EMPLOYEE REPRESENTATION:

EMPLOYEE REPRESENTATION:
Chapter 8 EMPLOYEE REPRESENTATION: NON-UNION This session looks at non-union representation. If employee voice is an important function carried out by unions, how is this role played when unions are not involved or present in the workplace? This chapter provides an overview of the mechanisms through which non-union voice is expressed. The issue of non-union representation of employees—although it has always been an issue in Australian employment relations—has become a more important issue for both employees and managements in recent years. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Learning objectives Identify the main forms of non-union employee representation—namely those sanctioned by the state and those initiated by management. Describe the (limited) attempts by Australian governments to sanction non-union forms of employee representation and compare this experience with overseas countries. Discuss the approach of management to providing non-union employee representation in workplaces. Account for the general failure of Australian managers to adopt high-involvement management practices. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Overview Main forms of non-union representation
State-sanctioned non-union representation Management-initiated non-union representation Employee representation: efficiency and equity Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Forms of non-union representation
How can non-union representation occur? ‘State-sponsored’ or ‘management-initiated’ ‘Direct’ or ‘indirect’ forms of representation ‘Consultative’ or ‘decision-making’ forms of consultation Given that employees—if they wish to express concerns about work—are likely to unionise, how are employees to be represented if there is no union present in the workplace? We can see different types of representation approaches and structures by looking at three dimensions. Is the representation structure ‘state-sponsored’ or ‘management initiated’? We will look at the various permutations later in this set of slides. Is the representation structure ‘direct’ or ‘indirect’? What is meant by ‘direct’? A direct representation structure is where an individual employee—if they choose—could personally participate in the decision-making. Examples of this are teamwork or quality circles. An indirect representation approach is where employees appoint representatives to speak on their behalf. Examples include traditional union representative structures like delegates and workplace committees, joint consultative committees, employee representation on boards of directors and so on. Is the representative structure ‘consultative’ or ‘decision-making’? In a consultative process, employees can comment but cannot change the outcome. In a decision-making approach, employees can participate in the final decision. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Classification of non-union forms of employee representation
Consultative Direct Internal memos Bulletin boards Suggestion schemes Indirect Joint consultative committees Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Classification of non-union forms of employee representation
Decision-making Direct Quality circles Teamwork Indirect Works councils Employee representation on company boards Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

State-sanctioned non-union representation
The state in European countries has generally promoted a dual system of employee representation: supporting union representation supporting workplace committees elected by all employees In some countries, such as Germany, works councils are required under law. These representation structures are much less common in English-speaking countries. A state-sanctioned representation system is one that exists either under law or with support from the state. Such an approach is quite common in Europe, where governments have encouraged the development of a dual approach to representation, but these representation structures are not nearly so common in the English-speaking world. Under such a dual system, employees can be represented by a union, and by a workplace or organisational level committee. This committee has a membership—in addition to management representatives—that is made up of representatives elected by all the employees within the workplace. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

The Australian experience of state-sanctioned non-union representation
This section overviews three types of non-union representation structures: occupational health and safety committees non-union collective bargaining and bargaining agents individual contracting [This slide is an overview of the next section.] Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Occupational health and safety committees: most widespread of non-union representative structures in Australia by 1990, 41% of workplaces with more than 20 employees had a formal OHS committee established under state OHS legislation tripartite workplace structure responsible for managing workplace OHS OHS committees more likely to exist in unionised workplaces Under state-based OHS legislation, state-sanctioned workplace committees are relatively common, representing approximately 65% of the workforce. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

The Australian experience of state-sanctioned non-union representation (cont.)
Non-union collective bargaining and bargaining agents: non-union bargaining first commenced with the Industrial Relations Act 1991 in NSW: permitted collective enterprise agreements without a union respondent followed soon after by permutations in other states The first statutory means of enabling non-union bargaining was enacted by the Industrial Relations Act 1991 in New South Wales, followed soon after by most other states. The other states introduced a variety of approaches, all aimed at enabling non-union bargaining, but in very different ways. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Non-union collective bargaining and bargaining agents: Enterprise Flexibility Agreements (EFAs) were established under Industrial Relations Reform Act 1993 (Cwth): enabled agreements that were directly negotiated between employers and employees employer had to be a constitutional corporation The first step, federally, came with the introduction of Enterprise Flexibility Agreements (EFAs) under the Industrial Relations Reform Act 1993 (Cwth). These provisions enabled the negotiation and registration of non-union agreements, but had very onerous conditions and enabled unions to intervene at the registration stage. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Non-union collective bargaining and bargaining agents: Enterprise Flexibility Agreements (EFAs): expected to enable employers to deunionise workplaces no evidence of this—unions typically intervened in registration EFAs were expected to assist employers in de-unionising workplaces, making it easier for employers to force employees to trade away existing conditions for pay increases. There is no clear evidence that this actually occurred, largely because the rules enabled trade unions to intervene. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Non-union collective bargaining and bargaining agents: Workplace Relations Act 1996 introduced Section 170LK agreements: replaced EFAs agreements between constitutional corporations and employees unions could only intervene if they had members affected by the agreement Ambiguous evidence on whether non-union agreements provide better employee representation. EFAs merely prepared the way for the provisions of the 1996 Act, which enabled a raft of non-union and non-collective agreements. The legislation enabled non-union collective agreements—Section 170 LK agreements—and replaced the EFA provisions. Unions could only intervene if they had members in the workplace who would be affected by the agreement. Although the rhetoric of non-union agreements suggests an interest in developing better workplace relationships, there is no clear evidence that the new s. 170 LK agreements actually provide for formal mechanisms of interest representation. In fact, it appears that union agreements are more likely to have provisions for employee representation than non-union agreements. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Australian system until 1990s focussed on collective employment regulation. First major departure: Employment Relations Act 1992 (Vic): created an opportunity for enforceable contracts between employer and employee collapsed quickly, as many workers were soon covered by federal awards The Australian ER system has been largely concerned with regulating the terms and conditions of groups of employees throughout most of the twentieth century. In the 1990s, however, conservative state governments and then the federal government sought to create statutory forms of individual employment regulation. The first major departure was the Victorian Employment Relations Act 1992, which effectively cancelled all state awards and created an opportunity for employers and employees to develop new types of employment arrangements. This scheme did not last long—many Victorian workers quickly came under the coverage of the federal award system. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Other states attempted to set up similar schemes: 1993 (WA)—Individual Workplace Agreements 1996 (Qld)—Queensland Workplace Agreements Federal individual contracts under the Workplace Relations Act 1996 Australian Workplace Agreements (AWAs) In the following years, other state governments sought to introduce equivalent schemes. However, the most significant development has been the introduction of Australian Workplace Agreements (AWAs) as a result of the Commonwealth Workplace Relations Act This act created a new form of employment contract: between the employer and the employee. As we will see in the next slide, this new type of industrial instrument had several features. Obviously, the key feature of the AWA is that it is an agreement between employer and employee. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Australian Workplace Agreements (AWAs): individual agreements, reached between employer and employee registered with Office of the Employment Advocate, subject to ‘no disadvantage’ test terms override award or agreement covering the employee Once signed, the agreement is lodged with the Office of the Employment Advocate. If it passes the ‘no disadvantage’ test—that is, the terms and conditions of the agreement are not worse than the terms and conditions of the award or agreement already covering the employee—the agreement is ‘approved’. Once approved, the terms and conditions of the agreement override all of the terms and conditions of any previous agreements or awards covering that employee. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Australian Workplace Agreements (AWAs): government’s stated aims: to give employees choice to free employees from misguided agenda of union officials to allow new relationships to develop between employers and employees AWAs have limited coverage—approx. 2% of workforce What did the government intend by introducing AWAs? Essentially, it was seeking to give employees and employers a choice about the form of employment regulation they would have in their workplace. This choice was largely between ‘collective agreements’—with the concerns of the many impacting on the terms of the agreement between an individual employer and employee—and the AWA—which enabled the employer to develop a more productive working relationship with each of their employees. In part, the introduction of AWAs was due to a longstanding government concern about the presence of third parties, most notably unions, in the workplace. These third parties, the government suggested in the various speeches read in parliament, acted to prevent a productive relationship between employer and employees. The third parties would apparently intervene with additional concerns, not relevant to the particular workplace. In numerical terms, AWAs have not been very successful; only about 2% of the workforce was covered by AWAs in However, AWAs have had a greater effect in the broader context of employment-relations restructuring. What is the impact of AWAs on representation for employees covered by these agreements? What are the symbolic and political implications of the spread of AWAs? Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Australian Workplace Agreements (AWAs): involvement of employees covered by AWAs: Are employee interests recognised when AWAs are negotiated? Conflicting evidence Do workplaces with AWAs have better communication, consultation and involvement? Limited evidence suggests not AWAs and employment representation There are two related issues here: To what extent are employee concerns recognised during the negotiation of AWAs? There is conflicting evidence on this point. Waring (1999, 2000) and Van Barneveld (2000) suggest that the AWAs are typically imposed, rather than the result of active negotiation and agreement. However, Gollan (2000) argued that AWAs were typically the result of significant consultation. Have AWAs assisted in creating a more productive working relationship? There is no clear evidence that AWAs have assisted in developing a better relationship at the workplace or improved communication. The limited evidence suggests otherwise. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Individual contracting: Australian Workplace Agreements (AWAs): symbolic effect of AWAs: AWAs used to remove union presence Liberal and National parties see AWAs as central to the future of Australian ER ALP committed to removing AWAs The symbolic implications of AWAs The AWA has been used as a tool to assist in broader strategies to de-unionise workplaces, by fragmenting union organisation in the workplace and weakening union bargaining positions. Both sides of Australian politics have strong views about the future of AWAs: the Coalition is keen for AWAs to spread, while the ALP seeks to remove them. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Management-initiated non-union representation
Management has had an intermittent interest in employee participation Ramsay (1977, 1993): management interested during times of worker strength and management weakness. Interest wanes when threat passes. Ackers et al. (1992): say Ramsay doesn’t explain the persistence of management interest after the threat has passed. Lansbury and Wailes (2003): management’s interest is conditional, but affected by a wide range of contextual factors. The literature suggests that management has had a longstanding interest in employee participation, but this interest is intermittent. Ramsay has suggested that this interest fluctuates according to the risk and threat faced by management at the time. For example, during times of labour shortage, management is more inclined to be interested in issues of employee involvement. However, when the threat recedes, management’s interest also recedes. Ackers et al. (1992) agreed that Ramsay provided a useful framework for explaining the 1970s, but could not explain the behaviour of management in the 1980s and the 1990s. In these periods, although management’s difficulties were no longer so grave and the bargaining position of labour was significantly reduced, management was still exploring employee participation. Lansbury and Wailes (2003) suggest a solution: management’s interest is conditional but it is not conditional only on the state of the labour market; management is also affected by the broader context—the state of the product market, the broader economy, and workplace power also influences management’s interest in employee participation. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Performance gains resulting from employee participation have also been influential: participation as pathway to employee satisfaction and economic success. For example: Hackman and Oldham’s ‘job characteristics’ theory: worker autonomy a key variable in motivation neo-human relations school—McGregor etc. participation central to ‘socio-technical’ systems of work organisation Management can also seek to introduce employee non-union representation for other reasons—it may provide a means to increase performance, either through increased employee satisfaction or through direct performance improvements. Both ways lead to superior profitability outcomes. This perspective draws on the broader organisational behaviour/human resource management literature. [Run through the list.] Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Management interest in teamwork and empowerment as a consequence of the downsizing of the 1990s. Management interest in employee participation as a consequence of changing strategies of production: employee involvement essential to the ‘new’ production processes of post-Fordism There are two other explanations for the prolonged interest by management in non-union representation structures. 1. As a consequence of the downsizing of the 1990s During the 1990s, many organisations underwent a process of downsizing and restructuring. This process involved dismantling bureaucratic work organisation structures, as well as redesigning work processes to enable workloads to be managed with significantly fewer people. In this context, teamwork became important: it offers a mechanism for managing new, flexible work arrangements. 2. As a consequence of the onset of post-Fordism Some researchers have suggested that the typical workplace is moving towards post-Fordism, which places more emphasis on innovation, devolution and employee involvement. While the Fordism workplace—based on Taylorism and scientific management—was based on clearly defined organisational structures, and clearly structured and efficient work processes, the ‘new’ post-Fordist workplace is significantly more dependent on employee discretion and initiative. In this context, management has an incentive to increase employees’ capacity to participate. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

The plausibility of such schemes has been called into question sharply on a number of points: devolution of responsibility is limited teamwork is a strategy used to win more effort to achieve management’s goals, not the employees’ goals Management’s motives in initiating non-union representation are not clear. In summary, the criticisms of management’s intentions are: The devolution of responsibility from management to the workforce is always limited—although employees may find new ways of simplifying the production process or identifying new markets, there are some outer limits (i.e. management will retain the right to retain profits, set prices, or decide which markets to sell into). Teamwork and so on is part of a broader strategy to win more effort and compliance from employees and to minimise dissent. There is no clear evidence that management is seeking to improve the quality of work lives; instead, the emphasis is on finding new ways to extract greater actual effort from employees. Teamwork and the array of other consultative processes offer a range of approaches to win greater employee involvement. However, it is clear that the logic of management’s interest in non-union representation structures is complex and uncertain. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Management-initiated employee representation in Australia
Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Overview of the history of Australian management’s approaches to employee representation: until 1970s, reactive, and uninterested in employee participation beginnings of a more sophisticated management approach during the 1980s development of employee representation from the 1990s onwards recent studies about the implementation of management-initiated representation approaches [This slide is an overview.] Australian managements were not really interested in the voluntary schemes designed to increase employee involvement before the 1970s; interest in such schemes increased in the 1970s and 1980s and became widespread across industry in the 1990s. The following slides outline this process. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Management-initiated employee representation in Australia (cont.)
No real interest on the part of management in employee representation approaches until the 1970s: approaches implemented were typically narrow in scope and did not challenge line management’s authority by end of 1980s, few formal consultative committees Australian managements were not very interested in participation schemes until the 1970s; during this era both governments and employers started exploring options for increased worker involvement. The approaches implemented—apart from at several leading companies—were typically very narrow in focus, reflecting management’s scepticism about the merits of organisational development and industrial psychology; and these approaches usually did not challenge line management’s authority. Ford and Tilly suggest that approaches to employee participation seemed overwhelmed by management and union concern with ‘authority and jurisdiction’. Where employee participation schemes were implemented, these schemes reflected American approaches that retained management’s authority, rather than the European approach that devolved aspects of management’s authority to the workplace. At the time the Australian Workplace Industrial Relations Survey data was taken in 1989–1990, consultative committees were few in number and they were typically concentrated in large workplaces with active unions. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Beginnings of a more sophisticated management approach during the 1980s: employers more interested in employee participation in the wake of union and government interest in ‘industrial democracy’ employers had two main concerns: unions should not be the sole instrument of employee participation employee participation should be voluntary, rather than legislated Business Council of Australia’s interest in ‘new’ management styles based on employee participation In the 1980s, trade unions—and the Australian Federal Government, to a lesser extent—were increasingly interested in the broad issues of employee participation and ‘industrial democracy’. This prompted employers and their associations to seriously consider their positions, with some employer associations expressing some interest in giving employees more ‘say’ in the workplace. Davis and Lansbury (1986), however, saw that employers had two main types of concerns: unions should not be the sole mechanism through which these schemes were implemented any employee participation scheme should be voluntary, and not the result of legislation The most influential employee position was articulated by the Business Council of Australia (BCA) in It argued for the adoption of ‘new managerial styles’ that emphasised more participative and innovative human resource practices at the workplace, aimed at ‘tapping employees’ creativity rather than treating them as extensions of machines’ (BCA 1989, cited in text, p. 250). This approach distinguished between employee participation (which was considered to be a constructive and useful way of developing organisations and the quality of employee working life), and industrial democracy (which was based on union representation and strengthening the perceived rigidities of union-based regulation). Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Development of employee representation from the 1990s: Rhetoric of employer associations in this period highlighted the need for more and better employee involvement: increased professionalism of the HR/ER management function increased focus on internal activities (less interest in external activities) implementation of ‘new’ work organisation approaches requiring increased employee involvement In the late 1980s and the 1990s, the main employer associations were seeking to reduce the role of external parties—in particular trade unions and the AIRC—in workplace matters. A large component of the stated reason for this strategy was that employers sought a closer and more direct relationship with their workforce, unhindered by the representative efforts of unions and the cost structure imposed by the AIRC. Presumably, then, the decentralisation and deregulation of the ER system throughout the 1990s would enable the development of more participatory and representative structures. It is clear that employer approaches developed significantly throughout the 1990s. In what ways? The HR/ER function became more professional and strategic in its orientation. Practitioners were more highly educated than in previous decades, and more involved in senior-management decision-making. This new cohort of HR managers were more aware of the organisational benefits and the significance of increased workplace communication and employee participation. In the wake of ‘delayering’ and ‘downsizing’, some workplace managements were seeking to de-bureaucratise workplaces, find new ways of managing work design and workload, and improve workplace communication. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Recent studies of Australian implementation of management-initiated representation approaches: Evidence of increased effort by employers to improve workplace communication (Benson 2000, Kitay and Lansbury 1997). Increased use of employee briefings and other means of communication (Kramar 1999). Increased adoption of methods of employee participation but not increased employee discretion (Harley et al. 2000). But reduced prioritisation of employee participation and teamwork by HR staff (Fisher et al. 1999). There is evidence of increased interest from management in setting up consultative, representation and participation structures. Benson (2000) and Kitay and Lansbury (1997) found that Australian managements were making increased efforts to improve workplace communication. Kramar’s (1999) study of HRM practices in 334 organisations found that 60% of these organisations had increased their direct and indirect methods of communicating with their workforces, with team briefings being a major device used. In general, the communication direction was one way: from the top down. Kramar also found that 75% of surveyed organisations had established joint consultative committees, and that 40% of new committees were established in the three years prior to the data being taken in Harley et al. (2000) found a similar growth in consultative processes, but also found that these committees typically did not lead to increased employee discretion in the workplace. Interestingly, Fisher et al. (1999) found that the majority of HR practitioners did not anticipate that teamwork and employee participation would be a major issue in the next five or so years. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Employee representation: efficiency and equity
Clear theoretical evidence exists that effective employee participation results in improved organisational efficiency and effectiveness. Researchers have struggled to establish an effective means of measuring the relationship between participation and efficiency. Although there is clear theory to indicate that improving employee participation can result in increased efficiency and performance, there is a shortage of direct empirical studies demonstrating this. This problem arises from the methodological issues involved in collecting such data. Defining the relevant variables. What variables are important? ‘Measuring’ the right data, such as ‘quality of management’, or ‘internal organisational politics’. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Final observations Non-union representation is a growing issue in Australian public policy, given the decline in union representation. Increased level of employee involvement has significant implications for improved workplace equity and efficiency. Large body of theory points to the need for employee involvement. Australian Federal Government has sought to assist the development of collective and individual non-union representation approaches. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

Summary Widening ‘representation gap’, with adverse implications for workplace efficiency and equity. Ways of describing non-union employee representation: state-sanctioned and management-initiated direct vs indirect forms of representation consultative vs joint decision-making Management’s motives for improved employee involvement are unclear. Although data is limited, there is no clear evidence that employees have an increased role in workplace decision-making. There are methodological difficulties in determining a relationship between employee participation and organisational performance. Copyright © 2011 McGraw-Hill Australia Pty Ltd PPT slides to accompany Employment Relations: Theory and Practice 2e by Bray, Waring & Cooper

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