Industrial/labour relations

INDUSTRIAL RELATIONS
Definition
The practice or the study of relationship within
and between workers, working groups and their
organisations and managers, employers and their
organisations.

Definition (cont..)
The European Commission states: Industrial,
labour or employment relations regulate the link
between the company and the employers and
indirectly between society as whole and its
citizen (European Commission, 2002).
.

Definition (cont..)
Industrial relations is the study of bargaining
relationship between employees and employers
(Laffer, 1974)
The continuous relationship between a defined
group of employees and management (John
Ivancevich 2004)
The field of industrial relations looks at the
relationship between management and workers,
particularly groups of workers represented by a
union

 The relationship being referred to here include

the negotiation of a written contract concerning
pay hours of work and others terms and
conditions of employment as well as the
interpretation and administration of this
contract over its period.

What it involves

Employment and employment regulations

Trade unionism
Grievance and grievance handling procedures
Discipline and disciplinary action
The laws governing all above

Industrial relations: the actors

The industrial relations can be seen as a system

which contains three actors.
The trade Unions
The employers associations
The government

Trade unions
Participation of the trade unions in the
industrial relation can take different forms, from
collective bargaining to strikes. Trade Unions
find their legitimate and strength to take part in
these negotiations from their members

The employers organisations

Unlike trade unions which are composed of
individual persons, employer organisations are
composed out of enterprises - FKE

The government
Prime mission - to preserve social peace (the
regulation of general conflict, which can be
disturbed by a strike, etc.
Their wish for prosperous economy, which can
only be achieved by limiting unemployment and
encouraging economic growth.
Direct interest in industrial relations as an
employer.

Intervention possibilities by the govt.

Categories:
To creation of general binding rules (example;
unemployment benefits)
Creating the rules of the game in industrial
relations matters
The provision f collective goods next to the other
parties (actors)

Intervention possibilities by the govt. (

cont..)
The government can intervene in a direct
manner as the employer of the civil servants and
employees in subsided sub sectors

Industrial relations charter

Is a tripartite pact among government,
employers and a trade-union umbrella
organisation, which is voluntary.
It provides a framework for Kenyan industrial
relations.
It is an agreement among the government,
employers and workers through umbrella bodies
for the management of labour and industrial
relations in Kenya.

Industrial relations charter ( cont)

spelt out the agreed responsibilities of
management and unions and their respective
obligations in the field of industrial relations
Defines a model recognition agreement as a
guide to parties involved
It set up a joint Dispute Commission.

Industrial relations charter (

cont)
The charter was first signed prior to
independence in 1962.
Based on the need for consultations and cooperation among these parties for efficiency and
improvement of workers terms and conditions
of service are its pillars.

Industrial relations charter (

cont)
The employer and the employee need to be in
good terms and operate within their prescribed
obligations for a smooth flow of work.
The government, through the Ministry of
Labour, is meant to be the arbitrator should a
dispute arise between the worker and employer.
It is for these reasons that the three actors are
referred to as social partners.
Occasionally, conflict arises because of the
partners divergent interests.

Legislation pertaining to labour and

labour relations in Kenya
Relevant laws and acts include

The Employment Act;

Labour Relations act
Occupation, Safety and Health Act (OSHA)
Labour institutions Act
Work injuries and Benefits Act

Trade Unions _ definition

the predominant historical view is that a trade
union "is a continuous association of wage
earners for the purpose of maintaining or
improving the conditions of their employment."
It is an organisation of employees that use
collective action to advance its members interest
in regard to wages and working conditions

 A trade union is "an organization consisting

predominantly of employees, the principal
activities of which include the negotiation of
rates of pay and conditions of employment for
its members
An association of employees whose principal
purpose is to regulate relations between
employees and employers, including any
employers organisation

Objectives and activities of trade

unions
The immediate objectives and activities of trade
unions vary, but may include:
Provision of benefits to members: Early
trade unions often provided a range of benefits
to insure members against unemployment, ill
health, old age and funeral expenses.

Objectives and activities of trade

unions (cont..)
Collective bargaining: Where trade unions
are able to operate openly and are recognised by
employers, they may negotiate with employers
over wages and working conditions.
Industrial action: Trade unions may organize
strikes or resistance to lockouts in furtherance of
particular goals.

Objectives and activities of trade

unions (cont..)
Political activity: Trade unions may promote
legislation favourable to the interests of their
members or workers as a whole. To this end they
may pursue campaigns, undertake lobbying, or
financially support individual candidates or
parties (such as the Labour Party in Britain) for
public office.

Why do workers join unions?

Dissatisfaction with the work environment,

including working conditions, compensation, and
supervisors (note: Not the work itself)

A desire to have more influence in affecting change

in the work environment ( therefore the greater the
extent to which management has mechanism for
voicing employees concern, the less tendency on
the part of the workers to favour unionization)

Employees beliefs regarding the potential benefit

of a union

Why workers join unions Cont..

Job security
Socialization and group membership
Safe and healthy working conditions
Communicating link with management

Fair compensation

Type of Union
Description / Example
Craft of skills union
To represent skilled workers e.g. Musicians
Union (MU)
Industrial unions
To represent the members of one particular
industry e.g. Fire Brigades Union (FBU)
General unions
Unions which recruit workers from all types of

Types of trade unions

Type of Union

Description
To represent skilled workers e.g. Musicians Union
Craft of skills union
(MU)
Industrial unions
To represent the members of one particular
industry e.g. Fire Brigades Union (FBU)
General unions
Unions which recruit workers from all types of
industries and with any level or range of skills e.g.
Amicus the Manufacturing Science and Finance
Union (MSF)
White-collar unions

Represent office workers e.g. National Union of

Teachers (NUT)

Types of union security models

Models:
1. A closed shop employs only people who are
already union members. The compulsory hiring
hall is the most extreme example of a closed
shopin this case the employer must recruit
directly from the union.
2. A union shop employs non-union workers as
well, but sets a time limit within which new
employees must join a union.

Five types of union security are

possible (cont..)
3. An agency shop:
Employees who do not belong to the
union still must pay union dues on the
assumption that the unions effort benefit
all workers
requires non-union workers to pay a fee to the
union for its services in negotiating their
contract.

Five types of union security are

possible (cont..)
4. An open shop:
It is up to the employees whether or not
they want to join the union those who
do not, do not pay dues
Does not discriminate based on union
membership in employing or keeping workers.
Where a union is active, the open shop allows
workers to be employed who benefit from, but
do not contribute to, a union or the collective
bargaining process.

Five types of union security are

possible (cont..)
5. Maintenance by membership arrangement.
Employees do not have to belong to the union.
However, union members employed by the firm
must maintain membership in the union for the
contract period

Who is excluded from union

representation?
In the Industrial Relations Charter, the parties
agreed that the following will be excluded from
union representation:
Persons who are formulating, administering, -coordinating,
and/or controlling any aspects of the organizations policy:
Executive Chairman
Managing Director,
General Manager (and his deputy) and functional Heads
that is, departmental Heads (and their deputies),
Branch Manager (and his deputy),
Persons in-charge of operation in an area (and their
deputies).

 Persons having authority in their organisations to hire,

transfer, appraise, suspend, promote, reward, discipline
and handle grievances
Persons training for the above positions (including Understudies).
Personal Secretaries to persons under 1 above.

Persons whose functional responsibilities are of a

confidential nature as shall be agreed upon between the
parties.
Any other category of staff who may, in the case of any
particular undertaking, be excluded from union
representation by mutual agreement.

Recognition and Registration of

Unions - who may not be registered
The registrar to refuse registration of an
application if there already exists a registered
trade union whom he or she deems sufficiently
representative of the whole or of a substantial
proportion of the interest in respect of which the
applicants seek registration.

 An application for registration may be refused by

the Registrar if persons seeking registration for
an organization are engaged or work in different
trades or calling and if its constitution does not
contain suitable provision for protection and
promotion of their respective sectional industrial
interests.

Other grounds for refusal

Other restrictions imposed by law are that, an
organization may also be refused registration:

If the objects of its constitution are unlawful

Its principal purpose is not in accord with what is set
out in the Act
If the secretary or treasurer are deemed not
sufficiently literate in English and Swahili language
and are unable to carry out their duties adequately.

Additional grounds for refusal and cancellations

are:
Unlawful application of trade union funds
Improper keeping of funds of the organization
If the trade union is being used for unlawful purpose..

Consequences of cancellation
The consequences of cancellation of registration
of a trade union are that it:
ceases to enjoy any rights and privileges;
does not take part in any trade dispute or
promote, organize or finance any strike or lock out
or provide pay or benefits for its members;
shall be dissolved and its funds disposed of in
accordance with the rules of the union;
no person shall take part in its management or
organization, or act on behalf of the union as an
officer.

Unfair labour practices - employer

It is an unfair labour practice:
To interfere with, restrain, or coercing employees in exercising their legally
sanctions rights of self organisation.
For company representatives to dominate or interfere with either the
formation or the administration of labour unions.
The above two can be through bribing employees, using company spy system,
moving business to avoid unionization, and black listing union sympathizers.

Discriminating employees for their legal union activities

Discharging or discriminating against employees simply because the latter

file unfair practices against the company
Employers refusing to bargain collectively with their employees duly
chosen representatives

Unfair labour practices - unions

Restraining or coercing employees from
exercising their guaranteed bargaining rights
e.g.. Staging an anti union employee will lose his
or her job once the union gain recognition
Cause an employer to discriminate an any way
against an employee in order to encourage or
discourage his or her membership in an union (
except in closed or union shop)

Unfair labour practices - unions

Refuse to bargain in good faith with the employer
about wages, hours and other employment
conditions.
Certain strikes and boycotts are also unfair
practices
Engage in featherbedding (requiring an employer
to pay an employee for services not performed
Charging excessive or discriminatory membership
fees

Unfair labour practices - unions

Inducing, encouraging, threatening or coercing any
individual to engage in strikes, refusal to work, or
boycott where the objective is to:
Force or require an employer or self employed persons
to recognize or join any labour organisations
Force or require an employer to cease using products
or doing business with another person
Force an employer to apply pressure to another
employer to recognize a union which is not in your
industry

The rights of an employee

To belong or not to belong to a union ( except for
union shops)
Employees can present grievances directly to an
employer
Employees authority to make any subtraction of
union dues form his/her pay cheque

The rights of an employee (cont..)

Nominate candidates for union office
Vote in union elections
Attend union meetings
Examine the union accounts and records

Collective bargaining - Definition

It is a process by which the representative of the
organisation meet and attempt to work out a contract
with the employees representatives the union
Occurs when representatives of a labour union meet with
management representatives to:
Determine employees wages and benefits
To create or revise works rules
To resolved disputes or violations of labour contracts

Definition (cont..)
It is the primary process for determining wages,
benefits, and working conditions
Bargaining means the process of cajoling,
debating, discussing, and threatening in order to
bring about a favourable agreement for those
concerned

Variables influencing the collective

bargaining process
The success of collective bargaining process and
the final agreement reached are influenced by:

The management representatives

The union representatives
The state of the economy
Goals of the bargaining parties
The labour laws
Issues being discussed
Public sentiments
Precedents in bargaining

Labour contract
This is the result of collective bargaining
A labour contract is a formal agreement between
a union and management that specifies the
conditions of employment and the unionmanagement relationship over a mutually
agreed period of time (2 3 years)

Labour contract (cont..)

Its specifies what the two parties have agreed
upon regarding issues such as wages, benefits,
and working conditions.
The labour contract and bargaining process is
bound by certain good faith guidelines that
must be upheld by both parties

Collective bargaining - What is good

faith
Both parties communicate and negotiate, that
they match proposals with counterproposal, and
that both make every reasonable effort to arrive
at an agreement.
It does not mean that one party compels another
to agree to a proposal
Nor does it require that either party make any
specific concessions

Good faith guidelines

Meetings for purposes of negotiating the
contract are scheduled and conducted with the
union at reasonable times and places
Realistic proposal are submitted

Reasonable counterproposals are offered

each party signs the agreement once it has been
complemented
Does not mean that either party is required to agreed to a final
proposal or make concessions

When is bargaining not in good faith

Surface bargaining: Going through the motions of
bargaining without any real intention of completing a
formal agreement
Inadequate concessions: Unwillingness to compromise,
even though no one is require to make a concession
Inadequate proposal and demands: The advancement of
the proposal should be a positive factor in determining
the overall good faith

When is bargaining not in good faith

(cont..)
Dilatory tactics: the law requires that the parties
meet and confer at reasonable times and
intervals obviously, refusal to meet with the
union does not satisfy the positive duty imposed
on the employer
Imposing conditions: Attempts to impose
conditions that are so burdensome or
unreasonable as to indicate bad faith

When is bargaining not in good faith

(cont..)
Making unilateral changes in conditions: A
strong indication that the employer is not
bargaining with the required intent of reaching
an agreement
Bypassing the representative: The duty of the
management to bargain in good faith involves ,
at minimum, recognition that the union
representative is the one with whom the
employer must deal with in conducting
negotiations

When is bargaining not in good faith

(cont..)
Committing unfair labour practices during
negotiations: Such practices reflect poorly upon
the good faith of the guilty party
Withholding information: An employer must
supply the union with information, upon
request, to enable it to understand and
intelligently discuss the issues raised during
bargaining

When is bargaining not in good faith

(cont..)
Ignoring bargaining items: Refusal to bargain
on a mandatory item (one must bargain over
these) or insistence on a permissive item (one
may bargain over these)
NB Negotiating in good faith does not mean that
negotiations cannot grind to a halt

Bargaining items
The labour law sets out categories of items that are
subject to bargaining:
These are mandatory, voluntary and illegal items

Mandatory - Recognized by law as items that can be

bargained on e.g.. Rates of pay, hours of employment,
wages, overtime, severance pay, holidays, vacations,
pensions, profit sharing, employee security etc

Voluntary ( or permissible bargaining

items)
Items are neither mandatory nor illegal

The become a part of negotiations only through

the joint agreement of both union and
management
Neither party can compel the other t negotiate
over voluntary item
You cannot hold up a signing of a contract
because the other party refuses to bargain on
voluntary items

 Examples of voluntary bargaining items are:

management rights as to union affairs, pension
benefits of retired employees, scope of
bargaining unit, prices in cafeterias
Illegal bargaining items are forbidden by law.
E.g. closed shops, separation of employees based
on race, discriminatory treatment

Failure to reach an agreement Leads

to an impasse
Bargaining impasse occurs when:
1. Union and management are unable to reach a
settlement on a mandatory bargaining issues
(wages, hours, or other terms and conditions of
employment).
2. When membership refuses to ratify a tentative
agreement. This occurs because:
The union membership may feel that its
leadership did not bargain in good faith

Possible outcomes of a labour impasse

Workers power - Stoppage of work by the union
( strike, picketing, boycotts)
Employers power - Stoppage of work by
management (lockouts), closing the plant
Seeking the help of a neutral third party to reach
agreement

Types of strikes
Economic strikes based on the demand for
higher wages or better benefits than the
employer wants to provide. Results from a
failure to agree on the terms of contract
Jurisdictional strikes exist when two unions
argue over who has the right to represent
workers, and workers differ as to which union
should represent them

 Wildcat strikes unapproved strike that occurs

suddenly because one union subgroup has not
been satisfied by a grievance decision or by some
managerial action. The union leaders do not
sanction this type of strike
Sit down employees strike but remain in the
plan. Such strike are sometimes said to be illegal
because it could be seen as invasion of private
property
Sympathy strikes occurs when one union
strikes in support of the strike of another union

Picketing
Picketing is used by employees on strike to
advertise their dispute with management and to
discourage other from entering or leaving the
premises
It involves placing members at plant entrance
advertise the dispute
This practice is designed to shut the company
down during the strike resulting to losses hence
willingness to negotiate

 Picket is legal as long as its peaceful.

It becomes illegal if it leads to violence can
occur if the employer gets replacements for
striking employees or some employees do not
support the action and try to close the picket
line

Boycotts
This involves refusing to buy or use company's products
or services
As an incentives to employees to honor the boycott,
heavy fines may be levied against union members if they
are caught buying, or using products subjected to
boycott.
The union hopes the general public will join the boycott
to put additional pressure on the employer

Types of boycotts
Generally there are two types of boycotts:
The primary boycott involves refusal of the
union to allow members to patronize (buy or use
products) a business where there is a labour
dispute. These type of boycotts are legal
Secondary boycott refers to the union trying to
induce third parties, such as suppliers or
customers, to refrain from any business dealings
with an employer with whom it has a dispute.
This type is illegal

Employers power
The employer can:

Lockout
Replacement of striking workers
Close the company or the plant
Close certain operations of the company
Transfer operations to another location
Subcontract certain jobs

All these decisions must be made in accordance

with the law and the actions are not interpreted
as attempts to avoid bargaining with the union

Lockouts
Lockouts is an effort to force the union to stop
harassing the employer or to accept the
conditions set by management
Lockouts are also used to prevent union work
slowdowns, damage to property, or violence
related to labour disputes
In practice, lockouts are more of a threat than a
weapon actually used by management

Permanent replacement
Although the labour laws protect the rights of
workers to organise, engage in collective
bargaining, and strike, it does not forbid
companies to hire replacement workers, nor is
there a prohibition against making these
replacements permanent

What the employer should consider

when faced with a strike

Generally the employer should consider the costs

associated with the enduring strike against the cost of
agreeing to the union demands.

There are a number of considerations the employer

must take into account:
1. How the employers union will affect future negotiations with
the union
2. How long the firm and the union can endure the strike
3. Whether business can continue during the strike

Grievance - definition
A grievance is a complaint, whether valid or not,
about an organisation policy, procedure, or
management practice that creates dissatisfaction
or discomfort
It is a formal complaint regarding the event,
action, or practice that violated the contract
The complaint may be by the management or the
union.

Grievance and grievance procedures

Grievance procedure steps/process to be followed
in handling grievances Grievance procedures are
usually followed in unionized companies, but they
are also important channels of communication in
nonunionized organisation.
In unionised companies, the contract contains a
clause covering steps to be followed and how the
grievance will be handled

The number of steps vary from contract to contract

Purpose of Grievance procedures

To determine whether the labour contract has
been violated
Helps clarify what was not clear in the contract
e.g. defining lawful and unlawful conduct,
defining what is just cause or unjust cause
To settle alleged contract violations in a friendly
and orderly manner, before they become a major
issue.

 To prevent future grievances form arising

To improve cooperation between management
and union workers
Help to obtain better climate of labour relations

Benefits of a grievance procedure

Stabilization of daily employee relations;
Democracy in the workplace;
Open discussion of issues, and improved
communication between the employer and
employee;
Allows for interpretation of the Collective
agreement;
Provides the option to submit the problem to a
neutral third party.

step grievance procedure

1. Informal Discussion: discuss this issue with his or
her supervisor. may be resolved at this step via the
supervisor listening to the issue(s) raised by the
employee, investigating the concerns thoroughly and
providing a thoughtful response
If a dispute is not settled at the Informal Discussion,
then a grievance is filed stating clearly the articles
allegedly violated.

Formal Step 1
2. Formal step 1: If a grievance is filed, the
employee, in conjunction with his or her union
representative will complete grievance form
provided by the union, outlining the facts of the
grievance, the article(s) of the collective
agreement allegedly violated, and the remedy
sought and submit this to the supervisor or
designate.

 Upon receipt of the grievance, the supervisor or

designate must arrange to meet with the
employee and the union representative within
prescribed timelines to discuss the problem.
In addition to the supervisor, the employee and
the union representative, an employer
representative will also be in attendance..

3. Formal

step 2: If the grievance is not

settled at step 1, there is a conference
between middle management and union
officials (union committee)

4. Formal step 3: If not settled then the grievance is

referred to senior management and senior union
officials ( for example chairperson, or secretary
general), attempt to solve the grievance.

Sometimes a mediator may be brought in at this

point to help resolved the grievance.
The mediators role is to get the two parties to
communicate and to offer compromise.
The mediators role is not to establish which side is
right or wrong
His or her recommendation can be accepted or
rejected by either party

5. Formal step 5: Both parties (union and

management) turn the grievance over to an
arbitrator who makes a decision .

Why discipline rules and procedures

Discipline rules and procures help to promote
orderly employment relations as well as fairness
and consistence in treatments of individuals
Disciplinary procedures are also legal
requirements in certain circumstances

Why discipline rules and procedures

(cont)

Disciplinary rules tell employees what behavior

is expected from them. If an employee breaks a
specific rule, this is regarded as misconduct
Employers use disciplinary procedures and
action to deal with situations where employees
allegedly break discipline rules
Disciplinary procures may also be used where
employees dont meet their employers
expectation in the way they do their job
(unsatisfactory performance)

Why discipline rules and procedures

(cont)
When dealing with disciplinary cases, employers
need to be aware of both the aware of the law on
unfair dismissal and the statutory minimum
procures contained in the employment act
The law requires employers to act reasonably
when dealing with disciplinary issues

Why discipline rules and procedures

(cont)
What is classified as reasonable behavior will
depend on the circumstances of each case, and is
ultimately a mater of employment tribunal to
decide.
However there are core principles of reasonable
behavior which will help employers deal with
disciplinary issues in a fair and consistent
manner

Dealing with discipline issues in the

work place what to do?
When a potential disciplinary matter arises:
The employer should make necessary investigations to
establish the facts promptly before memories of the
event fade
It is important to keep a written record for later
reference
Having established the facts, the employer should decide
to:
Drop the matter,
Deal with it informally - recommend counselling for the employee
Or arrange for it to be handled formally

What to do??
When an investigatory meeting is held solely to
establish the facts of a case, it should be make
clear to the employee involved that it is not a
disciplinary meeting

What to do - gross misconduct(cont)

In cases of gross misconduct:

relationship have broken down (cannot work together anymore)

there is a risk to an employers property ( theft, fighting etc)
Risk of being held responsibilities to other parties ( corruption, unethical
behaviour to customers etc) ,

consideration should be given to a brief period of suspensions

with full pay whilst investigation is conducted
Such suspension should only be imposed after careful
consideration and should be reviewed to ensure it is not
unnecessarily protracted.
And it should be made clear that suspension is not a
disciplinary action

What to do (cont)
Informal action:
Cases of minor misconduct or unsatisfactory
performance are best dealt with informally
A quiet word is all that is required to improve an
employee's conduct or performance
If informal action does not bring about
improvement, or the misconduct or
unsatisfactory performance is considered to be
too serious, employer should go for formal
actions

Formal action - steps

Inform the employee of the problem

Hold meeting to discuss the problem
Discuss on outcome and action
Verbal warning
First formal action
Second and final written warning
Dismissal or other penalty