Lecture 1 Introduction and theories of employment relations

1. Lecture 1Introduction and theories of employment relations BUSM1080 Employment Relations Semester 1, 2016

2. This lecture • Administration and assessment • Introduction – what is ER? • Four approaches or perspectives in ER: unitary, pluralist and radical and liberal RMIT University

3. Staffing Dr. Simon Fry Course coordinator, lectures, some tutorials RMIT Building 80, Level 8 Phone 99251481 email: simon.fry@rmit.edu.au Mr Joseph Argiro. Tutor email: joseph.argiro@rmit.edu.au RMIT University 3

4. Topics 1. Introduction and theories of employment relations 2. The changing context of employment relations 3. The state 4. Employment relations in Asia5. Management 6. Trade unions and non-union representation7. State regulation: minimum standards and awards8. State regulation: EEO, unfair dismissal and OHS9. Individual contracts and collective bargaining10. Industrial conflict11. Employment relations and performance12. Revision Note: the tutorials for each topic follow the lecture on that topic

5. Requirements to pass; text and materials Two items of assessment: Essay 50%; 2 hour end of semester exam 50% covering whole course. Must submit both and get 50% overall to pass Prescribed text: Bray, M, Waring, P, Cooper, R & Macneil, J 2014, Employment Relations: Theory and Practice, 3rd ed, McGraw-Hill, North Ryde. Recommended purchase. Previous editions of this book not suitable. You will be expected to download readings and other resources from the RMIT Library, the course Blackboard site via myRMIT, and other external websites. Learning Guide key document RMIT University 5

6. Assignment - essay Due date 22 April 2000 words Essay question: Compare and contrast an aspect of employment relations in Japan and in one other country in the Asia-Pacific. In this regard, which of these two countries is more pro-labour and which is more pro-management? RMIT University 6

7. Essay • Your answer must be in essay format; ie must be structured around an argument that answers the question. • Will be marked according to the Marking Criteria Sheet which is the last page of the Learning Guide. • The criteria are: understanding of the question and comprehensiveness; written expression; structure; sources; originality; and presentation. • The best way to achieve well on ‘sources’ and ‘originality’ criteria is original research • Lecture 4 is on ER in Asia and in Tutorial 4 we will discuss the essay. RMIT University

8. Submission & presentation of assignment Submit electronically through Blackboard. If no extension: 10% penalty per day. Late essays not accepted after 7 days. I can give an extension of up to 7 days in limited circumstances. More than 7 days - special consideration only You must follow ‘RMIT Business’ referencing style, a version of the Harvard method. Details in College of Business Guidelines for referencing and presentation in written reports and essays: http://mams.rmit.edu.au/s9sx559hurvc.rtf Know what plagiarism is. You must acknowledge sources of all ideas and written material. Failure to do so is a serious problem in academic writing. College of Business Guidelines also sets out other requirements for written work in the College of Business. Use 1.5 line-spacing. Number your pages. RMIT University 8

9. INTRODUCTION: WHAT IS ER?

10. Defining employment relations ER defined by Bray text: ‘the study of the formal and informal rules which regulate the employment relationship and the social processes which create and enforce these rules’ (2014, p. 18) ER similar to ‘industrial relations’, but ER (or workplace relations) now preferred because IR incorrectly seen to be just about the sensational, collectivist conflictual aspects of employment (ie unions, strikes etc) Business groups and conservative politicians have denigrated IR as old fashioned, adversarial Also ‘industrial’ implies secondary manufacturing industry and unionised, blue collar workers RMIT University 10

11. Why does ER matter? Important for workers: How much pay? What conditions? What work rules? How much say do employees get in matters of importance to them? How are the rules determined? Affects organisations and their management strategies, performance: legal compliance, ‘employee voice’, productivity effects, conflict Key area of public policy, affecting social equity and national economic performance Critical for governments’ success RMIT University 11

12. FOUR APPROACHES/ PERSPECTIVES IN ER: UNITARY, PLURALIST, RADICAL & EGOIST/LIBERAL

13. Approaches to ER There are many ways to view and analyse the employment relationship: different perspectives, academic disciplines, theoretical paradigms in ER The text adopts a ‘neo-institutionalist approach’ Other disciplinary perspectives: economic, legal, sociological, psychological etc RMIT University 13

14. Ideological perspectives • We all have an individual ideological perspective • Like a lens: enables us to see certain phenomena, screen others • Influences what we regard as significant, what is a problem, likely solutions etc • Can be derived from family, work experience, wider beliefs, ideologies • Important to be aware of our own perspective, and those of ER actors and writers

15. Ideological perspectives • Bray identifies 4 categories: • unitarist • pluralist • radical/marxist • egoist [liberal] Unitarism and pluralism are managerial approaches or ideologies Radial/Marxist and egoist/liberal are broader political, economic approaches, but also concern ER

16. Alternative approaches to the employment relationship (Bray et al 2014, p. 15) RMIT University

17. Ideological perspectives Examine each approach according to their: 1 Ideological perspective 2. Analytical tools See Table, ‘Ideological perspectives in ER’

18. Marxism/socialism • Video: ‘Political Theory – Marx’. The School of Life (9.26 mins) • https://www.youtube.com/watch?v=fSQgCy_iIcc Problems with capitalism identified by Marx • Modern work is alienating • Modern work is insecure • Workers get paid little while capitalists get rich by exploitation • Capitalism is unstable Economic systems generate ideology: capitalist values Marx wanted communism: no private property, steep income tax, centralised control of economy, free public education, human development RMIT University

19. Liberalism • Liberalism is arguably the ideology of modern, industrialised, Western civilisation (Heywood 2007) • Critical to understanding employment relationship in industrial society • Emerged in 17th Century Europe as a radical ideology of liberation against existing social, economic and political constraints • Early liberalism opposed to: • Hierarchical feudalism where position in life determined by birth. • Legal rights and obligations varying according to class etc • Political tyranny of absolute government • Economies based on regulation • State enforced religion • Society based on tradition RMIT University

20. Liberalism: Key precepts • Individualism: priority of each individual over any group or collective body. See people mainly as individuals, rather than as members of families, villages, classes etc • Liberty: supreme political value. Individuals can choose where to live, work etc. Unlike serfs in feudalism whose family may have been forced to live and work on the same piece of land – now a free man • Justice based on equality: all individuals should enjoy the same status, rights – no inherited legal status. Law should be blind to privileges based on birth, class, gender, race, religion. Rule of law • Equality of opportunity to succeed or fail in life. • Meritocracy: individuals have differing talents, propensity for hard work, risk. Society should be structured to provide incentives for all to maximise the talents they have • Toleration. Freedom from state interference (Fenna 2010; Heywood 2007) RMIT University

21. Liberalism: Key figures • John Locke (1690): individual rights to life, liberty and property • Adam Smith (1773): argued against existing British economic system of ‘mercantilism’ or state licensing and regulation. • Argued that national prosperity could best be achieved through free trade and minimal government intervention • Market is self-regulating through ‘invisible hand’: leave individuals to make free choices, voluntary contractual exchanges, based on their own self-interest. Price mechanisms, incentives, private profits will result in division of labour which will benefit all parties and society as a whole. Video: ‘The invisible hand’, Sixty second adventures in economics https://www.youtube.com/watch?v=ulyVXa-u4wE Video: ‘I, pencil: The movie’. https://www.youtube.com/watch?v=IYO3tOqDISE RMIT University

22. Liberalism and ER • For liberals, these principles also apply in the context of employment: belief in freedom of contract, right to hire, fire, gain employment or resign in a free labour market; wages set in the market based on supply and demand, willingness to work, talents. Unions, collective bargaining not permitted unless employer agrees. No state regulation except to enforce voluntary contracts RMIT University

23. Liberalism and the industrial revolution • Industrial Revolution occurred round the same time as these developments of liberal ideology (mid-1770s- ). • European, US society transformed: giant factories, mechanisation, steam engines, new industrial cities to house emergent working class. • Horrific working conditions in the new factories = dark satanic mills, dangerous work, long hours, low pay, child labour • Squalid slums, lacking sanitation. Working class poverty, disease, suffering. Lack of education and prospects. (Fenna 2010; Heywood 2007) RMIT University

24. Industrial Revolution fractures liberals into two groups • At this point, liberalism split into two schools (this is also where Marx came into the picture) • Classical liberals continue to adhere to laissez faire – absolute commitment to small government, free trade; opposition to state regulation of factories, higher taxes, trade unions, collective bargaining. ‘Don’t destroy individual initiative with the dead hand of government’. Negative freedom from state intervention. • Social liberals: maintain commitment to key liberal principles of liberty, equality etc, but recognise that some government action is required to remedy the reality of industrial life. State must intervene to reduce inequalities and social injustice: public education welfare, taxes on the wealthy. Regulate terms of employment, safety, permit trade unions and collective bargaining. State action to ensure positive freedom for all. (Fenna 2010; Heywood 2007) RMIT University

25. Social liberalism preeminent by late 19th century • Social liberalism dominant by late C19. With socialists, this lead to regulatory state, health and safety laws, minimum wage and conditions, pro-union regulation, welfare state, Keynesian economics, mixed market economy etc • This is largely so in Australia. • Liberalism the ‘dominant force in colonial politics’ in Australia since the 1850s. (Macintyre 1989, p. 185). • Employer assertion of freedom of contract leading to the Great Strikes of the 1890s based on classical liberal ideas. • The ultimate government solution to class conflict in Australia in late C19, the introduction of compulsory arbitration, was initiative of social liberals (Macintyre 1989, p. 185). • Australian settlement, Deakinism = social liberalism • As in other English-speaking democracies, the social liberal regime in Australia persisted for most of the rest of the 20th century. RMIT University

26. Classical liberalism’s resurgence • Classical liberal resurgence (called ‘neoliberalism’) since 1980s: Hayek, Friedman, Thatcher: deregulation, privatisation WorkChoicesetcetc • The radical/Marxist response to the classical liberal resurgence: ‘Neo-liberalism: The ideology behind contemporary globalization’, John Pilger (7.10 minutes) • https://www.youtube.com/watch?v=HfgwryiEygM RMIT University

27. References • Cullinane, N & Dundon, T 2014, ‘Unitarism and employer resistance to trade unions’, International Journal of Human Resource Management, vol. 25, no. 18, pp. 2573-90 • Fenna, A 2010, ‘Understanding ideologies’, in Woodward D, Parkin A and Summers J (eds) Government, politics, power and policy in Australia, Pearson, Frenchs Forest, pp. 25-47. • Heywood, A 2007, Political ideologies, 4th edn, Palgrave Macmillan, Houndsmills, Basingstoke. • Locke, J 1690/1924, Two treatises of government, Dent, London. • Macintyre, S 1989, ‘Neither capital nor labour: the politics of the establishment of arbitration’, in Macintyre S & Mitchell R (eds) Foundations of Arbitration, OUP, Australia, pp. 178-201. • Smith, A 1776/1937 An inquiry into the nature and causes of the wealth of nations, Modern Library, New York. RMIT University