The Changing Roles of Management and Unions within the Employment Relationship

Introduction
Over the last three decades the employment relationship has undergone a shift from a collective
orientation an individual one. This has been marked by the use of the term employee relations
instead of industrial relations to emphasise the changing nature if the employment relationship
(Lewis, et al., 2003).
Against a backdrop of increasing public concern over rising industrial conflict and decentralised
shop-floor bargaining, the Donovan Commission (1968) was charged with conducting an in-depth
examination of industrial relations and making recommendations for reform (Banks, 1969, p. 335)
Fox (1966)argued the employment relationship could be viewed from one of two incompatible
frames of reference; the unitarist, in which employer and employee are seen as working in harmony
to meet common goals and the pluralist, which recognises the legitimate interests of separate but
interdependent groups (Cradden, 2011). Fox (1974) later introduced a third radical frame of
reference, in which the employment relationship is seen as entirely illegitimate, existing solely to
serve the interests of the employer.
While the pluralist perspective may have been dominant in the 1960 and 70s the advent of Human
Resource Management (HRM) in the 1980s saw a reassertion of the management prerogative and a
decisive shift towards unitarism as the dominant perspective (Storey, 1992). Originating the in the
matching model of the Michigan School, as developed by Fobrum et al (1984)and the Harvard
School as developed by Beer et al (1985), HRM attempts to maximise organisational integration with
employee commitment and flexibility (Guest, 1987). HRM sees the interests of managers and
employees as aligned (Delaney and Goddard,2001), sharing common goals and a mutual interest in
their outcomes (Macky & Johnson, 2000, p. 15) (Walton, 1985).
The emergence of HRM coincided with the decline of large scale, traditionally unionised,
manufacturing industries, the predominance of the service sector, fewer workplaces employing large
numbers of people and a rise in the number of part time employees (Armstrong, 2009, p. 895).
Trade union membership has declined from a peak of 13 million in 1979 to 6.4 million in 2011.
(Brownlie, 2012), with a corresponding fall in coverage of collective agreements (Archur, 2011, p.
13)These changes were accompanied by changes in the focus governmental macro-economic s from
demand management to supply side policies (Marginson & Sissons, 2004, p. 5).
Falling membership and decreasing coverage of collective bargaining have limited union ability to
influence the employment relationship in the workplace and beyond. In attempts remain relevant in
the workplace unions have turned to new forms of recruitment and organisation such as the
organising model (Kelly, 1998) (Carter & Cooper, 2002) (Hyman, 2002), partnership agreements
(Terry, 2003) (Samuel & Bacon, 2010) and alliances with civil society organisations (Wright, 2011, p.
8)
Unitarist and Pluralist Frames of Reference

Edwards (2005)sees the employment relationship as contested terrain, containing both conflict and
consent between the interests of management and those of employees, with order negotiated
through a web of both formal and informal rules and expectations. Similarly, Thompson and Harley
(2007) suggest the employment relationship always contains actual and potential conflict, while
simultaneously encompassing shared interests. It was in this context that that Fox (1966) placed his
pluralist frame of reference. Incorporating Cyert and Marchs (1963) assessment that organisations
are coalitions of interest groups with differing legitimate aims and values, Fox (1966) outlined a view
in which organisations could be seen as a pluralist society, containing related but separate interests
and objectives, that needed to be kept in balance. Rather than a single corporate unity with a single
focus of authority and allegiance, it was accepted that there were competing sources of leadership
and loyalty. Conflict was seen as an inevitable, perhaps necessary (Mullins, 2010), part of the
relationship. Managements role, at least in part, is to manage the conflict and maintain the
equilibrium (Leopold, 2001). In the opinion of Cave (1994) pluralism represents a balance of power
between the parties in the employment relationship, with sufficient trust to respect each others
legitimate, and occasionally, separate interests, with all parties refraining from pursuing their
separate interests to a point where progress becomes untenable.
By contrast, the unitarist frame of reference is a management orientated perspective, with
management as the single source of authority and the enterprise as the focus of loyalty.
Management direct and control the workforce to achieve the organisational objectives (Armstrong,
2009, p. 885). Unitarism stresses the importance of the organisation as a team unified by the
common goal of success for the enterprise (Millmore, et al., 2007). Everyone contributes to the best
of their ability, accepting their place and function. Managements right to manage, the management
prerogative, is viewed as being rational and legitimate, with any opposition to it is seen as
unnecessary and exceptional (Salamon, 1992). As everyone is working in harmony towards a
common purpose, conflict, if it occurs, must be as a result of either poor communication or trouble
makers stirring up problems (Daniels, 2006, p. 9). Trade unions are deemed either unnecessary as
there is harmony, with no conflict to resolve or alternative opinion to be articulated; or as an
external intrusion competing with management for the loyalty of the employees (Rose, 2004, p. 26).
HRM with its emphasis on organisational commitment and mutuality of interests owes much to the
unitary perspective. The use of complementary forms of communication, such as team briefings,
approaching employees directly, either individually or in groups, rather than through their
representatives and move away from collective bargaining to individualised contracts are key facets
of HRM (Armstrong, 2009). Its adoption by organisations over the past three decades has gone
hand-in-hand with the ascendency of the unitarist perspective. Faced with intensified domestic and
international competition in product markets, organisations have constantly been seeking ways to
improve organisational effectiveness (Newton & Findlay, 1996). According to Guest (1995, pp. 110111) HRM supports the three principal sources of competitive advantage, as identified by Porter
(1980) and Miles & Snow (1984); innovation, quality and cost. Strategies built on product innovation
or quality require commitment to organisation, while strategies based on cost leadership are
believed to be more achievable without trade unions. Following this logic, where high organisational
commitment is sought trade unions are irrelevant; while if the ambition is to seek cost advantage,
trade unions and industrial relations systems carry an additional cost. This seems to have been
borne out by Metcalf (2003) who identified a clear union wage premium in Britain during the 1980s

and 1990s; finding, in general, unionised workplaces were less profitable than non-unionised
workplaces.

Decollectivisation of the Workplace.

Collective bargaining by trade unions, on behalf of their members, is aimed at securing collective
agreements. Substantive agreements, covering terms and conditions of employment such as rates of
pay, hours of work, holiday entitlement etc. and procedural agreements which regulate the
relationship between the employer and the trade unions and additionally detail the procedures
followed in matters of discipline, grievance etc. (Eurofond, 2009).
Flanders (1970) saw collective bargaining as a social process which continuously turns disagreements
into agreement in an orderly manner. However, Armstrong (2009, p. 883) emphasises that collective
bargaining has a political as well as an economic basis. Both sides are interested in the distribution of
power as well as the distribution of income. Collective bargaining can be perceived as an exchange
relationship, through the agency of the trade union, in which the pay work bargain takes place. The
traditional role of the trade union is seen as offsetting the inequalities of power between employer
and employees. In collective bargaining power is shared (Chamberlain & Kuhn, 1965).
Flexibility in working arrangements is a key component of HRM and has been increasingly seen by
management as essential in maintaining competitive advantage. Brown and Edwards (2009)estimate
that between 1980 and 2010 the numbers of part-time workers rose 14% to 27%, and the number of
workplaces employing workers on fixed-term contracts rose from one in five to one in three. This
was accompanied by a rise in the use of zero hours contracts and employees with annualised hours.
Brown and Marsden (2010) assert the employment contract has become more flexible and this
flexibility is under the control of the employer.
The increase in flexible working arrangements is both a symptom and a cause of trade union decline
in the UK (Brown & Marsden, 2010). Driven by increased competition within product markets,
coverage of collective bargaining in the private sector decreased from 47% in 1984 to 16% in 2004
(Brown, et al., 2009). Across the board, regardless of sector, in response to heightened competition,
employers have tightened the control over work and either refuse to deal with trade unions or do so
only on a basis of passive consultation or where they believe unions can make a positive
contribution to improved productivity. (Wright, 2011).
Trade unions have traditionally had a voice effect (Freeman & Medoff, 1984, p. 4) which has allowed
them to identify and articulate the concerns of the employee to the employer in an efficient manner.
This can offer a saving to the employer based on the transactional costs associated with the transfer
of information and the decision making process. Union voice may also offer the potential to improve
productivity by providing a mechanism in which the employer can access the tacit knowledge of the
workforce. However, the union voice effect may only be tolerated by employers as long as its benefit
outweighs the cost of any union wage premium (Bryson & Forth, 2010).
Accordingly, employer sponsored forms of participation and representation have risen sharply over
the last quarter century (Wright, 2011). The proportion of workplaces using non-union voice rose
from 24% to 5%. Overall, however, throughout this period, the number of workplaces with some

form of worker voice has remained stable, suggesting though there may have been a shift in
preference away from union voice, the appetite for participation and representation remains
undiminished (Willman, et al., 2009)
However, the trend away from trade unionism and collective bargaining towards a more
individualised employment relationship may not have any bearing on overall productivity. An
analysis of data from the European Industrial Relations Observatory and the Organisation for
Economic Cooperation and Development (OECD) by the TUC (2010, p. 8) places the UK 7th out of 11
OECD countries with respect to trade union density, below countries such as Luxembourg, Belgium
and Germany and 10th out of 11 with regard to collective bargaining coverage, ahead only of the
United States and yet in 11th place with regards productivity.
Unions may be able to enhance workplace productivity because of their ability to resolve collective
and individual workplace disputes quickly and at local level. Dix et al. (2009) found that while the
number of grievances in workplaces with union voice only was marginally higher than in workplaces
with non-union voice only, the number of employment tribunal claims in workplaces with union
voice only was half that of workplaces with non-union voice. Similarly, Saundry et al (2011) found
that with their autonomy from management and enhanced dispute resolution skills and expertise,
union representatives were able to play a more constructive role in disciplinary procedures than
non-union representatives. Managers in workplaces with recognised unions felt trade union
representatives helped ensure that the operation of disciplinary hearings was more procedurally fair
and efficient that it would otherwise have been.
For employees this unitarist trend and workplace decollectivisation has resulted in the growth of
atypical contracts and a loss of the union sword of justice (Metcalf, et al., 2000), while according to
Marchington and Grugulis (2000) the introduction of best practice HRM with its one size fits all
approach, has the potential to increase work intensification and more insidious forms of control.
Spencer (2000) believes employers must create an environment in which workers actively pursue
the aims of their employer, while their employers extract every last drop of value from their labour
(Newton & Findlay, 1996).
Additionally workers have also experienced a major loss of labour share i.e. the compensation paid
to employees as wages, etc. as a percentage of Gross Domestic Product (GDP). In OECD countries
average labour share decreased from 66.1% in 1990 to 61.7 in 2009, while the wage income share of
the top 1% of wage earners increased by over 20% in the same period (OECD, 2012).
Trade Union Renewal and Revival
The decline in trade union membership has renewed interest of the role workplace activism could
contribute to trade union revival (Kelly, 1998) (Sayce, et al., 2006)The organising model, adapted
from mobilisation theory (Tilly, 1973) (McCarthy & Zald, 1977) by unions in the United States
(Fiorito, et al., 1995) (Russo & Banks, 1998) (Bronfenbrenner, et al., 1998), has been successfully
adopted by British unions (Heery, et al., 2003).The organising approach is not simply a model for
recruiting and organising members, but a broader vision of the purpose of the union and its
structure (Blyton & Turnbull, 1998), based on empowering workers who are able to define and
pursue their own interests through collective organisation.

The partnership was also trialled by trade unions in an attempt to retain influence (Heery, 2002)
Building on stakeholder theory (Freeman, 1984) (Donaldson & Preston, 1993) the partnership model
perceives the parties in the employment relationship working together synergistically (Armstrong,
2009, p. 886). This principle of cooperation between employers and trade unions was behind
government encouragement for partnership agreements in the late 1990s (Wright, 2011).
Cooperation was assumed to produce more efficient working practices, the benefits of which would
be shared with workers through enhanced wages and conditions (Terry, 2003). However, according
to Samuel and Bacon (2010) most of the 248 partnership agreements signed between 1990 and
2007 were hollow in substance. Rather than exchanging employment security for flexible working
practices, the agreements mostly involved a modest trade off of guaranteed union involvement in
return for commitment to work toward the success of the enterprise. The election of key critics of
partnership to positions of leadership in British unions means partnership is unlikely to re-enter
mainstream unionism in the near future (Wright, 2011).

Conclusion
The contested terrain of the employment relationship has undergone considerable change since the
1970s. The change from a pluralist viewpoint to a more unitarist view has been accompanied by the
introduction of HRM, a resurgence of the management prerogative and a more individual approach
to employee relations.
Faced with the loss of membership and influence trade unions has adopted a number of strategies,
including partnership agreements and the organising model to remain relevant in the modern
workplace.

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