Labor relations practices of selected companies

European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.5, No.20, 2013
82
Labor Relations Practices of Selected Companies
Manolo Logroño Anto, Ph.D
College of Administrative and Financial Sciences, AMA International University - Bahrain
Email: mlanto@amaiu.edu.bh; dr_anto888@yahoo.com.
Abstract
The purpose of this study was to assess the existing labor relations practices of selected companies as basis for
development of labor relations program. This paper tests a hypothesis that there is no significant difference in the
extent of use of labor relations tools when the selected companies were classified as large, medium, and small. In
conclusion, companies recognized that effective implementation of labor relations is a partner to enhance
individual efficiency and to improve organizational productivity. They believed that collective bargaining
promotes harmonious employer-employee relationship. However, they are reluctant in arbitration as a mode of
labor dispute settlement which by its nature dissimilar from a court proceedings. While arbitration has some
disadvantages as cited, it has even more advantages which justify the wholeness of a company’s labor relations
program.
Keywords: employee discipline and privacy, collective bargaining, grievance machinery, arbitration,
occupational health and safety
1. Introduction
Labor relations is the practice of managing organized employment situations. Employees, individually,
may be able to exercise relatively little power in their relationship with employers. If they believe that they are
not being treated fairly, then the labor relations law, guarantees them the legal right to organize and bargain with
the employer collectively. When employees pursue this direction, the labor relations process begins. The process
consists of a logical sequence of four events: (1) workers desire collective representation, (2) union begins its
organizing campaign, (3) collective negotiations lead to a contract, and (4) the contract is administered
(Bohlander and Snell, 2004).
The idea of labor relations is to have a positive relationship between subordinates and supervisors
because this helps the company’s operations run smoothly. It likewise provides a good corporate image because
happy employees will naturally provide better customer relations which will further lead to improved
productivity. This is one critical aspect to the success of the organization; thus HR managers should need to
develop and implement an effective labor relations program.
2. Literature Review
Managers are discovering that the right to discipline and discharge employees – a traditional
responsibility of management - is more difficult to exercise in light of the growing attention to employee rights.
Disciplining employees is a difficult and unpleasant task for most managers and supervisors; many of them
report that taking disciplinary action against an employee is the most stressful duty they perform. Balancing
employee rights and employee discipline may not be easy, but it is a universal requirement and a critical aspect
of good management (Bohlander and Snell, 2004).
The purpose of discipline is to encourage employees to behave sensibly at work. In an organization,
rules and regulations serve about the same purpose that laws do in society; discipline is called for when one of
these rules or regulations is violated. Rules inform employees ahead of time what is and is not acceptable
behavior. Upon hiring, employers tell employees, preferably in writing, what is not permitted. The employee
orientation handbook usually contains the rules and regulations. A fair and just discipline process is based on
three pillars: clear rules and regulations, a system of progressive penalties, and an appeals process (Dessler,
2000).
When a manager must take action against an employee for violating an organizational work rule, the
manager uses the organization’s grievance and disciplinary procedures. When an employee has a complaint
against the organization or its management, the employee normally uses the grievance procedure to resolve the
problem (Byars, 2004). Disciplinary action taken against an employee must be for justifiable reasons, and there
must be effective policies and procedures to govern its use. Such policies and procedures assist those responsible
for taking disciplinary action and help ensure that employees will receive fair and constructive treatment.
Equally important, these guidelines help prevent disciplinary action from being voided or reversed through the
appeal system (Dessler, 2000).
The most common type of appeal procedure is an open-door policy that allows employees to bring
appeals to successively higher levels of management. An open-door policy gives an employee the right to appeal
a disciplinary action taken against him or her to the manager’s superior. Another appeal procedure is for the

Vol.5, No.20, 2013
83
employer to establish an employment arbitration program. Employment arbitration is a dispute resolution
program for employees (Byars, 2004).
In pursuing labor relations, organized companies negotiate a labor agreement. Negotiation is only one
part of the collective bargaining process. Once bargaining begins, an employer is obligated to negotiate in good
faith with the union’s representative over conditions of employment. Good faith requires the employer’s
negotiators to meet with their union counterparts at a reasonable time and place to discuss these conditions. It
requires also that the proposals submitted by each party be realistic. In discussing the other party’s proposals,
each side must offer reasonable counterproposals for those it is unwilling to accept. Finally, both parties must
sign the written document containing the agreement reached through negotiations (Bohlander and Snell, 2004).
Another important aspect to foster good labor relations is the law on safeguarding employee’s physical
and emotional well-being. Managers at all levels are expected to know and enforce safety and health standards
throughout the organization. They must ensure a work environment that protects employees from physical
hazards, unhealthy conditions, and unsafe acts of other personnel. Through effective safety and health programs,
the physical and emotional well-being of employees may be preserved and even enhanced (Bohlander and Snell,
2004).
.
3. Methodology
This is a descriptive study utilizing self-made survey questionnaire in which validity and reliability
measures were established. To test the hypothesis, a survey on fifteen selected companies in the Philippines was
conducted in 2005 in which the subjects were classified as large, medium, and small. The subjects were
determined by employing stratified random sampling method, while the respondents were the HR managers,
supervisors, and rank-and-file who were randomly picked out to represent each category.
Frequency and percentage were used to determine the existing labor relations practices of selected
companies, and mean for the extent of use of labor relations tools. One-way ANOVA was used to compare the
extent of use of labor relations tools when the subjects were classified as large, medium, and small as perceived
by the respondents.
4. The Findings
In the analysis and interpretation of data, Table 1 with its graphical presentation revealed that the extent
of use of labor relations tools was to a very great extent. Companies believed that effective implementation of
labor relations is a partner to enhance individual efficiency and to improve organizational productivity. Majority
of research on why employees unionize comes from the study of blue-collar employees in the private sector.
These studies generally conclude that employees unionize as a result of economic need, because of a general
dissatisfaction with managerial practice, and/or as a way to fulfill social and status needs (Bohlander and Snell,
2004). In the article “Collective Bargaining in 2005” of the European Industrial Relations Review, the article
focuses on the collective bargaining round in France in 2005. The bargaining round was recognized for an
increase in the number of corporate agreements and for the prioritization of pay systems. Although there was an
overall decline in the number of agreements compared with 2004, there were key multi-sector agreements signed
on job reclassification and teleworking.
Respondents however in this study were reluctant in the aspect of arbitration on labor disputes.
Arbitration differs in several ways from a court case. An arbitration, most importantly, is heard and decided by a
private individual who is paid by one or both sides to listen to the evidence and witnesses. The process limits the
amount of information each side can get from the other. Moreso, an arbitrator’s decision is usually cannot be
appealed. If one party thinks the arbitrator's decision is unfair, unlike a court trial, he will not get a second
chance to argue his case before a higher court. While the respondents tilted on the unfavorable side, the
arbitration process has also advantages such as less formal than court trials. This informality can make the
process easier for all parties involved, especially for those who are not used to litigation. And, in most instances,
cases in arbitration are heard and decided much more quickly than court cases.

Vol.5, No.20, 2013
84
Table 1. Extent of Use of Labor Relations Tools as Perceived by HR Managers, Supervisors, and Rank-
and-File
LABOR RELATIONS
TOOLS
HR
Managers
Supervisors Rank-and-File Mean of
the Means
Interpretation
Mean Sd Mean Sd Mean Sd
Employee discipline &
privacy
4.67 0.58 4.45 0.51 3.65 0.85 4.26 Very great
extent
Collective bargaining 5.00 0.00 5.00 0.00 4.60 0.75 4.87 Very great
extent
Grievance machinery 4.67 0.58 4.82 0.66 4.40 0.88 4.63 Very great
extent
Arbitration 3.33 2.08 2.73 1.96 1.80 1.24 2.62 Moderate
extent
Occupational health &
safety
4.00 1.00 3.77 1.07 3.65 0.93 3.81 Great extent
Over-all Extent 4.33 0.84 4.15 0.84 3.62 0.93 4.03 Very great
extent
Table 2. Differences in the Extent of Use of Labor Relations Tools of Selected Companies
Sources of
Variation
Sum of
squares
Degrees
of
Freedom
Mean
Squares
F - Value Interpretation
Computed Computed
Between groups 2.30 2 1.15
0.70 2.40 Not significantWithin groups 39.33 24 1.64
Total 41.63 26
There were no significant differences observed in the extent of use of labor relations tools among the
selected companies as indicated by the F-ratio of 0.70 in Table 2. This implies that the extent of use of labor
relations tools is almost the same in all of the selected companies regardless of their classification.

Vol.5, No.20, 2013
85
Table 3. Differences in the Perceptions of HR Managers, Supervisors, and Rank-and-File in the Extent of
Use of Labor Relations Tools of Selected Companies
Sources of
Variation
Sum of
squares
Degrees
of
Freedom
Mean
Squares
F – Value Interpretation
Computed Tabular
Between groups 3.02 2 1.51
0.11 2.23 Not significantWithin groups 593.28 42 14.13
Total 596.30 44
Table 3 shows that there is no significant difference in the extent of use of labor relations tools among
selected companies as perceived by the HR managers, supervisors, and rank-and-file as indicated by the F-ratio
of 0.11. This finding can be interpreted to mean that the three groups of respondents have almost the same
perception in the use of labor relations tools.
5. Summary and Conclusions
Companies recognized that effective implementation of labor relations is a partner to enhance individual
efficiency and to improve organizational productivity. They believed that collective bargaining promotes
harmonious employer-employee relationship. However, they are reluctant in arbitration as a mode of labor
dispute settlement which by its nature dissimilar from a court proceedings. While arbitration has some
disadvantages, it has even more advantages which justify the wholeness of a company’s labor relations program.
References
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Bohlander and Snell 2004, Managing Human Resources, South-Western, International Student Edition.
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Carnevale, A. P. 2000, Workplace Basics Training Manual, San Francisco: Jossey-Bass.
Dessler, Gary 2000, Human Resource Management. Prentice Hall International.
Dessler, Gary 1997, Organization and Management Critical Success Factors, Allyn and Bacon Inc.
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Horsewood Inc.
European Industrial Relations Review (October 2006). Collective Bargaining in 2005. Issue 393, pp.23-27.
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Metro Manila, Philippines.
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Manolo L. Anto, Ph.D, Dean, College of Administrative and Financial Sciences, AMA International University
– Bahrain; HR Manager of various companies; Member, Personnel Management Association of the Philippines
(PMAP-Negros Chapter) and Association of Labor-Management Councils; Chairman, Annual Search for Model
Employee/Employer and Best HRM Program. Email: mlanto@amaiu.edu.bh; dr_anto888@yahoo.com.

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