Unit 2.7 Industrial / employee relations (HL)
Remember Tasty Bites?
One year ago! Things improved and then....
One year ago, the BBC ran an article on a popular local sandwich maker, ‘Tasty Bites’. They smelled a rat after a stream of devastating reviews were left online.
The company had performed a complete overhaul on their production, but things have unfortunately worsened regarding industrial relations between staff and the managerial team!
In a shocking turn of events, Tasty Bites, the once-beloved local sandwich maker, is facing a new crisis. A year after narrowly avoiding bankruptcy due to poor quality and devastating reviews, the company is now grappling with internal strife. Reports suggest that the workforce is in turmoil as wages per hour remain frozen, in relation to rising inflation and non-financial benefits are slashed amidst falling profits.
In a follow-up interview, discontent echoes through the company. Employees express frustration over the conflict between their needs and those of the manager, Richard Bakersfield. With low morale and increased absenteeism, the atmosphere is tense. Some staff members are vying for power and the owner’s favor, hoping for promotions to alleviate their financial woes.
As Tasty Bites struggles to overcome its internal challenges, power struggles as the threat of industrial action looms large! Whilst the last thing Rob Bakersfield wants is industrial action, he doesn’t want to seem like a soft touch or a push over by staff!
Tasty Bites therefore find themselves on the edge of potential strike action as staff talk more and more about making a stand having been dissatisfied with talking to their trade union representative! Tensions are high since one member of staff burst into Richard Bakersfield’s office and demanded more money given that inflation was now around 8% and made the claim that “we’re getting poorer by the day”! Later in the day, a threatening memo was circulated by Richard stating,
“This member of staff no longer works for us!”
Nervous boss!
Richard had recently overheard the following conversations between staff,
Ben: “I think we need to produce less! Let’s go at our own pace! We’ll make less sandwiches if we all notch down the pace a bit and Richard will soon notice”!
The second member of staff (Julie) replied:
“Yeah, before we do anything crazy, let’s talk to the rep and see what we can get through discussion. I don’t want to lose my job”!
Who fires first? What will the boss do?
Whilst staff are happy to talk about their grievances, they are nervous about what could happen! They are aware that the boss has options too! Whilst they would like to improve their pay, they don’t want to ‘fire first’ and risk being fired or worse, do irreparable damage to Tasty Bites!
QUESTIONS:
- Define (with reference to Tasty Bites), the term industrial action [2]
- Identify from the case, two sources of conflict [2]
- Explain how being in a trade union may have helped the case of the staff member who was fired! [4]
- Explain briefly (with reference to the case) why the member of staff exclaimed that, “we’re getting poorer by the day” [4]
- Identify what type of industrial action Ben is referring to from his quote [2]
- Identify what type of industrial action Julie is referring to from her quote [2]
- Explain two potential risks to Richard Bakersfield and Tasty Bites if the discontent at Tasty Bites is allowed to continue [4]
- Explain the role of a trade union representative in a situation like this [2]
- Explain at what point it may be useful to start the process of conciliation and arbitration [4]
- Suggest why a manager / owner (like Richard Bakersfield) may be reluctant to agree to staff demands [2]
- Recommend two possible types of industrial action that have the greatest chance of success for the Tasty Bites workers [10]
Unit 2.7 Industrial / employee relations (HL)
Changes of Contract:
- Description: Employers may unilaterally alter the terms and conditions of employment contracts.
- Process:
- Implement changes such as adjustments to working hours, job responsibilities, or benefits.
- Notify employees of the changes and provide necessary information.
- Changes may be temporary or permanent.
- Purpose: To adapt to business needs, improve efficiency, or address financial challenges.
- Description: Employers may decide to permanently cease operations of a business or a specific facility.
- Process:
- Announce the decision to close the business.
- Undertake necessary legal and procedural steps for closure.
- Address issues such as severance packages for employees.
- Purpose: Due to financial difficulties, strategic shifts, or changes in market conditions.
Lockouts:
- Description: Employers may initiate a lockout to prevent employees from working, often as a negotiation tactic during labor disputes.
- Process:
- Temporarily prohibit employees from entering the workplace.
- Typically employed as a response to employee strikes or as a preemptive measure.
- Purpose: To exert pressure on employees, gain leverage in negotiations, or encourage acceptance of employer proposals.
- Description: Employers may threaten to make employees redundant (terminate their employment) due to financial constraints or restructuring.
- Process:
- Communicate the possibility of job losses to employees.
- May be used as a negotiation strategy or to influence employee behavior.
- Purpose: To achieve concessions from employees, such as wage freezes or changes in working conditions, by creating a sense of job insecurity.
- Description: Employees, often represented by a labor union, engage in negotiations with employers to reach agreements on terms and conditions of employment.
- Process:
- Involves discussions on wages, working hours, benefits, and other workplace conditions.
- Negotiations may lead to the creation of a collective bargaining agreement (CBA).
- Purpose: To secure fair and satisfactory terms of employment, representing the collective interests of the workforce.
- Description: Employees strictly adhere to the rules and procedures outlined in their contracts without exceeding expectations.
- Process:
- Employees follow all prescribed rules meticulously, avoiding any discretionary efforts.
- Deliberate slowdown of work pace within contractual obligations.
- Purpose: To highlight dissatisfaction with management or working conditions without formally striking, disrupting normal operations through strict adherence to existing rules.
- Description: Employees collectively refuse to work for a specified period, often as a protest against unfavorable working conditions or disputes with the employer.
- Process:
- Decision to strike is usually preceded by a voting process among employees.
- Involves cessation of work for a defined duration.
- May include picketing or other forms of public protest.
- Purpose: To express grievances, demand better working conditions, or negotiate improved terms with the employer.
Once upon a time in a small town, the employees of a struggling factory faced challenging working conditions and stagnant wages. Frustrated and eager for change, they hastily decided to take industrial action without exploring alternative avenues. Little did they know that their impulsive move would lead to catastrophic consequences.
Instead of engaging in patient collective bargaining, the employees opted for an immediate strike, hoping it would force the factory owner to address their concerns swiftly. The strike, however, dealt a severe blow to the already fragile business. Orders were lost, customers sought alternatives, and financial losses began to mount.
As the days turned into weeks, the factory’s financial woes deepened. Unable to sustain the operation, the owner faced a difficult decision. Regrettably, the only viable option seemed to be closing the factory permanently. With no business to support it, every job within the factory was lost.
The cautionary tale serves as a reminder that taking industrial action too quickly can lead to unintended and devastating consequences. The hasty decision not only failed to bring about positive change but also resulted in the demise of the very source of employment the workers sought to improve.
In hindsight, it became evident that a more strategic approach was needed. Patiently engaging in collective bargaining, understanding the business challenges, and working collaboratively with the owner might have yielded better outcomes. Through negotiation, compromises could have been reached, leading to improvements in working conditions and fairer compensation.
This cautionary tale emphasizes the importance of thoughtful consideration and collaboration before resorting to drastic measures. In the complex dance of industrial relations, a rushed decision to take industrial action may not only fail to achieve the desired goals but could, in fact, jeopardize the livelihoods of all involved. In the world of business, taking a step back and exploring alternatives before leaping into industrial action can be the key to finding sustainable solutions and preserving jobs.
SUGGESTED ANSWERS TO
1 Define (with reference to Tasty Bites), the term industrial action [2]
Industrial action at Tasty Bites refers to collective actions taken by the workforce to express dissatisfaction or protest against unfavorable working conditions. In this case, it includes the potential threat of a strike due to frozen wages and reduced non-financial benefits.
2 Identify from the case, two sources of conflict [2]
Conflict between staff and management over frozen wages and reduced non-financial benefits.
Power struggles and internal competition among staff members for promotions and the owner’s favor.
3 Explain how being in a trade union may have helped the case of the staff member who was fired! [4]
Being in a trade union provides the fired staff member with representation and support. The trade union can challenge the dismissal, negotiate on behalf of the employee, and potentially take the case to industrial tribunals. This collective bargaining power strengthens the employee’s position and ensures fair treatment.
4 Explain briefly (with reference to the case) why the member of staff exclaimed that, “we’re getting poorer by the day” [4]
The staff member expressed concern about their diminishing real income due to frozen wages amid rising inflation (around 8%). As inflation erodes the purchasing power of their wages, employees feel financially strained, contributing to dissatisfaction and a sense of economic decline.
5 Identify what type of industrial action Ben is referring to from his quote [2]
Ben is referring to a form of industrial action known as a “go-slow” or intentional slowdown of work pace to reduce production output and put pressure on management to address employee concerns.
6 Identify what type of industrial action Julie is referring to from her quote [2]
Julie is referring to the approach of collective bargaining through discussion and negotiation with the trade union representative before resorting to more drastic forms of industrial action like strikes.
7 Explain two potential risks to Richard Bakersfield and Tasty Bites if the discontent is allowed to go on [4]
Decreased productivity: Prolonged discontent may lead to reduced employee morale and productivity, affecting the overall efficiency of Tasty Bites.
Reputation damage: Continuous internal strife can harm the company’s reputation, making it less attractive to customers and potential employees.
8 Explain the role of a trade union representative in a situation like this [2]
A trade union representative serves as an intermediary between employees and management. In this situation, the representative would negotiate on behalf of the staff, address grievances, and attempt to find mutually beneficial solutions, potentially preventing the need for more extreme industrial actions.
9 Explain at what point it may be useful to start the process of conciliation and arbitration [4]
The process of conciliation and arbitration becomes useful when negotiations between the trade union and Tasty Bites reach an impasse. If attempts at collective bargaining fail, conciliation aims to mediate and resolve the dispute. Arbitration may be initiated if conciliation does not yield results, providing a binding decision to settle the disagreement.
10. Suggest why a manager/owner may be reluctant to agree to staff demands [2]
A manager/owner may be reluctant due to financial constraints, concerns about the company’s profitability, or the fear of setting a precedent that could lead to similar demands from other employees. Additionally, there may be a desire to maintain control and authority within the organization.
11 Recommend two possible types of industrial action that have the greatest chance of success for the Tasty Bites workers [10]
In this case, you can see that workers have a reasonable grievance, but simultaneously, they are afraid to ‘fire first’! In this case, from a commonsense point of view, it may be worth starting with collective bargaining as a method with maximum employee participation. In this way, views can be aired reasonably through the trade union representative!
Otherwise, there are two more suggested methods;
Concerted Work-to-Rule Action: Employees can collectively adhere strictly to the existing rules and procedures, slowing down operations without formally striking. This may increase pressure on management without immediately jeopardizing jobs.
Strike: Employees could strategically choose specific critical departments or roles to go on strike, causing disruptions in key areas while minimizing the overall impact on the business. This targeted approach may enhance the effectiveness of the industrial action.
