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Employment Relations Issues: GASCO Limited Report


Introduction

The relationship between an employer and the employee needs to be harmonised so as to ensure productivity in the workplace (Bray and Waring 2011). Certain issues are likely to arise in the course of their interaction hence leading to negative consequences in the organisation (Rose 2008).

Employment relations ensure that employment procedures and policies governing the workplace are regulated to meet both the employers and employees’ expectations. This is achieved through the appropriate operational mechanisms being adopted in the workplace (Lewis, Thornhill and Sauders 2003).

Rapid changes in the workplace such as managerial changes, government policies affecting the organisation or even new information technology adaptations can alter the employee’s expectations and policies (Palmer 1997). Through a case study, this paper will identify and discuss the issues in employment relations within an organisation and propose strategy frameworks to solve the problems.

Case Study

GASCO Limited is a private company in Australia that engages in natural gas extractions. The company has a clientele of 100,000 households who use the company’s gas at an average expenditure of $400 per year in each household. Currently, the employees operate under a collective agreement certified by the Australian Industrial Relations Commissions.

The agreement is a result of negotiation between the management of GASCO, the union and the employees which was entered into in 2009. A provision in the agreement requires the company to pay redundant workers with 8 weeks pay per annual employment. It should be noted that 85% of the workers fall under these category. However, the company seems to be experiencing major financial problems amidst other issues.

This is attributed to the recent move by the government to regulate prices, new managerial changes in the past 6 months and ensuing conflicts between the management and workers leading to several worker’s strikes over the last year.

On the other hand, the company sales seem to be declining with most of their clientele preferring electricity rather than gas. The changes are affecting the daily operations of the company as indicated in the recent balance sheet. The company has recorded a net loss of $1 million characterised by the employment relations issues.

The Employment Relations Issues At GASCO

The case study presents three pressing employment relations. The first issue identified is the industrial relations legislations put in place to govern the relationship between the management and the employees. The terms and conditions policies in the company have been put down in a collective bargaining agreement between the management, the employees and the Australian trade union.

The trade union, which serves as a third party become an issue in the employment relations in the company as it fails to put into consideration the organisation’s main operating policies (Frazer and McCallum 1997). This issue can be managed by introducing individual contracts (Sewerynski 2003). Individual contract is an agreement between the employer and the employee and does not include a third party.

The Australian Workplace Relations Act allows the key players in an organisation to enter into either collective or individual agreements (Australia Limited 2000). Though the Act places more reliance on collective bargaining agreements, individual contracts are also enforceable in law after the expiration of a collective agreement. GASCO may wish to enter into individual contracts because of various reasons.

The financial mishaps being experienced as a result of declined sales in their product and also the government’s move to regulate prices. The management needs to negotiate the varying terms and conditions of the contract as regards pay rates, working hours and managerial relationships to suit the current company’s policies.

The negotiation should be between the management, the employees and the union. The other alternative is to withdraw the collective agreement from covering new individual employees. Further, the company may wish not to renew the collective agreement upon its expiry in 2012 as stipulated by the law.

The other issue is the managerial changes that have occurred in the past few months within the organisation. The step by the management to bring in a new CEO may have had a huge impact on the employees. Change of management can affect the theoretical perspective of the company. This is due to the conflict by the two managements in understanding and analysing the relations in the workplace.

The management can either adopt the unitary or pluralist perspective to run the company. The previous management in GASCO seems to have operated under the pluralist framework. A company under this framework runs under powerful and divergent models, each with their own set of objectives. The two predominant models in this kind of framework are the management and the trade unions.

Trade unions, in such a mechanism, are highly regarded as the legitimate representatives of employees. Collective bargaining is used by the unions to deal with conflicts between the employer and the employees.

It should be noted that in such a key scenario, the management has a very minimal role towards enforcing and controlling policies. Therefore, the introduction of a new CEO with a quest to implement a unitary framework becomes an employment issue. Unitarism emphasizes a harmonious workplace and ensures that both the employers and the employees share a common purpose.

It also adopts a paternalistic approach by demanding the employees’ loyalty to the company’s policies. Such kind of company disregards the role played by the trade unions and is bound by the loyalty between the employees and the management itself. Previously based on a pluralist framework, the CEO is bound to affect the normal operations of GASCO by implementing the new framework.

This will not only trigger the employment relations between the management and the workers, but is itself a pressing issue (Gennard and Judge 2005). The different departments in the organisation are bound to be affected by the changes. The alternative of managing this particular issue is by the new CEO incorporating the interests of the workers in his new policies (Moore 1977).

The last notable issue is the conflict over management decisions and OHS issues. This is evidenced by the management’s ignorance to pressing issues by the employees hence resulted to five strikes in a span of one year. Collective agreements give the union mandate to act on behalf of the workers.

The federal jurisdiction in Australia allows the workers to engage in peaceful strikes to protest over managerial issues (Australian Limited and OHS Industry 2007). However, the same can lead to the operations of the company going to a standstill further leading to decline in sales. The alternative can be achieved through issuing written and documented OHS policies and procedures.

Strategies To Be Adopted By The CEO To Streamline The Employment Relations Issues

The issues act as a hindrance to achieve the set target and goals of the company hence leading to a decline in sales.

One of the strategies is to get the entire organisation involved. This can be achieved through the interconnection of all the departments in the organisation and securing their commitment through effective communication. Communication can be achieved through consultation which is important to foster a warm relationship.

The management should involve the employees and the trade union in the consultation. Participation in all levels of the departments encourages accountability in all aspects (Colling and Terry 2010). The CEO needs to engage all the employees in the change process to lead to healthy working relations. This is achieved through maintaining a balance between the management and the employee empowerment.

This strategy is commonly known as the top-down and bottom-up integration. This ensures a success factor through a meaningful involvement, both at the managerial and employee level. The CEO should also adopt the ‘demand-control’ model designed to reduce the stress of change at the workplace. This results to high performance workplace relations through the improved psychological working environment.

The other strategy is through the introduction of new workplace reforms. One of the elements in the Workplace Relations Act, included in the Workplace agreements, allows the employers to enter into an individual contract with their employees. Recent studies indicate that most employers are resulting to individual contracts rather than trade unions agreements.

This has led to increased levels of productivity and performance in the workplace. This strategy requires the CEO to implement a sophisticated approach in the human resource. The approach ensures that the issues by the employees are taken into consideration by excluding the unions. This will lead to fewer strikes in the future hence ensuring high quality outcomes.

Secondly, the changes need to encompass the quest to reduce unnecessary operational costs in the company. GASCO’s balance sheet indicates that the company has an overhead of $ 20.5 million.

This is due to the company’s expenses such as bonuses to management in addition to their salary, house allowances, associated running costs and other operating expenses. The CEO can reduce some operating expenses such as bonuses to the management, house allowance and superannuation. This will drastically improve the profitability of the company.

The other strategy is applying a risk management approach to handle OHS issues. The risk management is important to identify problems in the organisation, assess the potential risks and control the risk. This strategy is essential to handle the issues likely to come up in the organisation effectively.

It further analyses the potential competition that hinders the company to perform and assesses the strategy to be applied in order to increase the sales (Hunt and Provis 1995). This strategy is also important for measuring progress. The company’s model of monitoring and evaluating the working progress is weak and should therefore adopt good measures to enhance the human capital and improve their performance.

This kind of change lays a platform for both the employer and the workers to adopt certain measures that give them an opportunity to perform better. The performance is therefore measured using an internal data hence decreasing levels of conflicts in the organisation.

Conclusion

Employment relations issues affect the daily operations of a company. Failure to handle them on time can lead to decreased performance. It is therefore necessary for the management to identify the issues within the company and apply appropriate strategies to solve them. This will help the company to manage its financial mishaps and adapt to any changes likely to be effected in the company.

Reference List

Australia Limited (2000) Australian Workplace Relations Act 1996 with regulations and rules: includes excerpts from the Trade Practices Act consolidated to 18 August 2000. North Ryde, CCH Australia Limited.

Australian Limited and OHS Industry (2007) Australian Master OHS and Environment Guide. North Ryde, CCH Australia Limited.

Bray, M and Waring, P (2011) Employment Relations. Sydney, McGraw-Hill Australia.

Colling, T and Terry, M (2010) Industrial Relations: Theory and Practice. New York, Wiley and Sons Publishers.

Frazer, A and McCallum, R (1997) Individual contracts and workplace relations. Sydney, Australian Centre for Industrial Relations Research and Training.

Gennard, J and Judge, G (2005) Employee relations. London, The Broadway Publishers.

Hunt, I and Provis, C (1995) The new industrial relations in Australia. Sydney, The Federation Press.

Lewis, P., Thornhill, A and Sauders, M (2003) Employee Relations: understanding the employment relationship. New Jersey, Financial Times Prentice Hall.

Moore, W (1977) Industrial relations and the social order. New York, Arno Press Inc.

Palmer, G (1997) Employment Relations. Sydney, Macmillan Education Australia.

Rose, E (2008) Employment Relations. New Jersey, Financial Times Prentice Hall.

Sewerynski, M (2003) Collective agreements and individual contracts of employment. Netherlands, Kluwer Law International.

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IvyPanda. "Employment Relations Issues: GASCO Limited." May 10, 2019. https://ivypanda.com/essays/employment-relations-issues-gasco-limited-report/.

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IvyPanda. 2019. "Employment Relations Issues: GASCO Limited." May 10, 2019. https://ivypanda.com/essays/employment-relations-issues-gasco-limited-report/.

References

IvyPanda. (2019) 'Employment Relations Issues: GASCO Limited'. 10 May.

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