Comparative IR Systems

in UK and USA
INDUSTRIAL RELATIONS IN UNITED
KINGDOM
• MEANING OF INDUSTRIAL RELATION :

Industrial relations are concerned with the systems

and procedures used by unions and employer to
determine the reward and other conditions of
employment to protect the interest of employed and
their employers and to regulate the ways in which
the employers treat their employees.
The industrial relations parties

Three parties involved in IR:

• EMPLOYEE

• EMPLOYER

• GOVERNMENT
UK -IR
Trade unions
• Unlike other Western European countries, Britain has
only one main union confederation known as the
“Trade Union Congress” (TUC).

OBJECTIVES:
• Has no direct role in the collective bargaining

• Considered as ‘left-wing’ and as an important social

partner with the British Labour Party

• TUC is considered as coordinating and not controlling

body
Collective Bargaining

•Trade unions are the main employee

representative channel in UK workplaces. They
must be recognized for bargaining purposed by
the employer: there is no automatic legal right
to collective bargaining. Collective agreements
are not legally binding in the UK

•The IR system prevalent in UK relies on twin

mechanism of voluntary negotiation and joint
consultation for resolving differences and
maintaining peace and harmony in the industry
Role of
government
Government passed acts to improve the status and
functioning of TRADE UNIONS in three ways:

• By recognizing their legal entity

• By providing voluntary registration with the

certification officer

• By defining their functions, rights and

responsibilities .

Government also provided statutory recognition of the

employers association.
INDUSTRIAL RELATIONS IN USA
Growth of IR on USA

• Collective Bargaining .

• Strike( Boston Telephone Strike-1912):

telephone rates increased but telephone
operators salary half of that of govt. clerk .

• ‘Right to Organize’ granted by American

Constitution: Growth of Trade Union and free
bargaining.
• Industrial relation governed by National Labor
Relation Act 1935 .
Unions in
USA
• Local Union:
– Works as collectors of fees and dues,
– solve important grievances
– local union power to call strike and negotiate
agreements without formal approval from
National Union
– Officers of Local union- President, Vice President

• National Union:

– Complete autonomy in fixing dues, formulate

policies, negotiating agreements, calling strikes and
organize new local unions
– union members are tightly regulated by the National
Labor Relations Act (1935)
Two important Central organizations:

1. AFL ( American Federation of Labour)-1886

– 1st and largest federation of Unions in USA .

– The Federation of Organized Trades and Labor Unions

merged to form AFL Craft union

– Conservative as didn't’t challenge capitalism .

– The AFL was always hostile to Communists.

– Prohibition of child labor, a national eight hour day, and

exclusion of foreign contract workers.
2. Congress of Industrial Organisation (CIO-
1935)
– Organise workers into industrial unions
– Dissenters (Opposition)of AFL
– Later both merged to form AFL-CIO in 1955 which
has regional councils and local units all over USA

– Now: 60 unions in USA and Canada affiliated to

AFL- CIO( American Federation of Labour-
Congress of Industrial Organizations)

– Major activities of American Unions:

• Represent members at collective agreements
• Negotiations over employment relationship
• Joint decision with management
Collective Bargaining

• The National Labor Relations Act was enacted with the

objective to strengthen collective bargaining along with
the objective to curtail certain private sector labor and
management practices, which can harm the general
welfare of workers, businesses and the U.S. economy

• The NLRA makes it unlawful for an employer to

discriminate against an employee because of that
employee’s union activities or affiliation. Also,
employers cannot threaten or coerce employees for
engaging in union activity nor can they make promises
to employees in exchange for their not engaging in
union activities.
Government’s Role

LABOUR LEGISLATIONS IN US:

• Norris La Guardia Act, 1932

• Wagner Act, 1935 Taft- Harley Act, 1947

• Landrum Griffin Act, 1959

Legislations in USA
1) Norris-La Guardia Act-1932

– It established that that employees should be

free to form unions without employer
interference

– Unions could enter into collective bargaining

– No unfair employment contracts

– The act Banned Yellow dog contracts,

which were documents some employers
forced their employees to sign to ensure they
would not join a union; employees who
refused to sign were terminated from their
jobs.
2) Wagner Act-1935

– Earlier named: National Labour Relation Act

– Protection of employees’ rights to organize
– Right to strike
– Secret ballot elections for representative
unions
– Engage in union activities, to bargain
collectively without coercion of employer
– Employer can bargain with union
regarding
wage, bonus, terms and conditions of
employment
3) Taft-Hartley Act-1947

– Named as Labour-Management Relations

Act
– Amended Wagner Act
– Balance powers of Labour and management
in collective bargaining relationship
– Right to self-organize, to form, to join and
assist labour organizations
– Injunction on strikes affecting national health
or safety
– Established Federal Mediation and
Conciliation Service( FMCS): assist in
setting contracts without work stoppages
and maintains arbitrators to decide contract
interpretation disputes
4) Landrum-Griffin Act-1959

– Regulates labour unions' internal affairs and

their officials' relationships with employers
– Bill of rights for union members- equal rights in
voting,
– freedom of speech in union matters,
– Right to sue their unions
– No financial dealing between management and
union
– Protect the union members from possible
wrong-doing
 Reasons for decline in trade
unionism in USA:
• More white collar jobs and part-time jobs

• Centralized collective bargaining (national and not

local level)
Comparison between IR systems
UK
in and USA
• Industrial relations systems and developments play an
important part in determining economic, employment
and social outcomes and are thus a key area of
comparison

• Comparison of employment practices

– Studies about employment practices of British
subsidiaries show that they allow local autonomy
and blend in more to the local style
– US MNCs has shown that they are relatively
centralized and ethnocentric(Judging other
cultures negatively) in their HRM and IR
practices.
Comparison
• Comparison of Trade Unions:
– Trade unions and collective bargaining are
perceived as something to be deliberately
avoided.
– In the US, for example, the non-union sector
has grown rapidly over recent decades.

• Trade union Organization:

– Despite diversity and sometimes division
at national level, trade unionism in the current
and enlarged UK is characterised by a high
degree of unity and coherence(Strong) than
USA.
Comparison

• A common trend across the UK the USA is towards

consolidation and merger of trade union
organisations.

– The number of UK has been reduced by mergers in

recent years , while the number of member unions
of most national union confederations has
declined .

– In the USA, the number of unions affiliated to

AFL- CIO has fallen from 96 in 1985 to 64 today.
Comparison
• Trade Union membership and density:

– Overall, union membership has generally been

falling across the industrialised market
economies in recent decades .This decline
seems to have occurred relatively uniformly in
both UK and the USA

– Still, the average trade union density in the

UK is more than twice that in the USA.
Comparison
• Comparison of Employer Unions:

– In the UK, there is essentially a single umbrella

organisation (at least for the private sector)
representing companies' employer and
business/trade interests

– The USA has no identifiable employer body with an

industrial relations role.
Comparison
• Comparison of Collective Bargaining:
– The level at which collective bargaining is conducted
is one of the most basic differences in industrial
relations between UK on one side, and the USA on
the other.

– Collective bargaining plays a key role in

industrial relations in UK . In USA, bargaining is
a relatively marginal activity

• .