Collective Agreements vs Individual Agreements

Topics: Trade union, Employment, Labour relations Pages: 6 (1721 words) Published: April 25, 2013
The current Labor government considers collective agreements rather than individual-level agreements are the most efficient and productive form of workplace arrangements for business. Do you agree? Why ? Why not?

The current Labor government considers collective agreements to be more efficient and productive than individual workplace agreements for business. This political ideology has been impacted by the changing nature of work and employment, where collective agreements and collective bargaining are no longer the most efficient and productive form of workplace arrangements for business. With the extrinsic pressures that come with an increasingly global market, business has to look at ways to increase productivity and profitability in order to stay competitive, and this requires greater levels of flexibility in the workforce. The key components of this argument are direct and indirect employee voice, and which is better for both the employee and employer. Are Trade Unions relevant as their bargaining position has been weakened by both a more global market, changes to more atypical labour types and Government legislation that emphasised individualism over collectivism (Hayter 2010).

Collective agreements are agreements between employers and employees which regulate workplace terms and conditions as a collective. This is generally instigated as a result of collective bargaining by a third party, primarily Trade Unions. Individual agreements, however, are between an employer and an individual employee, and can be instituted outside of any existing collective agreement. Collective agreements, are by nature, a more Pluralist approach to workplace management, whereas Individual agreements are aligned with a more Unitarist approach. Both of these management theories bring in to consideration managerial prerogative and employee voice in the workplace.

Employee voice is the concept of power and involvement in the decision making process by employees in the workplace. This simple premise in an increasingly global market is made more complex if collective voice is the dependant form of employee voice. Firstly, as an organization operates across different countries, it is more difficult to organise action and exercise voice, and secondly, with less dependence on any one labour source, collective bargaining is weakened. (Van Buren, Greenwood 2007). This is a dramatic shift in power back to the employer, and impacts both the union’s power and their bargaining strength at the negotiation table. Alongside the impacts of globalisation, this weakened negotiating power has led to a decline in union membership and requirement for new mechanisms for employee voice. Employee practices have shifted from long term relationships to short term transactions, with greater responsibility on personal responsibility, commitment to a type of work rather than an employer and a greater expectation of job insecurity (Cavanaugh, Noe 1999). This has seen a shift to a more specialized, or knowledge based workforce, with 'employees contributing more effectively to the business using their skills and knowledge' (Budd,Gollan,Wilkinson 2010). From an employee voice perspective, the shift to white collar or knowledge base employment, means they are no longer joining unions, as ‘their employment, level of pay and benefits are determined based on their individual performance and innovative and creative abilities, and not by collectivism’ (Lee 2010). With this rise in individualism, both preferred by employers and supported by Government legislation during the past decade, HRM strategies have developed to accommodate direct voice in the employment relationship. Research by Sonnenberg, Koene and Paauwe shows that organisational HRM strategy improves the perception of employee voice in the employment relationship, with support for middle line managers who are in day to day contact with employees reaffirming the commitment to the company (Sonnenberg, Koene and...
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