Industrial Relations Trade Unions can be defined as all organisations which include, among their functions, that of negotiating with employers, with the object of regulating conditions of employment. Unions negotiate with employers on pay and conditions in a process known as collective bargaining.

Management attitudes towards Unions Outright hostility and opposition to organisations seen as stirring up trouble. Reluctant acceptance of organisations that are seen as a necessary evil Enthusiastic acceptance of organisations that are legitimate expression of employee opinion and an essential channel of communication.

Collective bargaining The process whereby procedures are jointly agreed and wages and conditions of employment are settled by negotiations between employers or associations of employers and workers organisations.

The pay bargaining process Rise in the cost of living – pay rises below the rate of inflation are seen as pay cuts in real terms. Unions will always bargain to maintain pay in line with inflation. The need for attractive rates of pay – in order to recruit and retain the right employees. The need to maintain differentials – pay rises are often based on the desire to keep inline with comparable groups of workers.

Pay bargaining (cont) Productivity rises – (productivity is defined as output per unit of input) Productivity bargaining involves a trade off between increases in pay to changes in working practices. The need to compensate employees – changes in technology/conditions or working practices.

Industrial disputes Withdrawal of cooperation; Work to rule; Overtime ban; Token strike; Indefinite strike.

Harmful consequences of a strike. For employers Loss of output Reduction in sales revenue/profits Loss of custom Cash flow problems Harm to reputation Disruption

Harmful consequences of a strike. For customers Inconvenience Shortages For strikers Threat to jobs, or closure or reduction in capital investment Reduction in local income, reduces trade

Harmful consequences of a strike. For the economy Loss of exports Import penetration Decline in tax yield Additional claims on social services Loss of foreign confidence Reduction in income For other firms Problems in acquiring unputs

Mediation, conciliation and arbitration Mediation is where an independent organisation will work with both parties to seek to guide them to making a compromise agreement. Arbitration is a semi judicial process with a neutral third party making an award based on the justice of the case. Conciliation is a process where the two sides are encouraged to reach a mutually acceptable settlement.