The Financial Times

Gennard & Judge (2002) (cited in Ed Rose 2004 p178) argued that the governments economical and legal policies have a major implication on the outcome of employee relations, therefore if the economic policies are directed towards full employment and maximum growth this can have the effect of strengthening the bargaining power of employees relative to that of employers. In an expanding economy the demand for labour increases which causes the price of those labour services to rise.

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However the case for the UK at this current time under the new coalition government is that parts of the economy are shrinking and the demand for labour services is falling which potentially could lead to redundancies and a rise in unemployment, which in December 2010 was recorded at 2.498 million (cited in Guardian 2011). In these instances the balance of power shifts in the employer’s favour and the employer’s bargaining power is strengthened. The coalition government is currently under a lot of financial pressure in respect of public spending, and there are changes happening around employee relations e.g.

Retirement Age and Equality & Diversity. These changes are being driven by the coalition government’s primary objectives of reducing public expenditure, encouraging economic growth and reducing the financial deficit (cited in Newstatemen, Vince Cable. Their aim is to reform the public sector, in terms of its total size as well as the terms and conditions of employment of its staff (e.g. pensions and redundancy terms) and cut spending to reduce the UK budget deficit to 2.1% from 10% by 2014-2015 with a long term objective to support the economic recovery and overall resource savings of 33% by 2014-2015 (cited in Comprehensive Spending review (2010) p72. With the spending cuts in place there is a likelihood that there will be changes in the UK, relating to industrial action especially around equal opportunities.

The Financial Times (2010) reported that 90% of executives in private and public sector organisations are expecting Britain to see an increase in industrial action, and has indicated to employer’s that a formal policy should be put in place. It was reported in 2004 that 73% of organisations have a policy compared to 63% of organisations in 1998. It was reported in May 2010 that “if we do see significant industrial action to resist such restructuring, the coalition government might well seek to tighten the rules on strike ballots” (cited in HR review 2010). Contradictory to the 2004 improvement it was reported in 2010 that the new coalition government are already facing charges of “not doing enough” in relation to equal opportunities (Cited in Personnel Today 2010).

Finally there could be changes to European Employment Rights due to the Conservatives being in power and having been vocal about their intension to decrease Europe’s influence in respect of UK employment laws (cited in HR review 2010). I feel that this will be hard to achieve in terms of legal and political reasoning. Overall the coalition government is dynamic and is implementing changes, however these changes are proving less supportive of employee relations and worker’s rights, because it would seem that as the government introduce new legislation it is not favourable to employees and the bargaining power of employer’s is strengthened. Another aspect is around the implementation of technology as this has an impact on the relative bargaining of employees and employers.

Webb and Webb (1920) (cited in Ed Rose 2004 p1), defined a TU as “a continuous association of wage earners for the purpose of maintaining or improving the condition of their working lives. Freeman and Medoff (1984) stated that TU provide workers with a “collective voice”. TU have played a huge role in industrial relations by helping manage employment relationship. They promote and protect the interest and terms and conditions of employment of their members in areas such as pay, holidays, health and safety, equal opportunities and employment law etc but also ensure that individuals are treated fairly. TU where possible ensure that there is a balance of power between employees and employers.

Over the years TUs have changed, Hyman (1975) p67, stated “it is now an era of post modernism where people want to live individualistically and this directly contrasts to trade unions”. This therefore is forcing TU to modify their role. Labour strengthened TU through Trade Disputes and The Trade Union Act 1927. Labour remained in power until 1979 and TU membership fluctuated between 1979- 2003, and peaked in 1979 when there were 13 million people (56% of the working population) (citied in lecture 4, Tony Bennett, slide 6) were TU members, this phenomenon was partly due to the principle of “closed shops” in many industries/ employer organisations.

In 1979 the Conservatives came to power, the leader Margaret Thatcher shifted the balance towards employers and restricted TU recognition through the Employment Act 1982. Blyton & Turnball (2004) p70, noted that the era of Thatcherism “deregulated trade union power by imposing tighter regulations”. The aim was to promote individualism; however this goes against collective bargaining. Thatcher believed that the best society was when men and women acted individually. There were a lot of restrictions during this time e.g. restriction on strikes and secondary picketing in the workplace.

Hyman (1989) stated “in the past the number of strikes recorded was largely dominated by manufacturing industries. In 1971, there were 7,890,000 manufacturing workers but by 2005 this had reduced to 3,184,000”, therefore strike activity had reduced and had resulted in trade memberships declining. When labour returned to power in 1997 they introduced laws to support TU and employee’s such as the fairness of work paper (1998) which was followed by the Employment Relations Act 1999.

Also the new labour government passed laws so that employee’s cannot be dismissed so easily for participating in strike ballots Salamon (2002) p452, stated “this is a step towards a right to strike”. Therefore this protected the nurses in 1999, who took part in a strike in relation to there pay and working conditions, this involved 27,500 nurses who stopped work and picketed 100 hospitals and this lead to 100 operations being cancelled in the first hour and 7,000 appointments cancelled (cited in Salamon (2002) p455.

Trends tend to be cyclical and depend on the economic cycle, but I feel that TU’s in the 21st century may have more purpose and less power and a reason for this decline could be globalisation/competitiveness, government power, reduced TU membership and a less sympathetic government. The advancements in technology could have an impact as individuals are able to access information in respect of there employment rights and therefore are less reliant on the support of TU’s. Michael White (2010) reported “an improvement in technology and ease of access to information has meant that employees “know their rights”.

CIPD (2010) define the psychological contract as “a perception of two parties, employees and employers, of what their mutual obligations are towards each other”. The contract is said to be based on trust, perception of fairness, job satisfaction, career progression and reward. If the psychological contract is breached by management there are a number of impacts this could have such as job dissatisfaction, employee disengagement and reduced commitment from employees.

It is important that everyone understands the contract so it is not breached. In recent years the contract was that employees demonstrated commitment to their job and in return the employers provided job security but this has rapidly changed and increasingly fewer employers can continue to offer this form of contract. Employers are replacing the idea of job for life with fair pay, training and development opportunities.

After analysing the approaches there seems to be one common denominator in all three approaches that being that conflict is inherent in the employment relationship and is inevitable. The difference in the three approaches therefore, is not of the existence of conflict, but rather the employer’s/manager’s response to conflict. The unitary approach hypothesises that a conflict free workplace is possible, if the objectives of the workers coincide with those of managers.

However in practise this is rarely ever the case. On the other hand, pluralists prefer to resolve conflict through consultation and compromise. Radicalists see conflict as an inherent characteristic of a capitalist society, which cannot be eradicated. With our prevailing employment legislation and the current economic climate it is highly likely that the majority of organisations will tend to use variations of the pluralist approach. The unitarist perspective would not be suitable in organisations today because of the redundancies that are happening therefore this conflicts the approach, however this approach would have been used in the 19th century, but is not suitable in today’s fast growing and complex business world.


Bennett T, Employee Relation Module (2010), lecture 4, slide 6, “What is the role of the Trade Unions in the 21st century”

Bray, M Waring, P & Cooper, R (2005) Employment Relations Theory and Practice

Blyton, P & Turnball, P (2004), Dynamics of Employee Relations, 3rd Edition, Basingstoke, Macmillan