Union Management Partnerships Essay: Successes And Failures.

Background to Union- Management Partnerships Agreements in the UK

Describe about the "Union Management Partnerships Agreement". 

Partnership Agreements between Trade Unions and the Management of businesses have become an important aspect of business success. This paper looks at the key successes in union-management partnership agreements in the United Kingdom and Singapore, and then uses recommendations from their success and failures to inform a successful partnership agreement between FDAWU (Food and Drinks Allied Workers Union) and the management of a food manufacturing company.

The Trade Union Congresses’ (TUC) principles will inform the report. Also, the report will analyze the characteristics of partnership agreements, its advantages, and disadvantages with case examples from the UK and Singapore (cut costs to save jobs). The report will also look at the implications of such partnerships for the unions/employees and management. Guidelines on a Flexible and Competitive Wage System will make up the recommendations besides other findings. In conclusion, the report will look at Skills Redevelopment Program as part of the partnership agreement.

Union-Management Partnership agreement is a contract between the trade union and the management of the business. The agreement entails the trade union collectively bargaining for the welfare of workers regarding wages, work rules, complaint procedures, benefits, workplace safety, policies, terms of hiring, promotion, and firing, and in turn the management gains by receiving employee flexibility and quality in productivity. In the mid-19th Century, trade unions in the UK were stronger than the Political Labor Movement (Lecher, 1994). In the 1990s, governments in the UK encouraged the voluntary signing of the partnership agreements between workers and managers to promote mutual gain (Goslin & Machin, 1993), this partnership was created to enhance more efficient working practices and improve financial performance where employees would gain through better wages and working conditions. In 2011, there were over six million members in trade unions affiliated with Trade Union Congress (TUC) in the UK. The Food Drinks and Allied Workers Union (FDAWU) were formed in 1964 and was later merged with FBIWU in 2000. This union represents employees in the manufacturing and processing of food and beverages products and catering.

1. Joint Commitment to the success of the business
2. Unions and Employers should recognize each other’s legitimate interests and resolve differences in an atmosphere of trust

iii.    Commitment to employment security

1. Focus on the quality of working life
2. Transparency and Sharing information
3. Mutual gains for unions and employers, delivering concrete improvements to business performance, terms and conditions and employee involvement

Legal & general and MSF (currently Unite)

Legal & General is one of UK’s largest financial companies. It employs around 6000 people in the UK. Between 1995 and 1998, individual new businesses and funds under management increased. Legal & General donates 0.5% of its profits for social responsibility to charity and non-profits organizations. Previously, union-management relations in Legal & General were based on limited forms of engagement. In 1979, Legal & General signed a partnership agreement with Association of Scientific Technical and Managerial Staffs (ASTMS). Their relations have since been good. The company even encouraged employees and managers to be a part of the union to ensure balanced representation of the workforce as a whole. The union played a big role in annual pay bargaining, but union-management interactions were limited to only disciplinary and grievance handling. This form of limited interactions promoted adversity and led to two strikes in 1987. Union officers complained that the union avoided important areas and aspects of its responsibility thereby unable to influence staffing levels and the organization of work implemented by management. This led to a decline in membership. The management complained that the union lacked proper and frequent communication with the employees. In 1996, the company decided a change process and a new partnership agreement. They decided to develop a strategy that enhances communication with employees. They decided to replace the old-style adversarial system with a collaborative management approach, and organizational values were emphasizing trust and mutual respect for the contribution of members to employee relations.

Trade Union Congress’ (TUC) Principles of Partnership

The company did not throw MSF out, but instead got them involved in decision making. In June 1996, the management and union decided to set up a joint party to develop new principles and goals of the new partnership, and to have certain areas as common ground. In April 1997, they concluded the Partnership Agreement and included characteristics of workplace organizations. The partnerships’ agreement included mutual legitimization where differing interests are recognized and respected. It recognized the management’s right and duty to manage and the unions’ right to represent its members. The other was the cooperative process where conflicts are to be avoided. Lastly, they agreed on joint decision making and consultation, which accords both parties full and early participation. They operate under the Joint Employment Policy Forum where both parties meet twice a year with equal representation to discuss matters of business results and strategy, rewards strategy, training and development and employability among other issues.

Both company and union got positive benefits from the partnership. In 1997-1998, the partners jointly came up with a customer focused approach with more diverse opening hours to cater for customer needs, flexible working hours and greater discretion for customers in certain areas. Another focus was on career development. To date, Legal & General funds a company development manager in charge of skills development for the union representatives to ensure greater productivity and knowledge. They also have a Joint Charter of Employee Rights and Responsibilities to enhance performance and accountability. The management promoted a more open and inclusive process with the union. For instance, in 1999, the Union made a presentation on senior management restructuring. Other policies jointly developed were the anti-harassment, whistle-blowing and equal opportunities. The partnership’s success has been propelled overtime by communication to members through a newsletter, workshops, and emails. Challenges reported were that members fail to see the role and outcome of representatives. 

TESCO became the largest food retailer in the UK regarding market share. USDAW got very little representation in TESCO. They had a narrow scope of influence and only got consultations after events and after important decisions had been made. They formed a partnership agreement with nine pillars (Baker, 1990). The pillars addressed issues like processes for employment relations to support rapid change, improved quality of representation, communication with all staff, joint problem solving other than an adversarial way of resolving disputes, improved policy implementation and more concern and respect for different cultures and values. It also includes regular joint problem solving and consultation. They use store forums where any staff may be elected although USDAW has one position reserved for its staff. TESCO takes the decisions on issues affecting the business but gives USDAW a major say in managing the impact of changes.

UK case studies

The agreement was launched with a booklet entitled Working Together Better: A Real Partnership, which had representatives from store managers and representatives from USDAW. The store briefings increased the membership significantly. The consultative procedures were successful for the partnership between USDAW and TESCO.

Improvement of business performance (Commercial Success)

The core reason for businesses to form partnerships with unions is to improve the performance of the business. They form agreements to foster accountability in both the workers and the employer.

Flexible working methods

Partnerships advocate for flexible working methods. For instance, pregnant and lactating women require more time for rest. Lactating women need flexible time to breastfeed their newly born. Employees who need time to attend to urgent needs should have it.

Employment security

Partnerships enhance employment security in the sense that they advocate for fair rules to replace retrenchment with alternative jobs in the company.

Development of rewards system related to company performance/sharing in success

Partnerships have the aspect of employee reward system where the efforts of employees are recognized and rewarded. 

Improvement of communications systems

Partnership agreements focus on improving communication systems between the workers and the management. The representatives of the unions create a link between the workers and the management (Clarke, 2009)

Achievement of single status for all employees through the harmonization of terms and conditions

All employees enjoy similar working conditions irrespective of the position held. Partnerships create agreements that harmonize terms and conditions for employees

Agreements over payments

Payments determine the performance of employees in certain instances. Hence, the union-management partnerships ensure that agreements about payments are created between the employers and the employees. 

To Union/ Employees

Improved rewards and working conditions

The union represents the grievances of the employees thereby pressing the management to provide good working conditions with rewards for those who deserve applauding.

Positive relations with supervisors

Union- Management partnerships enhance positive relations between the management and employees. The representation of employee grievances and needs to management promotes concern and fair treatment by supervisors hence healthy relations (Bennet, 2013).

Enhanced employee consultations and involvement

Partnerships require that employees are involved all matters affecting them and that they have the power to make decisions over such matters. It, therefore, increases their involvement in consultations before decisions are made (Holgate, 2013)

Greater job security

Positive relations between management and employees create concern for their welfare and chances for such benefits as skills development. Chances of retrenchment are also reduced.

Usdaw and tesco

To Employers

Less time spent in grievances/ Improved morale and committed staff

Employees’ become satisfied with their working conditions and services offered at work. They shift their focus from complaining to productivity

Better decision-making

The management involves the employees in, making decisions that affect them. The union also represents the needs of the employees to management and vice versa. This way, an inclusive decision-making process is created.

A higher skilled workforce

Partnerships encourage skills development of the employees. The management, therefore, benefits from a higher skilled workforce with a well skilled and equipped workforce. 

 Disadvantages

Duplicity and partial/ partial commitment by management

Partnerships duplicate the work of management by the union. The management, therefore, may not fully commit itself to its work.

External shocks such as product market turn down/ corporate takeovers

Worker rejection of acquiescence

Possibility of work intensification

Make may become too much for the employees since they are expected to perform. Pressure resulting from achieving highly could intensify the amount of work.

Union- Management partnerships are beneficial but have their limitations too. Some of the limitations are that the union may want to take a good portion of management roles. Management is therefore left with limited roles to play as the union gets involved. The management may also have limited privacy in managing its affairs buy involving the union in managerial matters. 

The tri-partite partnership in Singapore came about after decades of adversarial and confrontational industrial relations. The National Wages Council (NWC) established in 1972 was the first tripartite institution in Singapore which brought together the Government, employers and workers to formulate wage guidelines, achieve orderly wage increases and to prevent wage disputes which could hinder the process of industrialization (Lim, 1999). The agreement was based on trust and understanding among the three partners. Different committees and task forces were formed. Some of them are Committee on the Employment Act, Retirement Extension Age, Retrenched workers, Portable Medical Benefits, Wage Restructuring, Flexible Work Schedule, and Community Engagement at Workplace, etc. The Singapore Tripartism Forum (STF) was launched in 2007. The Economic Strategies Committee also addresses broader issues of social representation in partnerships. The major tripartite actors in Singapore include the Ministry of Manpower, National Trades Union Congress, and the Singapore National Employers Federation. These bodies pursue a partnership and problem-solving approach addressing and finding solutions to employment and industrial relations issues.

Shared Responsibility

The tripartite partners are committed to working together and sharing responsibilities. The Government provides a favorable working and investment environment for businesses; the workers ensure their continuous development by upgrading their skills and learning while the employers create well-paying jobs while adding their value.

Characteristics of Partnerships

Common Understanding

The tripartite agreement enhances common understanding where all the members involved are given the opportunity to air out their concerns. They promote regular dialogue and formal and informal information sharing to engage all members and put their concerns at the center of the partnership.

Mutual Trust and Respect

Over the years, the partners have developed mutual trust and respect that has enabled favorable working conditions. Partners have leaned to trust each other and build confidence among the members. This kind of respect and trust enables open sharing of ideas and building of consensus. 

Mutual Benefits

The tripartite agreement aims at promoting mutual benefits for all the members. The Government formulates and implements industrial and employment policies to achieve social and economic goals for the benefit of both the members and the people in general. Workers enjoy economic gains while the employers get favorable conditions to run their businesses.

Continued Efforts

 The members of the tripartite union believe in continued efforts where every partner improves their quality of output and for the good of everyone. They work hand in hand to bear beneficial fruits and take into consideration the struggles of fellow members.

The main tripartite institutions in Singapore are the National Wage Council, Singapore Workforce Development Agency, Employment and Employability Institute and the Tripartite Alliances for Fair Employment Practices.

Jobs Credit Scheme

Under this scheme, the Government assists employers with their wage bills by giving 12% cash grant on the first $2500 of each local employee’s monthly wage. Employers who have paid the Central Provident Fund contributions are guaranteed of the jobs credit.

Tripartite Guidelines on Managing excess manpower

These guidelines provide other alternatives to employers other than retrenchment. It suggests redeploying workers to alternative areas of work within the company, sending them for training and implementing temporary lay-off or a flexible work schedule (Lee, 2011)

The United Workers of electrical and electronic industries together with Murata Electronics Singapore Limited are examples of companies that underwent crisis recovery action through the tripartite agreements provisions.

Flexible and Competitive Wage System

A flexible and competitive wage system enables companies to make quick decisions on wages.  This kind of wage system ensures that the wage reflects the value of the job. Wage increases here reflect company profitability and individual performance. It ensures that wage increases are not given on permanent basis and that the workers have a stable income. The food processing industry and FDAWU should consider creating a partnership with this kind of wage system. It will help regulate remuneration and wages.

Skills Redevelopment Program

The skills redevelopment program provides opportunities to specific staff and employees to gain from skills training activities in their jobs. Certain employees who have been selected for skills development benefit from training which boosts their skills and knowledge in certain areas. Instead of firing employees since they lack certain skills, the employers should engage them in such skills development programs (Harrison, 2009). FDAWU and the food manufacturing industries should form partnership agreements and include skills redevelopment as one of the elements of employee benefits.

Unions/ Employees

According to members of the tripartite agreement in Singapore, they believe that tri-partism delivers outcomes. Workers can share in the process of economic benefits and development. Great improvements have been made in the lives of the workers, their jobs, wages, and welfare.  The workers believe that tripartite cooperation is an effective way of improving the quality of life for them.

Employers

For employers, the tripartite system is a flexible and effective way of delivering results. The tripartite agreement helped businesses recover from the economic recession with tangible outputs. Employers believe that the tripartite system promotes sustainable and inclusive growth. 

Conclusion

Union- Management Partnership Agreements have proved to have beneficial outcomes for the members involved. In the United Kingdom, the merging of Trade unions with management to run and operate businesses brought more of profits than losses to the companies. In the long run, all the involved parties gained, with the unions and employees enjoying representation in matters affecting them while the management received quality results from the workers with minimum supervision. The tripartite agreement in Singapore between the Government, the workers, and the employers created an environment conducive for business and made it easy for businesses to recover even after tough economic times. The challenges and limitations of partnerships can be handled by mutual problem solving and involving all stakeholders in decision-making (Addison & Scanabel, 2003). Otherwise irrespective of its limitations, partnership agreements are an effective way of enhancing business success.  

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