HRM201 Exam Notes PDF

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Warning: TT: undefined function: 32 Warning: TT: undefined function: 32 List of exam topicsWeek 2 - Approaches to the study of employment relationsWeek 6 – The State (2)Week 8 – Agreement/rule making (2) - Collective agreement-making and bargainingWeek 10 - Wage determinationWeek 11 - Industrial con...

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List of exam topics

Week 2 - Approaches to the study of employment relations Week 6 – The State (2) Week 8 – Agreement/rule making (2) - Collective agreement-making and bargaining Week 10 - Wage determination Week 11 - Industrial conflict Week 12 – Work Health & Safety

WEEK 2 - APPROACHES TO THE STUDY OF EMPLOYMENT RELATIONS

Discuss the three key frames of reference used to understand the employment relationship - unitarist, pluralism and radicalism (Marxism).

Unitarist •

General Philosophy

• •

Based on mutual co-operation and a harmony of interest between employers and employees The organisation is similar to a team, unified by common goals and objectives Employees are expected to be loyal to management in recognition of their common objectives

Role of Trade Unions

Trade unions are regarded as unwelcome intruders who disturb the naturally harmonious running of the organisation and compete with management for the loyalty of employees.

Role of Management

Unitarist support strong leadership by management to gain commitment of employees.

Weaknesses

• •

Employees are seen as complex economic agents – entitled to equity and voice. Power is diffused – no party dominates the other Pluralism was the dominant approach in Australia throughout the twentieth century.

Trade unions are the legitimate representative of employee interests and have the right to challenge management. Unions have responsibility to seek compromise. Management aims to reconcile conflicting opinions and keep conflict within acceptable bounds.

Don’t want a role: Neoliberalism, let the market act/affect

The State is an impartial protector of the public interest, protects the weak and retrains the strong. • Does the state have its own agenda with industrial relations?

Conflict is avoidable and temporary

Conflict is inevitable because of the oftencompeting interests of individuals and/or groups of individuals within a workplace (e.g. Employers and employees).

Role of the State

View on Conflict

Pluralist •

o o

The result of aberrant behaviour; Induced by trouble makers, poor management or poor communications

◦ Fails to recognise the different interests that exists between management and labour ◦ Narrow view of conflict

•

◦ Little appreciation of differences in power and the dynamics of workplace relationshipshow is this determined? What role does external regulation play here? ◦ Failure to recognise or appreciate that deep-level conflict can result in the manifestation of much more significant problems.

• • •

Criticised for its assumption that social power is equally distributed among a wide variety of competing stakeholders Ignores inequalities of power and control built into systems of conflict resolution Defends the political and economic status quo More concerned with the resolution of conflict rather than its generation

Radicalism •

•

Unions are a necessary outcome of the power imbalance

Management wants to take advantage of capitalism The State acts to protect the owners of capital at the expense of worker rights

Industrial conflict is inevitable and is an aspect of class conflict in wider society due to the unequal distribution of income and wealth in a capitalist society

•

• • •

•

Notes

Examples of theory: Scientific management; Human relations; HRM.

Examples of theory: Dunlop’s systems theory; Strategic choice theory

Neoliberal Egoist Approach (4th approach)

• • • • • •

Assumption that individuals are rational agents pursuing self-interest Labour is just another commodity Tendency to underperform or ‘shirk’ therefore incentives must be provided ‘Invisible hand’ of the market dictate appropriate conditions of work Conflict? Resolved by enhancing the bargain between the parties Role of the state? To facilitate market neo-liberal exchange.

Those who own the means of production have more power than those who sell their labour for wages Economic inequality cannot be overcome at the workplace level o Must change underlying social structures

Focus on conflict ignores issues of trust, accommodation and cooperation in employment relations Underestimates the role of the State in democratic societies Political parties allow for stakeholder voice Traditional trade unions are not always necessary within the employment relationship Assumes employers principle goal is to exploit labour.

Example of theory: Labour process theory

WEEK 6 – THE STATE

Protective vs Productionist law Protective labour law Regulation that seeks to protect workers from unregulated market competition and arbitrary treatment from employers through the extension of employee rights and the creation of tribunals and agencies. Productionist (or neoliberal regulation) Seeks to diminish the power and influence of third parties (unions and tribunals) and enhance managerial prerogative.

Substantive vs Procedural Law Substantive rules ◦ Focus on the real terms under which employees are rewarded and the conditions under which they work Procedural rules ◦ Govern the processes by which substantive rules are made and enforced •

Statutory regulation can produce both types of rules

Collectivism vs Individualism Collectivism is defined as rules that seek to regulate the behaviours of organisations or groups of employees and employers, such as trade unions, firms and employer associations. In contrast, individualism can be defined as regulation that confers and imposes rights and obligations on individual employees and employers, e.g.: • • •

Statutory individual contracts Unfair dismissal laws Anti-discrimination law

Categories of state regulation: Statutory vs Deregulated regulation Statutory regulation Making of rules of the employment relationship by legislature and embodied in legislation eg: National Employment Standards (NES)

Statutory regulation: Minimum employment standards • • •

Direct statutory regulation of minimum standards has been historically unusual in Australia because of the conciliation and arbitration systems Where statutory regulation did occur, it was generally by the state governments due to the constitutional limits imposed on the power of the federal parliament. At the federal level, most instances of statutory regulation before 2005 established procedural rights such as EEO and unfair dismissal laws using the ‘external affairs’ power of the Constitution.

WorkChoices 2005 • •

Howard Coalition Government used the ‘corporations power’ of the Constitution to introduce five substantive individual rights in federal legislation Australian Fair Pay and Conditions Standard (AFPCS) o Minimum wage (determined by AFPC) o Hours of work o Annual leave o Sick leave o Parental leave

Fairwork Act: National Employment Standards • • • •

Maximum weekly hours of work Requests for flexible working arrangements Parental leave (and related entitlements) Annual leave

• • • •

Community service leave Long service leave Public holidays Notice of termination and redundancy pay

•

Personal/carer’s and compassionate leave

•

Fair Work Information Statement

Delegated regulation: Making of rules of the employment relationship by a state agency delegated the responsibility by the legislature eg: Modern awards

Awards • • •

Award − ‘a legally enforceable determination (or the document) containing the terms and conditions of employment in a firm or industry’ Determined by decisions of members of tribunals and are legally binding on parties Historically, awards were how conciliation and arbitration tribunals resolved disputes.

Modern Awards Modern awards contain 10 matters: • Minimum wages (determined by FWC) • The type of work performed • Arrangements for when work is performed • Overtime rates • Penalty rates • Annualised wage or salary arrangements

• • • •

Allowances Leave, leave loadings & arrangements for taking leave Superannuation Procedures for consultation, representation & dispute settlement

Role of awards in National System • • • • •

Pre-1993, awards were central to wages and working conditions Post-1993, collective bargaining became dominant rule-making process and awards provided a ‘safety net’ Safety net role declined under Work Choices Safety net role restored under Fair Work Act (We return to Awards and the NES next week when discussing agreement making).

Unfair Dismissal • • •

Dismissal generally deemed unfair if it is ‘harsh, unjust or unreasonable’. Different from unlawful termination which involves termination for prohibited reasons, e.g. union membership/non-membership, race, colour, sex, sexual preference, age, physical or mental disability. ‘Fair go all round’ principle - need to weigh up: o Substantive fairness (the reasons for the dismissal) o Procedural fairness (the manner in which the dismissal was effected)

Unfair Dismissal under WorkChoices • • • •

‘Small Business’ exclusion: businesses with less than 100 employees exempt Businesses with 100+ employees: Can be dismissed for ‘operational reasons’ (economic, technological, structural) Qualifying period increased from 3 → 6 months Short term casuals and employees earning above a certain amount excluded

Unfair Dismissal under the Fair Work Act • • • • •

‘Small Business’ exclusion: businesses with less than 15 employees ‘Operational reasons’ no longer acceptable 100 employee exemption removed Less 15 employees = 12 months. More 15 = 6 months Casual employees no longer excluded but high income threshold remains

Debates Surrounding Unfair Dismissal Protection Laws

Economic Rationalism

Social Justice

Economic rationalism emphasises: • Managerial prerogative – the right of the owner or manager to make decisions unilaterally about the running of their business • The primacy of market forces and the need to relax regulatory interventions (leave it to the two parties without external intervention) • Employers should be able to dismiss employees without having to follow rules set by external bodies Unfair dismissal laws interfere with the natural prerogative of employers to hire and fire

Social justice emphasises: • Fairness and the negative consequences where power inequalities exist • Imperfectly operating labour markets o Workers are not always in a position to make ‘choices’ about where they work or what work they accept, or their acquisition of skills and education o Historical , social and economic factors come in to play • The State must intervene to redress power imbalances Unfair dismissal remedies needed to provide protection from arbitrary employer action

Small Businesses and Unfair Dismissal

Arguments for exemption •

•

Small businesses don’t have the time, expertise or resources to comprehend the legislation, deal with performance management issues, or defend an unfair dismissal claim UD laws inhibit job growth in the small business sector

Arguments against exemption • •

•

Inconclusive evidence about the impact of unfair dismissal laws on job creation Ignorance is not a defence: information about the requirements for operating a business is widely available and easily accessible Injustice, job security and vulnerability in the workplace

WEEK 8 – AGREEMENT/RULE MAKING (2) COLLECTIVE AGREEMENT -MAKING AND BARGAINING Introduction to Interest Based Bargaining

In 2013, the Fair Work Act 2009 introduced a new function for the Fair Work Commission; to promote productive workplace relations and to prevent disputes. ‘New Approaches’ was the strategy developed to fulfil this new function.

Understanding and considering the interests of the other party is difficult: • Historical context (both Aust IR landscape and our experience as IR pracs) • Psychologically, it feels as though you have to give up on your own needs, it might be perceived as weakness IBB model doesn’t advocate ‘soft’ negotiation, it argues that when you are mindful of or can anticipate the other parties interests, that you can create better outcomes, better relationships.

‘The goal cannot and should not be to eliminate conflict. Conflict is an inevitable–and useful–part of life. It often leads to change and generates insight…The challenge is not to eliminate conflict but to transform it. It is to change the way we deal with our differences–from destructive, adversarial battling to hard-headed, side by side problem solving.’

Collective bargaining can be: ◦ Distributive ◦ Integrative ◦ A mixture of both (mixed bargaining)

Distributive •

•

•

•

•

Codified by Walton and mckersie in the 1960s. Views the bargaining process as the division of a fixed set of assets amongst a specific group of parties. No concern with equal or even “fair” division of assets. Concern is that the other party acquiesce to the will of the opposing party. Embraces conflict.

Integrative •

•

•

Again coined by Walton and mckersie in the 1960s. Based on the idea that joint problem solving creates an increase in possible positive outcomes. Is meant to increase the pool of resources from which everyone draws down on.

Mixed Bargaining

Traditional Collective Bargaining

Traditional • • • •

Position-based Distributive Adversarial Win-lose

Interest Based bargaining • • • •

Preparation

Between the parties: • ‘Bargaining about how to bargain’ • Agree on structure and rules for Bargaining Committee • Decide bargaining frequency and duration

Jointly:

Within each party: • Appoint bargaining representatives • Establish claims • Decide bargaining strategy

•

• • •

Between the parties: •

Negotiations proceed until tentative agreement is reached

Gain commitment to interest based approach Agree structure & rules for Interest-Based Problem Solving (IBPS) groups Undergo education in interest-based processes Conduct review/determine important issues

Within each party: • •

Bargaining

More co-operative/integrative form of bargaining Supports collaborative resolution of workplace problems Can improve relationships between unions/employees and management Can contribute to mutual gains

Appoint/agree IBPS group participants Intra-party communication and caucusing

Jointly: – share interests and concerns – generate ideas and potential options – agree criteria for evaluating options

Within each party: •

Intra-party communication and caucusing

– craft joint solutions  Within each party: • •

Implementation

Between the parties: • •

Direct dispute/grievance resolution Third-party participation in dispute resolution

Within each party: •

Raise issues of concern in interpreting and/or implementing agreement

Appoint/agree IBPS group participants Intra-party communication and caucusing

Jointly: – Agree on structure and process to oversee implementation – agree on structure and process to address new issues as they arise  Within each party: – raise issues of concern in interpreting and/or implementing agreement – raise new issues – intra-party communication and caucusing

WEEK 10 – WAGE DETERMINATION Types of wages • Wage rates - monetary sums paid per periods of time worked. • Piece rates -monetary sums paid for a designated units of output • Bonuses- financial rewards conferred on the basis of performance. • Nominal wage - total wage paid without considering impact of inflation on its purchasing power. • Real wage- total wage paid over time that takes account of inflation. • Gross wage - total wage before deductions • Net wage - total wage after deductions. • Salaries - total pay over a 12 month period, which encompass other payments. • Penalty rates - percentage over normal rate for work performed outside normal hours. • Overtime rates - percentage over normal rate for work performed in addition to normal hours. • Allowances - payments to cover remunerative or personal costs employee incurs during work. Wage Determinants Psychological and social factors (Rees 1993; Davis 2003; Goldsmith et al. 1997) • • •

Wages provide for personal well-being, personal recognition, and personal symbols of status. People need to believe their workplace contributions are being adequately and fairly rewarded. -When paid unfairly people will respond accordingly, of which employers are mindful.

Job requirements (De Beyer & Knight 1989) • •

Jobs are graded and filled with employees having certain capabilities The wages paid are similarly graded at rates that accord with these capabilities.

Supply and demand (Rothschild 2006; Coleman 2010) • •

Scarcity in the supply of a skill relative to the organisational demand for such a skill, will normally realise a higher wage rate and when the opposite condition prevails. Abundance in the supply of a skill relative to the organisational demand for such a skill, will normally put downward pressure on wage rates.

Industry variations (Kerr 1977; Mortensen 2003) Different rates can be paid to employees engaged in similar occupations in different industries. The cause of this depends on: • • • •

The different in working conditions between industries, The centrality or importance of an industrial sector relative to others within the economy, The state of the business sector in which organisations operates relative to others, or The differences in the capital-labour ratio across different industries.

Economic circumstances (Lazear & Shaw 2008). Lever 1995; Wachtel 2013) •

During periods of economic growth the availability of labour becomes scarcer, the profitability of organisations becomes higher, and inflationary pressures can build.

•

Organisations thus pay higher wages to attract and retain labour and the have the financial ability to do so, whilst employees seek their ‘piece of the action’ and maintain living standards.

Cost of living (Ingram et al. 1999; Figart 2004) Increases in inflation over time erodes real value of wages, and so also their purchasing power. • •

Employers are mindful of these pressures and may adjust wages in line with the index. Employees and their unions are also mindful and use the index to justify wage demands

Bargaining Power (Mishel 1986; Kaufman 2002) Wage outcomes are often linked to the relative bargaining power of employers and unions. • •

The power of employers is dependent upon economic and business conditions, managerial prerogatives and legal protections afforded during the processes of wage bargaining. The power of unions is dependent upon economic and business conditions, calibre of leadership, willingness of employees to take industrial action, and legal legitimacy to act as wage bargainers.

Ability to pay (Lazear & Shaw 2008; Kerr 1977; Figart 2004) • • •

The pool of available financial resources from which to pay the costs of labour will determine the rate at which wages are paid, as well as the extent and timing ...