputes in the
contemporary workplace. London: Acas.
• Aylott, E. (2018) Employee relations: a practical introduction. 2nd ed. HR Fundamentals. London: CIPD and Kogan
Page.
• Bennett, T., Saundry, R. and Fisher, V. (2020) Managing employment relations. 7th ed. London: CIPD and Kogan Page.
• Cradden, C. (2011). Unitarism, Pluralism, Radicalism… and the rest?. Université De Genève, 36(8), pp.1-22.
• Fox, A. (1966). Managerial Ideology And Labour Relations. British Journal of Industrial Relations, 4(1-3), pp.366-378.
• Fox, A. (1974), Beyond Contract: Work, Power and Trust Relationships, Faber and Faber, London
• Saundry, R., Fisher, V. and Kinsey, S. (2019) Managing workplace conflict: The changing role of HR. London: Acas.
• Saundry, R. and Unwin, P. (2021) Estimating the costs of workplace conflict. London: Acas.
• Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles
• Gordon, L. (2020) The legal consequences of getting employee relations wrong. People Management (online). 10
January.

• Kaufman, B.E. (2014) History of the British industrial relations field reconsidered: getting from the Webbs to the new
employment relations paradigm. British Journal of Industrial Relations. Vol 52, No 1, March. pp1-31.

• Ross, C. (2013) New unions in the UK: the vanguard or the rearguard of the union movement? Industrial Relations
Journal. Vol 44, No 1, January. pp78-94.
Activity
In Company X, the recognised trade union had given a proposal to management for a 15% increase in wages. There is an established
collective bargaining process in place and negotiation are going on.
The Operations Manager is in attendance at the collective bargaining meeting, he presents Company X’s current poison to the trade
union as to why their proposals for a 15% pay increase is not a viable proposal. He asked the trade union to reconsider their proposal
to find an agreeable solution. This is what he presented to the union:
• The input prices (cost of raw material, electricity, water etc) have increased by 10 %.
• Due to competition Company X has to reduce the product price by 10%.
• At the same time the shareholders are also expecting 5 % more returns from the existing 15 % and employees are expecting
their annual bonus of 2%.

Tasks for the participants:

1. Given that the Operations managers has provided reasons why the proposed pay increase of 15% is not viable, what
options could be considered to work towards an agreeable solution, relating to the three points raised in his presentation?
I. Increase in input cost
II. Reduce product price
III. Shareholder and employee expectations
2. What issues should the HR Manager consider to ensure that the negotiations remain open and positive?