Employment Relation (ER) has various dynamics and not exists in vacuum and isolation. Different interrelation and mutually overlapping environmental factors are responsible for it. Employment relations and legality of it is compared to understand the true meaning of relationship. Wider context of environment changes like political, economical, technological and social are related to understand the ER. In each area various case study and examples are given from secondary search or personal examples. Finally conclusions are drawn based on the discussion.
Meaning of Employment Relation (ER)
Gospel and Palmer, 1993 defines the term Employment Relationship, " an economic social and political relationship in which employees provide manual and mental labour in exchange for rewards allotted by employers".
The definition includes key areas in which such relationships exist between an employer and employee. In different forms different hierarchy level of organisation the nature of relationship differs. The type of organisation where relationship exist differ as in case of not for profit organisation the employee will be casual and service oriented where as in case of profit oriented organisation employee is more concerned about financial gains and financial benefit can be main concern of relationship. Employment relations affected by the length of the service put in and nature of job performed by an employee. Power is key dimension in the relationship. Powerful employee union shift the pendulum towards employees and relationship can go long time and under the focus of legal regulations.
The relationship in highly competitive IT sector will be employee's commitment to learn new technology and upgrade him for wider challenges in the job market. Employees commitment and knowledge of specific skills place than much higher than manual labour working in farm or construction industry. The location of the business operation also has different relationship among employees and employers. A group of employee working in extreme tough conditions say in a Business unit working at a height of ten thousand metres from sea level will show very positive comradeship among them rather than other unit e working in a plain area and with no hazard to life. Employees working from home or employees put in more hours at job in office or factory will show entirely different dimension to employee relationship. Financial and non-financial rewards can also affect the relationship to a greater extent. Organisation who are poor paymasters generally have problem of labour turnover and poor relationship among employees and employer.
The definition has included varied dimension to call a healthy relationship. For any interactive and healthy relationship reciprocity is needed. The relationship works on political scenario and legal rules and regulation and also on economic consideration. Societal values also determine the relationship between employer and employees. In a democratic set up freedom of trade union brings balance where as in some countries such freedom is not there and it is witnessed in the relationship also.
Legal Contract of Employment and Relationship
In a brief basic elements of contract act will be highlighted to understand the legal dimension in the relationship. A formal contract is created with an offer of employment made and accepted to employee of services and for services. Legally there is difference between employees who work under a contract of service, as they are employees where as those who have contracted for services considered being self-employed.
An employee who is under the contract of employment is supposed to have many rights of employee. The rights are statement of terms and conditions of employment, detailed pay statement, statutory leaves and right to be part of trade union. They also have a right to be protected against unfair dismissals and redundancy payments. Government introduce and declare benefits such as parental leave, maternity leave, and flexible working hours also covered under employment contract.
Employee should get a written statement of contract as per UK employment rights Act 1966 and should disclosed material facts about employment. The contract should have information about term of employment, incremental payment structure, and hours at work, holidays and leave arrangements. It should further include sickness and medical benefits, pension or gratuity benefits, length of notice, disciplinary rules and comprehensive grievances procedures to enlist.
Employees should be further entitled to neat and tidy working condition. In some contracts like bank and restaurant it will be clearly mention that the working time is more after closing the business hours with customer. The work above standard hours suitable rewarded and otherwise paid hourly basis.
Context of Employment relationship
Blyton and Turnbull, 2004 remarked "The employment relationship between employee and employer does not occur within a vacuum where as it affected by numerous factors in which work is organised and the wider context where it takes place".
The context and nature can be understood with the help figure 1, which includes three areas namely wider environment, organisational subsystems and the time factor.
Political
Economic
Past
Future
Wider Environment
Technological
Social
The Employment Relationship
Future
Past
Organisation of Work
Job
Security
Control of Performance
Employee Participation
Work Task
Figure 1 Context of Employment relationship
(Source: Tailby and Howe, 2005, pp 35)
All organisations exist in wider environment and can be observed as interrelated and overlapping circles. A political decision on minimum wages will put an extra Pressure on employer and at the same time cost will increased and may be he try to extract more work and relation will be affected. Development in technological advancement like IT, Computers, CCTV can change the location of work. Technological work can be shifted from offices to home and it can in turn affect the social life or it will affect work life balance. It can be observed that all four elements are interlinked and change in one may affect the other environmental factors. Employees and employers are affected by such change and the relationship can be sweetened or further spoil. Development in IT sector has result in shifting of jobs from one country to another and political rules are proposed in the outsourcing country.
Work systems and pattern of work is also affecting ER. Gallie et al. (1998) identified that four important areas need to be reorganised as changes are observed in the work task, control of performances, job security and participation of employees in work and these changes will affect ER. The changes will not be in one part of work rather it will be in all levels of the ER. The management and organisation structure changes in one industry lead to other. A change in IT section lead to development in Hospital management and doctors and surgeon need to understand and learn use of new equipment which will in turn add to cost of equipment and training.
In figure 1 it is observed that double headed arrows outside and inside the oval. Outer most four arrows indicate that relationship affected by past and future events. ER is affected today what decision is taken in last year board meeting. (Salamon,2000). Any labour problem arises now in the organisation will affect relationship of future employees and employers. Any decision taken in future is an outcome of past relationship. ER is also affected by delay in some key decision and many organisation face problem of industrial action by trade unions.
Changes In wider Context and ER
The global changes at macro level affect the entire organisation. Changes are taking place every now and then in some part of the world of work and having an impact in other parts. A survey conducted on British mangers about the changes experienced by British managers shows that 57% experienced more changes in 1997 and the percentage jump to 67 in 1999. After that there are revolutionised changes taken place in IT and telecommunication industry. When they were experiencing so many change where as at present level knowledge is becoming outdated every third year.( Worrall and Cooper, 1999).
Warhurst and Thompson, 1998, realises that there is decline in manufacturing activities and surfacing of service industry. The competition is becoming fierce and organisations are involved in cutthroat competition to cut down cost. Organisation needs to change the way they are working at present. In UK government sector organisation are forced to work like business sector as the pressure is immense to be privatised and this affected the ER. The work is becoming more mechanistic ( Handy ,1996) where as Some other felt that there is threat to traditional employment pattern. All scholars are observing change in work culture and such change will affect ER.
Political Environment and ER
Government and political ideology will affect the work culture. Labour and Conservative government has different outlook towards work and people in UK. Which ever party is in power they have their political agenda and they bring changes. Such changes may be favouring employer or employees and accordingly relationship is affected. Employment Relation Act in 1999 is a step forward toward this endeavour. Salamon, 2000, observed that the relations are affected by changes in successive government in many ways. Government power to establish and modify regulations and act related to ER system changes the context and relationship changes. Government also had a political ideology and they try to influence the public sector to follow it. Government's socio-economic policy will affect the prevailing general environment and work life balance will affect the relationship at work.
In UK during 1960 and 1970 Labour and conservative work as consensus unit to improve the economy and creating full employment. In 1980 when conservative party came with majority the direction was towards free market and liberalisation drive. The purpose is to bring forth individualism, private enterprises and relying on local resources for development. ( Millward et al., 2000). The similar approach was observed in Europe and government intervention was very less in policy designing and budgeting. Trade union started disintegrating as the government was purely governed by market dynamics. Collective bargaining was becoming less and individualism was at peak. In 1997 when Labour government again took centre stage the stress on labour welfare but unionism was not promoted and single union concept was spread.
It is evident that government policies are responsible for the development favourable environment for healthy relationship between employee and employer. Supportive legal acts are required to protect both. Generally relationship is understood to protect employee interest, as they are weak and not organised in employment contracts. Employer should also have freedom to take decision to create more employment and trying out new organisations in the economy.
Economic Environment and ER:
Economic environment was changing all the time but in last fifty years organisation started affected by other countries economic scenario. Globalisation and internationalisation has wider impact on the mobility of labour. Economic benefits attracted human resource to developed countries in search of jobs and quality life. In middle countries majority of working population is from other nations. Many organisations involve in merger and acquisition for regional growth and international presence. Top 200 multinational are controlling one third of global production and 80% of world trade controlled by multinationals. Leat and Woolley , (1999).
USA and UK has invested in other nations and France and Japan is also added in the list. The investment by UK is over twenty one billion pounds in world economies. They have invested in developing nations to get advantage of cheap labour to economise on cost and compete with rest of Europe. Direct foreign investment brings ideological difference in the host country and also the relationship is viewed differently. UK multinationals investing in India or china also transfer their work values and ethics to such countries and other local firms also try to follow such policies. It also brings concept of single union and no strike agreements, company uniforms in the economy and the pattern of relationship is improved between them. Leat and Woolley, (1999)
Private sector is also at rise in all economies. Managers in private sector are more professional than in government sector as it is association of rewards and stability. Professional management has improved the relationship in private sector large multinationals. The public sector is working on the principles of seniority and not efficiency. In UK public sector is consider to be organised and based on mutual respect among all actors. The ER is positive and developing where as in private sector efficiency based promotion creates hard feeling among employees relationship.
Figure 2 describes the shift of occupation in UK economy by the Office for National Statistics, 2008. The shift from agriculture to manufacturing and from manufacturing to service sector is observed in UK economy. Service sector is growing at good pace where as manufacturing sector is shifted in other part of the world. Services sector has more professionalism and employees are organised and generally all qualified and professional people work together and enjoy better ER.
Figure 2: No. of employees by job industry in the UK 1978 -2007
(Source: Office for National Statistics, 2008)
Unemployment is another economic dynamics affecting relationship especially in during recession period. Decline in manufacturing industry put many employees redundant and some other were not getting full time job. This relationship got adversely affected and industrial actions were observed in the secondary sector.
Technological environment and ER
First computer was launched in 1970 and in last 40 years IT industry has grown many fold. Information can be procured and processed in no time. The use of automated machines and robotics in manufacturing process has drastically brought down jobs for skilled workers. Large size organisations are mostly relying on machines and keep innovating to improve quality and quantity of production. Control and coordination work is also undertaken by technology and human element is minimised. In a survey conducted on British managers that 80% ranked PC as most essential tool, followed by 72% for email and 53% valued mobile telephone as an important tool. This equipment reduces the work and added value to work but dependency on equipment has increased.
Telecommunication industry gives freedom to operate business from anywhere and especially organisation involved in e commerce doesn't need physical offices. Their pattern of work is changed as observed by Greenbum , 1998. Workers need to upgrade the skills and it improved the wages and working conditions. The change has brought different outlook towards job and relationship .It has become more impersonal and quantifiable rather than personal and humane as people are operating from different locations.
Social Environment and ER
Society and its working population earn for the society. Societal values are crucial to determine the work life balance and attitude towards work. In Middle East it is found that local population is not focus on work but slowly female population is working hard.
Figure 3:Economic activity by Gender
(Source Office for National Statistics, 2008)
The percentage of male to female population is coming closer in UK economy. It suggests that with 50% working population to nearly 100% comparability is observed in the ratio. More female population means development of paternity and maternity leave for females, flexible working schedule and nature of job is changed. When changes were introduced in job structure the relationship and working pattern will be changed among employees.
Conclusions:
The employment relationship never works in isolation it is based on different situations and context. Macro environmental factors and relationship is compared and contrasted. Worker is experiencing changes and such changes are in terms of government role in relation building. Government rules and legislation may improve the ER. The economic context deals in globalisation factors and role of privatisation in developing human relationship. Technological framework and development in IT Sector and telecommunication also affected the employment relationship. Female participation and change in societal outlook and attitudes are developing and affecting ER.
Finally changes in the environment factors will bring change in working pattern and contractual relationship. The positive and negative impact will phase out over a period of time and again new changes will bring new dimensions in ER.
