Management and Labour relations in different countries:

The main service a union provides for its members is negotiation and representation. There are
other benefits people get from being members of trade unions.

Negotiation
Negotiation is where union representatives discuss with management issues which affect people
working in an organisation. The union finds out the members' views and relays these views to
management. There may be a difference of opinion between management and union members.
'Negotiation' is about finding a solution to these differences. This process is also known as 'collective
bargaining'.

In many workplaces there is a formal agreement between the union and the company which states
that the union has the right to negotiate with the employer. In these organisations, unions are said
to be 'recognised' for 'collective bargaining' purposes.

Pay, working hours, holidays and changes to working practices are the sorts of issues that are
negotiated. People who work in organisations where unions are recognised are better paid and are
less likely to be made redundant than people who work in organisations where unions are not
recognised.

Representation
Trade unions also represent individual members when they have a problem at work. If an employee
feels they are being unfairly treated, he or she can ask the union representative to help sort out the
difficulty with the manager or employer.

If the problem cannot be resolved amicably, the matter may go to an industrial tribunal. Industrial
tribunals make sure that employment laws are properly adhered to by employees and employers.
They are made up of people outside the workplace who listen to the employer's and the employee's
point of view and then make a judgement about the case. People can ask their union to represent
them at industrial tribunals. Most cases that go to industrial tribunals are about pay, unfair
dismissal, redundancy or discrimination at work.

Unions also offer their members legal representation. Normally this is to help people get financial
compensation for work-related injuries or to assist people who have to take their employer to court.

Information and advice

Unions have a wealth of information which is useful to people at work. They can advise on a range
of issues like how much holiday you are entitled to each year, how much pay you will get if you go
on maternity leave, and how you can obtain training at work.

Member services
During the last ten years, trade unions have increased the range of services they offer their
members. These include:

• Education and training - Most unions run training courses for their members on
employment rights, health and safety and other issues. Some unions also help members who
 have left school with little education by offering courses on basic skills and courses leading to
professional qualifications.

• Legal assistance - As well as offering legal advice on employment issues, some unions give
help with personal matters, like housing, wills and debt.

• Financial discounts - People can get discounts on mortgages, insurance and loans from
unions.

• Welfare benefits - One of the earliest functions of trade unions was to look after members
who hit hard times. Some of the older unions offer financial help to their members when
they are sick or unemployed. http://www.bized.co.uk/compfact/tuc/tuc16.htm tuc
company facts

Relationship between management and Labour in an organization means social economic

relationship, which comes from the labour or employees and the management, which is
using that labour. It is an important aspect of socio economic relationship. According to
Marx (1867), labour is one of the parts of capital of an organization. Management (on
behalf of its organization) is the owner of money and its employees are the owner of the
labour power. Both of them meet in the market and deal with each other on basis of equal
rights. Lot of changes has been taken place in the relationship between the management
and its labour from many years. Their relationship tells us that how much emphasis is
given on its employees’ needs and the working environment. Effectiveness of labour
unions in case of any grievances among workers can also be seen by this relationship.
There is various labour relation strategies differ from country to country which depends
upon number of factors, for example the economic and political conditions of the
countries, their legal environment, different culture, strike and lock out activities and its
regional disparities. All of these aspects tell different stories of management and labour
relations in different countries. We will discuss and compare these relationships in five
countries such as Japan, Germany, United States, Australia and China. (Min D.W. and
Ping Q.Z.). We also need to see the importance of labour unions in this context, which is
as follows.
Meaning of labour union
Labour union can be defined as a group of workers who have joined together to achieve
common objectives in the areas of wages, hours and working conditions. (Boone and
Kurtz, 1999. pp. 144). It is an organization of wage earners based on the purpose of
meeting the members’ interest with respect to their wages and working conditions. This
sets the terms and conditions of employment with the employers on behalf of its members
through wholly or partially bargaining. Labour unions evolved firstly in the United States
in the period of 1700 an 1800 for the purpose of safety and security of workers. Due to
unhealthy working conditions and low wages forced workers to look for ways to improve
their situations. The other reason of evolving these unions is industrial revolution. Due to
this industrial revolution, workers got prosperity (more employment) as well as hardships
(bad working conditions). Workers gradually learnt that by banding together. They can
pressure their management to respond to their demands. Unoins continued to increase
throughout the period of 1943 to 1956. It was approximately 50 million in 1950.It is said
that one fourth of the labour was unionized when government actually officially
sanctioned them. In the beginning there was mainly two types of labour union came into
existence, one is local unions and the other is national unions. Then the concept of these
unions got widened and some unions got internationalized.
Structure of international Labour unions:
The internationalized of the unions could be achieved in three ways. The first one is
intergovernmental organizations, second is transitional union affiliations and third is
extension of domestic contracts. There are mainly two important intergovernmental
organizations (ILO and OECD) consist of government, industry and union
representatives, which work to enhance fair labor, standards in health, safety and working
conditions in the organizations. There are mainly four types of union affiliations. The
first is Global affiliate, which cut across regional and industry groups and mostly
concerned with the political parties. Second is Regional. Which is the subdivision of
Global trade affiliation. Third ones are specialized and fourth is industrial which focus on
particular industries.( Hoggets, Luthans and Doh., 2006).
Management and labour relations in Japan:
Labour management relations play a vital role in deciding working conditions of
employees but in Japan labour management relations centered on company based labour
management relations. This narrows the scope of better relationship between employees
and the management. The other thing to consider in this area is, there is a trend of hiring
part time workers than getting regular workers to cut the personnel cost which leads to so
many issues in the working environment such as widening wage gap between regular and
part time employees, difference between their working conditions. Being these maters
current issues, management is trying to solve these problems but is not able to succeed.
Although its government issues many labour commissions yet the situations are out of
control because of so much diversification of employment and declining labour
unionization. (Kuwahara and Yasuo., Japanese Industrial relation series 16)

Labour unionization in Japan:

A declining trend of labour unionization has been seen in Japan for a long period of time.
Its rate was 55% in 1949, around 30% in the period between 1950 to 1970.It got further
reduced to 19.6% in year 2003.There was 12.7 million peole in Union membership in
1994 that hit a peak at that time in Japan but after that due to continuous decline in the
number of Union memberships which was 10.53 million in 2003. (Basic Survey on
Labour unions, MHLW). There are mainly two factors of downward trend in the labour
unions according to Tachibanaki 1993 and Tsuru 2003. First one is the long-term changes
in the industrial and employment structure and the second one is factors within the unions
themselves. But according to Freeman and Rebick labour unions are declining due to
falling out the percentage of labour unions that organize new work places. This is also

called the decline in the “birth rate” of labour unions. (Yamashita M., School of Business
Administration)
Management and labour relations in China:
There has been a trend of institutional basis of labour relations for many years in the
Chinese economy. Market reforms are unchanged but due to some institutional changes
there is a hope for more liberal future of labour relations in coming years. The peoples’
republic of China (PRC) government has passed many laws related to labour relations for
promoting economic development, social progress as well as to maintain labour
institutions in the socialist market economy. China’s management labour relations are in
fact a labour administration system. There is a lot of intervention of state in the
management and labour relations and government participates on the neutral basis. (Min
D.W. and Ping Q.Z.)
Labour unions in China:
There is a trade union law to understand the labour relations in China, which was revised
in 2001. ACFTU (All China Federation of Trade Union) is the only official trade union
national center in China. It is guaranteed by law. These trade unions act as the
subordinates of the government and the labour party that acts on three levels. First one is
the union must abide by its labour party principles, it should also be subordinate of its
organization and thirdly it must act as carrying out the wishes of its party in case of any
labour management disputes. There has been an increasing number of NGOs working for
the labour force’s rights. These organizations trying to bottom up the labour activities to
counteract the influence of state and market among Chinese work force. (Wang K. 2008)

Graph by Fons Tuinstra

Management and labour relations in Germany:

In Germany, the rights of labour force are considered more carefully by management that
tells a healthy relationship between in labour and enterprises. Individual workers are free
to negotiate with management individually or collectively for the issues such as wages
and other benefits. The labour relations are fully legally structured that makes the high
levels of cooperation between both of them.
Labour unions in Germany:
Labour unions are very strong in Germany, generally, one union in every organization.
The union memberships are on voluntary basis. In the period of labour agreements in
effect, locks outs and strikes are discouraged. Strikes can take place at the finishing of
contracts and when new contract is to be made. There is a trend of industry wide unions.
There is a strong industrial democracy. There are supervisory boards as well as German
law to ensure codetermination in workplaces. (Schuster C.P. and Copeland, 2006)

Membership of DGB affiliated Unions (Germany) 2004-2005

Trade union Total members Change 2004-2005 Change 2003-2004
(%) (%)
German 2,376,225 -2.0 -4.0
Metalworkers’
Union
United Services 2,359,392 -4.3 -5.7
Union
Mining, Chemicals 748,849 -2.8 -3.8
and Energy
Industrial Union
Union for Building, 391,546 -7.8 -7.9
Forestry,
Agriculture and the
Environment
TRANSNET 259,955 -3.8 -4.6
German Union of 251,586 -1.2 -2.4
Education
Institute of Economic and Social Research (WSI) (2006).

Management and labour relations in Australia:

The relationship between the management and labour in Australia is in good position
than other countries. There are more statutory protections available to its employees, but
due to the complexities of its laws and regulations, it is quite cumbersome to apply these
in real life. Government is now more aware about the rights of workers health and safety
conditions in the working environment. There are new amendments to current regulatory
framework related to employment relations.
Labour unions in Australia:
The ACTU (Australian council of trade union) is the peak national body that represents
all workers in Australia. There is about 46 million affiliated councils that represents 1.8
million employees in all over Australia. This union is the most important aspect of
Australian labour movement. It has retained a close relationship with the Australian
labour party. According to Australian Bureau of statistics, the union membership has
dropped to 28% of total workforce as compared to 1992, where it was 40%. There are
various reasons behind this decline. The first one is now people do not have confidence in
Unions by a survey done by McNair Anderson Polling agency. It showed that only 6% of
people have confidence in unions and there are more than 45% people who do not believe
in the unions.(Williams D. 2008)
Management and Labour relations in United States:
In United States, collective bargaining approach is the most popular between
management and labour unions. It is a collective agreement between employer and
employees on the matters such as wages, hours of work, working conditions and any
grievances. This is also called Collective Employment agreement. There is a national
Labour Relation Act (1935), which covers all the collective agreements in the private
sector The American Federation of Labour is government body which keeps eye on all
labour relation matters.
Labour Unions in United States:
United States is the first country from where Unions are born due to industrial revolution
and the unhealthy work conditions. In this country collective bargaining approaches are
used in the labour agreements. According to Sholnn Freeman (Washington Post
StaffWriter 2008), Union membership in U.S. rose in 2007 by 311,000.By the report of
labour Department, trade unions represents 12.1% of the country’s workforce of 129
million up slightly from 12% in 2006. This increase was mainly in West California.
Effects of Labour relations on the competitiveness of a country:
In this modern era, there is lot of competition among various industrial organizations as
well as countries in macro level. Some countries have various comparative advantages
over other countries due to one of its different social, political, legal or cultural factors.
There are mainly three features on which Labour relations become the part of
competition between different countries, which we will discuss, one by one.
Labour cost:
Labour cost plays a great role in the labour relations that leads to the competitive
advantage. In America, there is a remarkable gap between the skilled and unskilled
workers while in East Asian countries, labour is quite cheaper whether they are unskilled
or having some skills. The reason for this is primary education is more among Asian
countries than Latin America. Besides this, in industrial counties like United States and
Japan, government has taken various steps for the protection of labour rights, So its
contribution rates are quite high than other countries. Where the Trade unions are more in
number, Labour costs are high, that give less comparative advantage to that country like
Germany and U.S. In China labour cost is much cheaper that give a fair competitive
advantage to its country. (Longman C. and et al., 2000)
Flexibility:
As far as flexibility in labour is concerned, it varies country-to-country depending upon
their different cultural, political and legal environment. In most of the industrial countries
like Japan, United States, part time and shift works are more popular than the Asian
countries like China and India. There gives a lot of comparative advantage to the former
counties as for the part time and shifts works, wages are low as compared to the regular
workers. The government also regulates this flexibility in the labour hours and legal
agreements are also involved in these types of contracts. This type of flexibility is
available in specialized as well as unskilled work too. It creates more productivity that
leads to more competitive advantage. (Hodgetts R.M. et al., 2006)
Human Resource practices:
Human resource management is a highly significant factor in today’s business world as it
relates to human capital. It has a power of combining intellect with action. In United sates
and other industrial countries, it is regarded as a pertinent feature of management. Due to
its dominant social and cultural environment, people are more concerned with the rights
of workforce. Even in the political matters it takes a significant attention of government
on the labour relations. They are aware of the fact that human resource can integrate
knowledge with competitive insights. Due to competitive corporate culture, the big
organizations are trying hard to ensure high performance, building their labour relations
better with leveraging human resource practices. (Schuster C.P. and Copeland, 2006)
Conclusion:
In nutshell, I would like to say, a healthy relationship between labour and management
could give a very good competitive advantage to an industry or a country. Trade unions
plays significant role in the upgradatiion of labour power, but these unions have to be
very fair in dealing with the management for its rights. Government should take more
steps to simplify all the laws and regulations regarding labour relations, so that workforce
can take legal actions individually against any unfair behavior of management. For fast
and sustained production growth, wages should be increase with the productivity and
efficiency levels among workforce. There should be promotion of a venue for the social
dialogue between the companies and the labour. With the rationalizing of mandatory
benefits and provisions, government of a country can make a difference in its country
growing internationally. Human capital is a crucial power of an industry despite
advancement in technology. Every country whether it is Japan, China, Australia, U.S. the
management has to understand the potential of its labour force to achieve its goals on
macro levels.

References

• Schuster C.P. and Copeland. (2006). Global Business Practices. (1st edition).
Thompson
• Hodgetts, R.M., Luthans F. & Doh, J.P. (2006). International Management:
Culture, Strategy and Behavior. (6th edition) McGraw-Hill.
• Longman C. and et al. (2000). Industrial Relations, A Contemporary Analysis,
McGraw-Hill, Roseville.
• Min D.W. and Ping Q.Z. The Enterprise Labor Relationship of China:
Transformation, Tension and Towarding Harmony. School of Economics and
Department of Politics and Law, P.R.China.
• Wang K. (2008). A Changing arena of Industrial Relations in China: What is
happening after 1978? Journal, Employee Relations. Volume 30, Issue 2, pp.190-
216, Emerald group Publishing Ltd.
• Yamashita M. Japanese Labor-Management Relations in an Era of
Diversification of Employment Types: Diversifying workers and the Role of Labor
Unions, pp. 106-117. School of Business Administration, Meiji University.
• Dilorenzo T.J. (1990). Symposium Japanese Labor Relations: Are there Lessons
for the U.S.? Volume 11, No. 3. Springer New York.
• Kuwahara and Yasuo. Industrial Relation system in Japan: A new interpretation:
Japanese Industrial relation series 16.
• Institute of Economic and Social Research (WSI) (2006). Union membership
decline slows down.
• Williams D. (2008). Australia’s Employment and Labour Relations System: An
overview, Minter Ellison.
• Freeman S. (2008). Union membership up slightly by 2007. The Washington Post.
Saturday 26. Page D02.