Management of Industrial Relations: The Decline in Trade Union Membership and Density - Coursework Example

Name: Tutor: Title: The decline in Trade Union Membership Course: Date: Table of contents 1.0 Executive Summary…………………………………………………………………….……3 2.0 Introduction………………………………………………………………………...…...…..3 3.0 Employer Anti-union Strategies…………………………..……………………….………….4 3.1 The lockout strategy.............................................................................................................4 3.2 Individualizing Employment Relations…………………………………..…….…………5 3.3 Recruitment and Selection…………………………………………..………………….…6 4.0 Union Membership and Density………………………………………………………………6 4.1 Social factors………………………………………………………………………….7 4. 2 Economic factors…………………………………………………..…………………8 4.3 Job security……………………………………………………………………………9 5.0 Employer Responses to Workplace organization………………………………………........10 6.0 Conclusion…………………………………………………………………………………...10 7.0 References…………………………………………………………………………………....13 The decline in Trade Union Membership and Density 1.0 Executive Summary The 21st century has witnessed a substantial transformation in industrial relations. The most outstanding feature of these relations is the growing reliance on de-collectivization strategies by employers to influence the impact and role of trade unions. The decrease in union membership and density is significantly attributed to the hardening of the approaches used to counter trade union activities. Emphasis on individual employee contacts is a deliberate initiative by employers to de-collectivize bargaining. In an effort to develop workplaces that are free from trade unions, firms have resorted to intricate human resource policies and counter tactics meant to enhance the mandate and prerogative of the management function in organizations. Despite the reconfiguration in management practices that is characteristic of contemporary managerial functions, the changes in approach are largely attributed to state intervention through legislative and non-legislative measures that create incentives for organizations to implement anti-union strategies. 2.0 Introduction The organization for Economic Co-operation and development in Australia has resulted in employers developing more stringent anti-union strategies that are enforced through human resource management (HRM) functions and non union firms. By changing the framework within which trade unions operate, de-collectivization strategies have successfully reduced union power and influence. The magnitude of this decline in Australia is spectacular, by international standards. A study undertaken by Visser (2006) on union activity across the world indicates that between 1990 and 2003, Australia recorded the highest decline in union membership density internationally, with New Zealand coming a distant second. The decline is largely attributed to stronger collaboration between anti-union firms, business lobby groups and state policy makers. For the purpose of analyzing contemporary trends in industrial relations, this discussion identifies and explores management practices commonly used by employers in Australia to influence trade union membership and density, they include ; employee lockouts, disruption of organizing campaigns, individualization of employee bargaining, and human resource functions that involve recruitment and selection. 3.0 Employer Anti-union Strategies 3.1 The lockout strategy Lockouts were less common in Australia especially in the beginning of the Great Depression of the 1930s, but reemerged in the 1990s. The Liberal-National government that wars elected in 1996 legalized lockouts thereby empowering employers to have control over trade unions by coercing employees to sign non-union and individual contract agreements. The drastic decline in employee strikes in Australia, however, is an indication that the increase in disputes is largely attributed to lockouts. Lockouts can either be long-term or short-term. Long term lockouts commonly referred to as “big-bang lockouts” involve compulsion of unionized employees to enter individual agreements. Production workers are in such long-term disputes coerced into signing an AWA as a condition for returning to work. Big bang lockout strategies are mostly used by firms that have competitive difficulties especially in markets that are experiencing a decline in business, and managers resort to long-term disputes as a tool derail workplace union activity. Big bang lockouts are more prevalent in locations that have few employment options especially for production workers, or in sectors that have excess capacity and are on the verge of collapse. Bargaining lockouts are short-term de-collectivization strategies where employers seek to achieve better and quicker outcomes by coercing employees to compromise their bargaining objectives. Bargaining lockout approaches are often employed by companies as a tool to counter well organized union activities such as go-slow campaigns meant to pressurize companies through disruption of work schedules. In an effort to regain control and achieve quick solutions, companies respond by locking out employees. 3.2 Individualizing Employment Relations By enacting the Workplace Relations Act, the government of Australia effectively legitimized the use of AWAs as an instrument to de-unionize the workplace. By transferring employment terms to individual contracts, employees essentially entrust their employers with the responsibility to create a workplace that enhances individual dignity and respect. Individualizing of employment relations is founded on the premise that exclusion of unions enhances organizational flexibility and increases overall productivity of a company. An emerging trend in contemporary Australian industrial relations is the use of AWAs that come with wage increments as an instrument to discourage workers from unions and collective agreements. Individualizing of employment contracts in Australia has to a large extent been prompted by government legislation. By launching the Workplace Relations Act and introducing AWAs, the government effectively put in place a regulatory mechanism to disrupt union campaigns for collective agreements. The role played by courts in de-unionization has not been any less important, as most of the rulings made to settle industrial relations disputes have encouraged and empowered employees to insist on workers signing an AWA before they are considered for employment. 3.3 Recruitment and Selection An analysis of the role that HRM departments play in shaping the formation and activities of trade unions suggests that recruitment and selection policies are not just confined to hiring candidates that are most qualified for positions, but those that have the desired attitude towards trade union activity. According to, candidates that are considered to be union sympathizers are sidelined in the early stages of the selection and recruitment process. The de-unionization strategies employed by HRM departments to discourage collective bargaining and representation exemplify the hidden suppressive aspects of the HRM function (Freeman, 1980). 4.0 Union Membership and Density The variation in union density and membership has been explored through various approaches of study. Foremost is the explanation that is based on structural and institutional changes. Structural determinants of union membership mainly involve changes in employment structure, business cycles and other macro structural changes. According to Scruggs (2002), a decline in trade union membership and density is often associated with a shift in employment structure from industry to service. Institutional determinants focus on union membership as largely influenced by the “Ghent effect’. The Ghent effect refers to how national institutions such as the unemployment benefit scheme influence the probability of employees joining or not joining a trade union. Structural variables are more inclined to the economic interests that may encourage employees to unionize. The institutional perspective also highlights the impact of changing employment conditions on union density such as the increasing emphasis on contracts and emerging new forms of collective bargaining structures. The focus of institutional determinants has more to do with the influence of macro social structures on union membership and trade union density (Riley, 1997) Recent developments involving economic globalization have compelled organizations to redefine their competitive strategies. In an effort to optimize profits and stay globally competitive, companies are increasingly employing cost cutting mechanisms, a trend that has significantly impacted on employment relations. Cost cutting measures in labor mainly involve lowering of wages, cutting welfare benefits, workforce downsizing, and de-collectivization strategies meant to demean the influence of unions. The approaches generally amount to labor exploitation, resulting in the need for workers to develop a collective framework for bargaining for their rights. Workers join trade unions for various reasons that can be distinguished as social factors, economic factors and job security factors. 4.1 Social factors The higher the level of union density in the workplace, the higher the chances that employees will decide to join trade unions. The explanation to this argument is based on the social costume theory (Gundersen, 2003). The argument in the social costume theory is that trade unions are not formed not only to provide economic benefits for its members such as better wages and job security; they also create social norms that require employees to be members of trade unions. The pressure that norms evoke rationalizes union membership as an option to avoid imminent sanctions on the members if they violate the norms. Strong union membership density in the workplace thus implies there will be stronger social norms. Vissser (2002) observes theta employees will often yield to the pressure resulting from social norms because of the fear of loosing reputation and the indifference that may emanate from the rest of the workplace community. Trade union membership creates a sense of collaboration and belonging among workers. Unionism minimizes individualism and isolation in the workplace, thereby creating a big family where workers support each other and can voice their grievances more effectively. Workers may also join trade unions because of pressure from their peers who may feel betrayed and start acting indifferently. This trend is most evident in early strategies of trade union formation. In an attempt to preserve good relationships with peers without feeling discriminated, workers feel obliged tore the line by joining trade unions. 4. 2 Economic factors Economic factors that include wage increase and monetary benefits are key reasons why workers form or join trade unions. The rising cost of living compels workers to seek better remuneration so as to enhance their quality of life (Salomon, 2000). The importance of trade union membership is that workers are able to secure formal collective agreements with their employers, thereby improving employment terms and conditions. A bargaining process and formal agreements essentially need a legal framework, which makes it hard for workers to pursue individually. The interest to join or renew membership in a trade union is depended on the success of the union in successfully advocating for the interests of the workers. According to Brett, (1990), employers may agree to terms of improvement of workers’ wages, but mail fail to implement agreements. The role of trade unions is thus to enforce existing awards, as well as bargain for improvements where workers feel are inadequately compensated. In an effort to position themselves as good employers, some companies provide for employees direct benefits such as training programs and facilities, insurance coverage, education assistance and holiday allowances. Workers that are not awarded similar benefits regard that to be a form of exploitation or inconsideration by employers and thus resort to collective bargaining through unions (Maimunah, 2007) 4.3 Job security Trade unions serve the important function of covering employees against unfair dismissal from work. Collective representation through unions empowers workers and provides them with the legal authority to protect themselves against workplace discrimination, exploitation and unfair treatment. In the event of an economic slowdown that reduces business activity and decreases profits, employees react by resorting to unfair dismissal and unethical retrenchment in an effort to cut down costs. Trade unions provide a legal framework to cushion workers against employer actions that compromise workers’ job security and fair remuneration for labor (Kjellberg, 2011). In situations where the job market is shrinking and opportunities for securing alternative employment are minimal, workers are likely to proactively unionize to obtain job security and discourage employers from cutting wages. Economic slowdowns, however, may compel employers to employ strategies aimed at discouraging formation and activities of trade unions. Measures to demean union activity in the workplace can however be counterproductive, as they may provide the impetus for employees to be proactive in organizing themselves against violation of their rights or unequal and unfair treatment. As observed by Davis (1955), workers who feel isolated and unable to influence decisions made by managers in regard to job security and remuneration will often resort to collective bargaining processes through trade unions. 5.0 Employer Responses to Workplace organization From the late 1990s, industrial relations in Australia have been pervaded with de-collectivist strategies aimed at diffusing campaigns by trade unions to build membership and enhance workplace organization. According to Cooper (2003), the 1990s marked the resurgence of strategies by firms to obstruct unions from building membership and employee organization in the workplace. The transformation in relations is linked to a combination of factors such as changes in policy that significantly influenced employer strategies. Amendments in policy from the 1990s gave employers the confidence and capacity to effectively derail organization in the workplace. A Finance Sector Union official once observed that employers were going as far as proactively fixing issues that were affecting employees as a means of denying them a reason to organize themselves around a common course (Ebbinghaus and Visser, 1999). The technological advancement and changes in the legal framework have enabled employers to disrupt effective contact among employees, and between employees and their leaders. In the Union Campaigns Survey undertaken in Australia in period 204-2005, it was established that campaigns initiated by unions to develop workforce organization had largely focused on building union membership. Secondly, the campaigns aimed at increasing the representation of union delegates, and thirdly, they aimed at instituting a joint union agreement. Findings from the survey indicate that employers engage in outright harassment of union activists, and openly discourage employees from getting involved in union activities. The message is clear that managers have clear instructions to push forward an anti-union agenda. 6.0 Conclusion Union membership especially in Australia has been on a steady decline since the 1990s. The decline in union density is a reflection of how employment relations have changed significantly in the past century, a trend that is attributed to a shift in employer tactics. Three dimensions of employer strategies aimed at de-unionizing the work-place have been explored in this discussion: the reemergence of employer lockouts, increased emphasis on individual contracts meant to de-collectivize bargaining, and human resource approaches aimed at de-collectivizing workplace relations. De-collectivization of employment relations has been fronted by employer lobby groups since 1999, the federal government and state instruments notably the non-industrial courts have played a key role in support of anti-union employer initiatives. This discussion has particularly underscored the involvement of the state in redefining the legislative framework, resulting in a significant transformation in employment relations. Australian employers in particular have significantly benefited from state support in fostering managerial policies and approaches that effect anti-union strategies. The foremost determinant of whether an employee will or will not join a trade union is peer influence and the density of union membership in the workplace (Pierce, 1999). There is a higher chance of employees joining a trade union if membership density is high. Union membership may certainly increase when members strive to avoid the social repercussions of not joining, such as isolation and indifference. The reason as to why workers join trade unions is largely attributed to the expectations that colleagues have of them based on social norms in the workplace. 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