When the two sides of an industrial dispute (a trade union or employee representatives and an employer) cannot reach an agreement in negotiations, then they will take some sort of industrial actions.
What are industrial actions?
Industrial actions are measures taken by the workforce or a trade union to put pressure on the employer. In order to agree to the demands of the workforce. Employees will take industrial actions with the intention of making the employer to settle an industrial dispute in their favor. If the objectives of workers are to be met, this will most likely raise the costs for a business organization.
Therefore, employees’ objectives are likely to conflict with those of the employer.
In this situation, employers will use their own methods that can influence an industrial to their advantage. The business is usually represented in the negotiation process by a management team or by employers’ associations. The senior management team and employers’ associations are likely to consist of highly skilled business executives with experience in negotiations.
However, if any side of the industrial dispute is about to take industrial actions, it will have to follow strict laws which govern such behaviors.
Industrial actions taken by employees
Employees and trade union leaders can use a number of measures to encourage employers to accept their demands or try to put them under pressure. Let’s take a look at these methods in details:
1. Negotiations. These are prolonged discussions between employees and employers on payment terms and working conditions. While individual employees are unlikely to be in a strong position to negotiate with business managers, a united workforce will benefit from an increase in its collective bargaining power. Especially, when the employees are represented by a trade union or having accomplished negotiators. They may be able to put pressure on employers during the bargaining process to improve the existing offer. It is because it is not common for employer to put forward the best offer at the beginning. Employers will normally offer pay increases below the level that they are prepared to pay in the end. On another side, employees will most likely ask for large improvements in pay and conditions. But they will be willing to accept lower improvements eventually. Finally, both sides need to be prepared to compromise to reach the final agreement without threats.
2. Going slow. It is a strategic way for employees to put pressure on management during a labor dispute without technically breaking their contract. Employees deliberately work slower to reduce productivity which decreases total output produced. Workers will keep working but they will do that at the minimum allowable pace as specified in their employment contract. They may ‘go slow’ by paying greater attention to every single requirement or taking longer over every task. Reducing productivity will be highly effective when the firm is facing high seasonal demand for more products or the imminent deadline is coming. Yet employers find it difficult to discipline staff. Any overtime work will be avoided as employees aim to minimize the speed of their work.
3. Work to rule. When workers engage in work-to-rule, they stick rigidly to their employment contracts by doing only what they are contracted to do and at the same time refusing any extra effort or overtime. They follow every rule and procedure to the letter, even if it slows things down. This means no working through lunch, no finishing tasks beyond their shift, and no ‘going the extra mile’. They arrive at work exactly on time and leave immediately their shift is complete. While less disruptive than a strike, work-to-rule can significantly reduce productivity, delay production and decrease total production output by highlighting the inefficiency of relying on informal work practices. Any additional work is not done at allow because employees refuse to undertake any activity not directly specified in their contract of employment. It is because workers do the absolute minimum required according to the rules set by the employer. Employers will find it more difficult to discipline staff who work to rule as they are technically not breaking any regulations.
4. Overtime bans. An overtime ban means that workers refuse to do overtime – work extra hours beyond their contracted number of hours. This can be a powerful tool for trade unions as overtime is not usually part of a worker’s employment contract. In industries like communications, where overtime often keeps things running smoothly, such a ban can cause significant disruptions. For instance, lost productivity, missed deadlines and frustrated customers. Without employees frequently working overtime maintaining acceptable levels of service may not be possible. While not as disruptive as a full strike, overtime bans can squeeze companies during peak seasons, forcing them to negotiate. This might be especially useful during busy times of the year seasons and when businesses have impending deadlines leading to much lost output for the employer. Like slowdowns, they leverage busy periods to amplify the impact of worker demands.
5. Strike actions. A strike is one of the most extreme forms of industrial actions when collective of workers totally withdraws their labor and refuse to work asking for their demands to be met. Strike actions usually lead to the business shutting down for a period of time which can obviously be very disruptive to a business and governments. Actually, a strike action is the result of major industrial unrest in response to the breakdown of collective bargaining. Or, to an action by management that is seen as highly provocative or threatening to the employees’ rights. It is hoped the strike action forces an agreement to be reached between employees and the management. When it comes to classifying strikes, they can be either official or unofficial:
a. Official strike. If sanctioned by the trade union after consultation with the workforce. It has the backing of the majority of members of a trade union.
b. Unofficial strike. When a group of employees decides to withdraw their labor without official sanction.
The strike actions may also be full-time, for a fixed period of time or rolling or until the dispute with the employers is fully resolved. While strike actions can be often seen in media, in fact, they are rare because both sides have a lot to lose. Employers will lose sales, customers and sales revenue and employees will lose their salaries with strike leaders finding out that their jobs are at risk.
6. Sit-ins. This industrial action means that the workers may occupy their own place of work or other relevant location, such as a government building or public space, and refuse to leave until their demands are met. Sit-ins will cause production stopping completely which will lead to prevent any product being produced or customers served. Sit-ins can be effective in drawing attention to a cause and putting pressure on decision-makers. They can also be disruptive and costly for employers or governments.
7. Walk-outs. A more severe variation of strike action is a walk-out. This is the ultimate weapon workers have against their employer to withdraw their labor altogether and leave the business. That is why it is only called as a last resort in any industrial dispute. A walk-out will usually only happen, if everything else has failed, and is seen as the very last resort by any employee or a trade union. In this industrial action, employees will either independently or collectively leave their place of work as a sign of protest or disapproval of management decisions and actions.
Case Study 1: Cathay Pacific airline avoids damaging strike just Cathay Pacific has avoided a strike by cabin crew after it agreed a deal with the flight attendants’ trade union to withdraw from a new money-saving health insurance scheme that Cathay wanted to introduce for its workers. However, the company refused to say how much that compromise would cost in the short-term.
Industrial actions taken by employers
Employers and employers’ associations can use a number of measures to encourage employees to accept their demands or try to put them under pressure. Let’s take a look at these methods in details:
1. Negotiations. These are long talks and mutual agreements to arrive at a final compromise. Arbitration may be necessary, if direct talks with labor union officials do not result in a settlement. Unlike other dispute resolution techniques, collective bargaining does not need the participation of outside parties in order to create a win-win scenario. Expert negotiators on behalf of the employers frequently deploy deadlines as a strategy which provide the opposition with little time to organize or present its case.
2. Public Relations (PR). The business and its management might be attempting to win over the public to the employer’s side of the argument by using the media such as television, newspapers or radio. The trade union could feel pressured by this to accept a compromise resolution.
3. Threatening redundancies. These threats force unions to consent to a resolution of the conflict, but they may also stoke animosity among the workforce. They might be perceived as bullying damaging the employer’s reputation. Some negotiators intimidate staff members using intimidation threatening layoffs as a means of coercing employees to comply with their requests. But, while workers are safeguarded by employment rules companies may treat them badly or terminate them.
4. Changes of contract. When a staff member’s contract is up for renewal, for instance, the terms and circumstances of their compensation may be altered. This allows for some compensation structure flexibility for the company. If implemented properly, it could be permissible to amend people’s employment contracts. People who reject the revised terms and circumstances of the contract would not be given the chance to continue working for their current employer.
5. Lock-outs. This includes short-term temporary closure of the business to prevent employees from working and being paid. By stopping employees from working, the loss of wages will reduce the willingness of employees to take part in strike action. And those workers who are not keen on losing pay for long periods of time may put pressure on their union leaders to agree to a reasonable settlement of the dispute. The lock-outs will eventually put pressure on some people who really want to return to work in order to get paid.
6. Business closure. One way that business managers can deal with strike action is to close the business. But this is a rather extreme method. While closure of the entire business where the industrial dispute takes place would solve the dispute, it would lead to redundancy for all of the workers and no profit for the business owners. However, there may be not other option when every other possibility has been exhausted and when unions reject the employer’s final offer. This doomsday ultimatum might be enough to persuade employees to renegotiate, or to settle for a compromise.
Problems and benefits of industrial actions
Problems of industrial actions for employers include lost production, decrease in sales revenue and bad reputation. Additionally, poor industrial relations in the future.
Problems of industrial actions for employees include loss of earnings, plant closure of loss of public support.
However, the benefits of industrial actions might include clearing the air by making clear the position of each side. This can lead to changing management attitudes and goals finally leading to introducing new rules and targets.
In summary, whichever method of industrial action is used, in the short-term, the output of the business will suffer to some extent. It is likely that this lower efficiency will reduces the competitiveness and profits of the organization in the long-term.
