Industrial Relations: Enterprise Bargaining In Sear Corporation Essay

Question:

Discuss about the Industrial Relations for Enterprise Bargaining in Sear Corporation.

Answer:

Introduction

Conflicts and disputes are common things in every industrial organization; these conflicts and misunderstandings tend to arise among the employees and between the employees and the employers. According to Borland (2012), the frequency of these conflicts hinders the performance and productivity of the employees and the organization as a whole, therefore, each organization should always have a strategic plan for solving such disputes whenever arise. The individual level conflicts are always easy to handle however, those disputes that occur between a group of employees and the employers are always the most difficult to solve (McDonald & Graham 2011, p. 51). These conflicts have led to formation of unions among the staffs across the world to spearhead their interest on various aspects such as the working conditions, employee relations, payments, and welfare of the staffs. The paper examines the dispute between Sear Corporation and the organization’s workers union over poor payments and terrible working conditions established by the management. The article also discusses various strategies adopted by the administration towards settling the dispute and the views of both the trade union and the management of the strategy. The paper further provides recommendations that can be used to improve on the methodology adopted.

Workers unions are unity of workers formed to handle the grievances between the workers and the employers (Hassan & Seraji 2013, p.92). These unions ensures that both employees and employers respect the terms and conditions signed, privileges and freedoms, and addresses misunderstandings through various strategies such as strikes, go-slow, legal changes, collective bargaining, and public address among others. The industrial disputes have several methods of addressing, such as conciliation and arbitration, negotiation, mediation and among others.

Australia Enterprise Bargaining

Enterprise bargaining agreement refers to an understanding either between organization’s management, national system or the employer and the employees. The Australian enterprise agreement formed after the push by the Australian union and the Australian Labor Party to help press on the workers’ rights in the 1890s (Faia & Rossi 2013, p.410). Both Howard’s government and employers who all reasoned and felt that each employee was a single entity initially thus the interests could not be generalized, objected the development of workers union (Carabetta 2014, p.280). The government further objected the formations of those unions on the basis that most of the unions were inclined to conciliation and arbitration.

These resulted in more employers’ attack on employees over work period, working conditions and payment that saw frequent strikes and lock-outs in Australia’s organizations. However, during the reign of Rudd Labor government, weakness of The Work Choices Act was pointed out and the act replaced by the Fair Work Act (2009) therefore, unions were formed resulting into fewer strikes and workplaces conditions improvement (Pagura 2011, p.161). The enterprise bargaining method in Australia formed to protect the workers’ rights, under the Industrial Relations Commission. The IRC states that workers have the freedom to bargain in good faith provided that workers are a negotiation to arrive at least amount of entitlements.

The enterprise bargaining dictates that all issues pertaining the terms of recruitment are settled at the enterprise level and are not majorly affected by the labor-management policy formulation (Wilson et al. 2013, p.639). The Australia enterprise bargaining entails wages guidelines, minimum wages, and procedure of recruitment and termination, and salary increment. As much as the enterprise bargaining foster to improve the life of workers and productivity, it does not guarantee maximum benefits as all parties always compromise on the presented terms and conditions(Cake 2016,p238). Enterprise bargaining method follows a systematic procedure starting with the joint presentation of the demands and grievances to the employer, debate, and negotiations by giving and takes approach to solve the complaints, signing of the agreed conditions and then implementation.

Industrial Disputes in Sear Holding Corporations

Sear Holding Corporations is a departmental store that operates in all the 50 states of America, with employees about 178,000. The corporation recorded a net loss of about $ 1.1 billion in 2013 as a result of boycotts and low employees morale that affected the customer experience that had reduced services from the few employees that were not members of the union. The worker's morale got lowered by some factors such as the proposed working hours like working less than eight hours a day and sending them home when it deems fit on a daily basis. The company also forced workers to lay off the seniority during the layoffs, thereby keeping juniors over the seniors and all workers are required to sell specified minimum products in Australia, or else the service get terminated. These numerous changes led to the strike of the Sear’s Workers Union in protest of the strict and unfavorable working terms and conditions placed by the company (Milner 2012, p.13). The union went ahead and asked consumers to boycott all the products that contained the Sear’s brand such as Die hard and Kenmore, that translated into the net loss record by the company.

Strategies used by Sear Company to address the Industrial Disputes

Coercion-After the failure of the Sear’s management to convince workers to return to work and customers too boycotted the product, the management embarked on coercion method. Coercion is a situation whereby the employer gives a proposal and gives the employee option of either taking or leaving the terms and the conditions. The company came up with coercive terms such as increasing the wages by 10% counter the union’s proposal that was 20%. The company further stated that every employee will have reduced working hours, and is fit to be sent home when the company feels that is unable to accommodate the existing number of staffs. These proposals were presented to the union on the single basis of accepting or being dismissed; however, this never yielded fruits as the Sear’s workers were very adamant and rejected the proposal on the principle of work relations act (Fahori et al 2016,p.2015 p.908). The work relations act that had a loophole of “take it or leave it” allowed employers to make legal signing when hiring an employee, who upon reading accepts the terms and condition.

These terms of coerciveness forced some employee that was not members of the union to continue working, with fear of losing their jobs yet and the already existing privileges. The freedom of association and anti-coercion left so many workers in a dilemma, as less protection was provided; this led the union to pursue legal actions in the Federal Court and Commission. The move was not favorable to the company regarding the past Fair Work Act, hence opted for the formation of a committee to address the issue outside the courtroom. Having realized that strike proposed by the union would create some significant loss, Sear’s management prompted a conversation with the customers to highlight them on the company status. The speech and address were meant to make potential customers that the services would continue irrespective of the worker’s union stand. Unfortunately, the method did no bear enough positive efforts in attracting customers to various stores, as many experienced poor services. This forced the company to form a tribunal to look at the union’s grievances.

Conciliations

The formed committee invited the union leaders that presented their grievances. Several meetings were organized in the presence of the representatives of the management and the workers. During the meetings, the committees took a closer look at the list and amount earned by each employ concerning the Fair Work Act that was passed by the parliament. Apart from the minimum wages, the committees looked at the working conditions such as hours and received statements from employees who had been locked for several hours to clear the duties.

Enterprise Bargaining-After the presentation of the union’s grievances, the company came to the give and took conditions with the worker union. Several proportions tabled, and using the Industrial Relations Commission enactment of the right of the employees to bargain, led to a mutual understanding between both parties (Wheelwright 2013,p.298). The bargaining meeting proposed that the minimum wage received by an employee was increased.

Trade Union and Management Views

The increment of the salaries led to the satisfaction of the employees and dissatisfaction of the employers. The employers were dissatisfied since they had to incur extra cost in paying salaries yet the company had recorded a net loss during the strike and could not be recovered. On the other hand, employees were happy as their interests were met (Hipp & Gwan 2015, p.361). Collective bargaining currently considers as the most effective way of solving disputes between employers and employees in Australia since both are capable of mutually fixing the employment rules. Employees satisfaction tends to improve the performance hence improved quality of product and services.

Recommendations

The management should improve the enterprise bargaining strategies such as adopting a mixture of bargaining method. The mix of both the interactive and descriptive ensures that both the interest of the employees and the employers are met without concession of either party. The interactive negotiation is a win-win, whereby all the parties will explore their differences as they focus on the underlying interest and come up with solutions that are beneficial to all of them (Stockli & Tunner 2014,p. 204). The bargaining method emphasizes and allows the trust to grow between the management and the employees, leading a stronger long-term relationship. The interactive discourages the probability of groupthink and enhances parties to respond to the looming conflicts from a similar perspective, hence tackle real cause of the problem.

However, using distributive negotiation is essential to Sear Holdings when a predetermined amount of resources is to be shared between the union and the management ,as much as interactive is more common (Anghelus & Boncu 2011, p.58). Every company needs to maintain the salary cost to a manageable level, and therefore using the interactive bargaining all the times, will not achieve that goal. Distributive negotiation is where a win-lose situation comes, and in a strategy to control the amount of salary paid to a minimum level, then the bargaining method is adopted, but to have the best bargaining strategy, then a mixture of both is recommended.

The second recommendation goes to the Sear Worker’s Union. The leadership should foster ways of increasing the number of membership, and if possible, all the workers should be members. The union can achieve this through creating awareness among the workers to realize the importance of being a member of the union (Beenen & Barbuto 2014, p.158). The existing leaders can adopt strategies such as organizing and attending various shop-mob, which helps in elaborating their agenda and roles hence adding more power during the negotiation time as they can receive support from other unions and can further train their leaders on a better way of addressing their issues with the management (Pupo & noack 2014, p.333). The union will enjoy active bargaining power when the union has a large number of members and when all are in unified voices rather than having some workers that can be arm-twisted to accept the unfavorable terms and conditions by the organization.

Conclusion

Industrial disputes are there to stay since every employ and organization has different agendas, goals, and interest, the difference lies in the method of handling such disputes with the affected parties. Union formation remains the strongest strategy to foster the rights of workers in every organization through various bargaining strategies. The enterprise bargaining method is not only beneficial to the employees but to the employers to as it helps the organization not to incur unnecessary expenses such as court penalty and reducing cost by getting rid of allowances. The sear corporation should embrace enterprise bargaining and drop unfavorable strategies such as coercing to get employees perform their duties in the future, as these struggles result in weird and disadvantageous situations. For the Sear’s bargaining power to be effective, mix strategies such as interactive and distributive bargaining methods need to be used concurrently during the dispute resolutions. The Sear’s workers union must also strive to increase the number of members through creating awareness, organizing, and attending a shop-mob meeting, to have stronger and effective bargaining power during the disputes resolutions.

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