Managing People during Economic Transition: The Development of HR Practices in China

TEAM JABAWOKIE DIANNE,SEAN,HEMA,GRAIG,RYAN & SHAMI 2012/11/28

LABOUR RELATIONS

Labour Relations
1. What is Labour Relations 2. Union 3. Why Employees form Unions 4.Objectives of Trade Unions 5. Collective Bargaining 6. Workers Rights 7. Industrial Relations Act IRA 8. Labour Relations During the Reform 9. Problems with the Labour Reform 10. A Way Forward 11. Improving Labour Relations

Labour Relations
The term labour relations, also known as industrial relations, refers to the system in which employers, workers and their representatives and, directly or indirectly, the government interact to set the ground rules for the governance of work relationships. A labour or industrial relations system reflects the interaction between the main actors in it: the state, the employer (or employers or an employers association), trade unions and employees (who may participate or not in unions and other bodies affording workers representation). 1
1

Trebilcock Anne. Labour Relations and Human Resources Mgt. (Internet 2012/11/15)

Labour Relations
Labour Relations is a key strategic issue for organizations because the nature of the relationship between employers and employees can have an impact on morale, motivation and productivity. 2 A labour relations system incorporates both societal values (e.g., freedom of association, a sense of group solidarity, search for maximized profits) and techniques (e.g., methods of negotiation, work organization, consultation and dispute resolution).1 It sets the formal or informal ground rules for determining the nature of collective industrial relations as well as the framework for individual employment relationships between a worker and his or her employer.
1 Trebilcock Anne. Labour Relations and Human Resources Mgt. (Internet 2012/11/15) 2 Mello, Jeffrey; Strategic Management of Human Resources , pg. 530

Unions
The classic definition of a trade union is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment (Webb and Webb 1920). Trade unions reflect the conviction that only by banding together can workers improve their situation. Trade union rights were born out of economic and political struggle which saw short-term individual sacrifice in the cause of longer-term collective gain. They have often played an important role in national politics and have influenced developments in the world of work at the regional and international levels.

Why Workers Unionised

Employees seek to form unions because of the perceived economic, social and political benefits of organization: Higher or more equitable wages Better or expanded benefits Greater job or employment security (contracts) Affiliation and sense of community (brotherhood)

Sense of power/influence in numbers (solidarity/voice)2

2 Mello, Jeffrey; Strategic Management of Human Resources , pg. 532

Objectives Of Trade Unions

Trade unions are formed to protect and promote the interests of their members. Their primary function is to protect the interests of workers against discrimination and unfair labor practices. Trade unions are formed to achieve the following objectives: RepresentationTrade unions represent individual workers when they have a problem at work. NegotiationNegotiation is where union representatives, discuss with management, the issues which affect people working in an organization.

Objectives Of Trade Unions

Voice in decisions affecting workersThe economic security of employees is determined not only by the level of wages and duration of their employment, but also by the managements personal policies which include selection of employees for lay offs, retrenchment, promotion and transfer Member services :
Education and training Legal assistance Financial discounts Welfare benefits

Challenges Provided by Unions

Organized labour will have an impact on how organizations perform: When workers unionize, the employee/management power balance within the organization is redistributed. The process of unionization involves bringing in outside players, union representatives who then become an additional constituency whose support must be gained for any new and ongoing management initiatives. A unionized work setting can greatly impact an organizations cost structure, particularly raising payroll expenses and affecting the efficiency of work processes.
2 Mello, Jeffrey; Strategic Management of Human Resources , pg. 532

Collective Bargaining
Collective bargaining between the union and the employer covers various terms and conditions of employment. There are no set requirements to the terms or contents of a collective agreement, but bargaining items are classified as mandatory, permissive and prohibited. Mandatory: items introduced in good faith by either party, they consist of the economic terms of employment wages, hours, working conditions etc.

Permissive: discussed if both parties agree, items include benefits for retirees, disciplinary procedures etc
Prohibited: items that neither party can discuss, such as discrimination in hiring, employer paying for work not done etc.

Collective Bargaining

2 Mello, Jeffrey; Strategic Management of Human Resources , pg. 536

Workers Rights and Responsibilities

Workers Rights and Responsibilities Rights and responsibilities in the workplace are key principles of decent work. They include the right to maternity protection, minimum wage and a safe and healthy work environment. The Rights and Responsibilities at the Workplace are enshrined in the Labour Laws of Trinidad and Tobago and are inclusive of terms and conditions of work namely: Rate of Pay Hours of Work Overtime Worked Payment for Public Holidays Sick Leave Vacation Leave Meal Break

Rest Period
Source: Ministry of Labour Web Site.

Workers Rights and Responsibilities

Trinidad and Tobago has ratified eight (8) Core Conventions of the International Labour Organization which outline these fundamental rights and provides guidelines for labour standards as practised in our country. The Ministry of Labour and Small and Micro Enterprise Development is the Ministry with responsibility for the recognition, adherence and compliance to Labour legislation and Labour standards. The Ministry has established the appropriate institutional and legislative framework for the implementation of basic rights for all workers through the Labour Inspectorate Unit and the Occupational Safety and Health Authority (OSHA). The Labour Inspectorate Unit of the Ministry of Labour and Small and Micro-Enterprise Development, ensures that both employers and employees are aware of the rights of workers and that these rights are respected.
Source: Ministry of Labour Web Site.

The Industrial Relations Act of Trinidad

The Industrial Relations Act of Trinidad & Tobago is an extensive, 67-sectioned act that incorporates several elements of the nation's industrial economy and labor force. The act includes provisions and regulations for dealing with worker disputes.

Read more: The Industrial Relations Act of Trinidad | eHow.com http://www.ehow.com/facts_6872725_industrialrelations-act-trinidad.html#ixzz2CbhjIXgr

Labour Relations during the Reforms

As part of the features of a socialist country, labour relations in China are supposed to involve a mutually cooperative and mutually beneficial relationship among the state, enterprises and employees The unions in China served as a pillar supporting state power and were used to transmit the Party line to workers, encourage production, engage in political education, and execute a range of welfare chores

Case Material

Labour Relations during the Reforms

The trade union constitutions stated that unions were Chinese working-class mass organizations led by the Chinese Communist Party and formed voluntarily by workers and staff members. However, the Party dominated from the outset, as it controlled the policymaking of unions, supervised policy implementation, and scrutinized and evaluated the performance of unions cadres

The Party also appointed senior union staff and these officials sometimes swapped roles with enterprise managers
Case Material

Labour Relations during the Reforms

The unions had to undertake endeavours in the four main areas of protection, construction, participation and education First, the unions had to protect and defend employees legitimate rights, safeguard their interests and be their caretaker. They needed to channel employees opinions, needs or grievances about their work and life to the Party and higher authorities so policies could be adjusted. Second, trade unions had to organize employees to fulfil state production plans, and stimulate employees enthusiasm for work in order to raise productivity. This usually involved launching socialist labour emulation campaigns to encourage workers to participate in technical innovation activities and recommending outstanding employees as models for others.
Case Material

Labour Relations during the Reforms

Third, the unions had to educate and prepare employees to exercise their democratic rights in management participation. Finally, trade unions were required to conduct ideological, cultural and technical education programs for employees to raise their political consciousness, and enable them to act according to the Partys policies as well as to be competent in their positions.
Case Material

Labour Relations during the Reforms

The trade unions four broad aims covered two major functions: administration and representation. Trade unions were always required to follow policies and regulations of the Party and the state both before and during the reforms and were thus disproportionately geared to the administrative function rather than representative Since the reforms, management (especially managers in foreign invested enterprises and private-owned enterprises) has been granted more autonomy to hire and fire employees, to determine employee compensation packages and to abolish lifetime employment.

Labour relations in China no longer exist just between employees and the state, but also between workers and foreign investors or their representatives, and between private employers and managers who have become legal representatives of enterprises.
Case Material

Labour Relations during the Reforms

It has been reported that many labour relations disputes have occurred since the reforms due to unjustified dismissals, inequitable wage packages and even physical punishment Trade unions played an important role included developing a series of labour-related laws and regulations, such as a Labour Protection Law and Minimum Wage Law Assisting and advising individual workers when they sign labour contracts and supervising the implementation of contracts. Advocating the adoption of a collective contract and signing the contract on behalf of employees being actively involved in mediation of labour disputes; and supervising the implementation of Labour Law within the enterprise.
Case Material

Problems with the Labour Reform

Chinas problem in industrial relations was not only a result of the process of market reform but also from the state-interventionist (corporatist) institutional arrangements. Firstly, the state dominated trade union system was incapable of representing workers interests in the employment relations system. Second, a real workers participation system in the restructuring process was lacking.

Problems with the Labour Reform

Thirdly, Chinese workers lacked a labor protection policy and mechanism in dealing with the results of rapid market reform. Fourth, industrial policy based on low wages and poor working conditions had induced a worsening situation of employment relations. Fifth, management practices induced different outcomes of employment relations when a strategic concern was placed in the first place.

Problems with the Labour Reform

Trade unions in China are still recognized as the administrative arm of the party-state. Workers do not believe that the trade union is the representative and defender of the workers interest. As described in previous section, trade unions first must fulfil their obligation to the party-state, to the enterprise, and to the worker, in a descending order. Trade union leaders at the workplace play multiple roles. Most of them have a role in personnel management, and they also act as secretary of the CCP committee and then as the leader of the union. At upper levels, trade union leaders are appointed by the party and very often their positions are exchangeable between local government and the management of the state-owned enterprises. They take orders directly from the party, not from the union members.

Problems with the Labour Reform

The concept of collective bargaining in China is not similar to that of industrialized economies. Collective bargaining is seen by trade union leaders to fulfill the orders of the party-state. It is not a voluntary process between labour and management. All negotiated collective contracts have to be approved by the government. Collective bargaining in state-owned enterprises is particularly difficult in terms of wage-negotiation because the state may still control the budget of the firm.

A Way Forward for Chinas Labour Relations

China has the largest population in the world with a labour force of over 778 million people in 2005. Job creation and developing a competitive labor market is a central part of economic reforms in China. Human development and resources is the central role of economic activities, therefore, institutions would have an impact on their economic development with the way they influence humans resources and behaviors.

A Way Forward for Chinas Labour Relations

Improvement in Staff or Labour Relations: Proper labour relations ensures that there is effective communication between management and staff to: 1. Secure maximum cooperation from staff 2. Motivate staff to give their best by ensuring that they feel fairly treated 3. Understand the overall direction and values of their Company and their departments, 4. Understand how decisions that affect them have been reached.

Improving Labour Relations

Management should communicate regularly and openly with staff

Staff should be consulted on matters that affect them

Problems and disputes should be resolved through discussion and consultation The Government should uphold the resolutions of the International Labour Organization conventions Management should devise and encourage activities that contribute to staff's well being.

Key Components of Effective Labour/Staff Relations

Securing staff commitment: Staff commitment is crucial to providing the quality of service Dispute resolution: Disputes between management and staff should be avoided by prompt and constructive discussion between the two sides. Addressing grievances: develop an open and fair system to deal with complaints and appeals from staff.

Welfare: provide welfare and recreational facilities for staff to maintain morale and enhance their loyalty.