Critically evaluate the view that the public sector is the new heartland of a conflictual approach towards industrial relations

1. PREFACE

The focus of this essay is on two most important and intellectual concept which is considers as the important part of world economy from which one is industrial relations  related to the policies and rules made for the whole sector and other is public sector which is PS is more focused towards employee’s hiring, firing, training, development and performance appraisal systems, communication flow, team building  etc. all these activities are conducted on various platforms and various levels in the organization. Both are interdependent on each other but on one aspect this statement seems to be true but on what basis this can be critically evaluate are based on assessment. Scholars are interested in determining the relationship between IR and PS. The initial view on the title show that the industrial sector is dependent on public sector, how much this view is correct, will be critically evaluate in this essay.  

2. INDUSTRIAL RELATIONS

Before getting secured as an academic regulation, after the war, the industrial relations had a very long past history (see Lyddon, 2003, pp: 90-101). The emerging labour problems of the late nineteenth century gave rise to serious negotiation and conciliation works, these works further resulted in new academic positions. The academic positions included Montague Burton Chairs, which was founded in Leeds. In addition to this, Cambridge and Cardiff were also added to the list of earlier academic positions in 1930. The first text books on industrial relations were more focused on the strong trade unions and bargaining institutions. These books covered features of discipline which became popular after the war. J. A. Richardson gave a description of Industrial relations of Great Britain in his study “Industrial Relations in Britain”.  The book included a lot of stuff, like; negotiation procedures between the employers and the trade unions, the industrial welfare, the movements of trade unions, the organizations of Employers, Management of Labour, industrial welfare, and co-operation that takes place in National Economic Council. The texts do not just explain the industrial relations but goes beyond to point out the gains and losses. If we consider the one side, then we see that the later text books went beyond Richardson’s view point while on other hand included the unitary aspect of employer regulation, this comprised of provisions for welfare, partnerships, profit sharing, personnel management, industrial psychology and suggestion schemes. Richardson point of view about industrial relation that was IR can be run independently fade way as PR and IR are two sectors which works together in ideological aspect this is the fact (Richardson, 2010).

3. PUBLIC SECTOR

Since public sector organizations are owned by state, their performance reflects the efficiency level of state itself. This concept is introduced in the recent past and is inviting the attention of many research scholars who are studying the accounting and business practices of public sector organizations. The research related to privatization of these institutions in also in progress (see e.g., Persson and Tabellini (2001), Shleifer and Vishny (1998), Tanzi and Schuknecht (2000), Gwartney et al. (2002)).   People believe that the expenditure incurred on public organizations could be much lesser than what it is today if government institutions were performing better and core activities were shifted to private sector. Unfortunately, public sector organizations are not performing up to the mark. Their performance is measured in terms of outcome of their operations and efficiency is largely the matter of input-output ratio (Rodrik, 2000).

There are certain key performance indicators for public sector organizations. Musgrave define these functions as stabilization, allocation and distribution. There are certain other indicators that are related to promotion of equal opportunity concepts in the market. The economic scholars of all times believe in supremacy of law and its essence for good governance. They also promoted the concept of wealth of nations, assuming that law is free of any defect (Strauch and Von Hagen, 2000).

4. OPERATION OF INDUSTRIAL RELATIONS IN PUBLIC SECTOR

The one main aspect comes in front while critically evaluating the public sector is that private sector is less centralized in comparison to the public sector, this makes the public sector dependent on few authorities. In public sector all the important agreements like; set up of salaries, wages and terms and conditions of employment, are set up at national level while in industrial side it is not. There are highly regulatory national agreements broadly cover the salaries, the job timings, and the grading of jobs, the provisions in the time of sickness or leave and payment for working weeks which are not up to the standard but are in use in different organisation at UK. The National Health Service and National Civil Service have been characterized by these highly regulatory national agreements use in UK. Agreements even include arrangements with regards to travelling and the use of car. Payment was to be made if bicycle was used in fulfilling the official duties. This somehow makes the statement true which means that public sector is less dependent on industrial sector and industrial sector is more dependent on public sector. The local government industries in UK were previously known as Water, Gas and Electricity industries. These industries had room for many local interpretations; moreover there were many areas which were left unregulated, thus leaving a bargaining power with the locals. Efforts have been made by the trade unions to maintain the collective negotiations, but Government continued to decentralize the collective bargaining. Government has abolished the bargaining of the national pay in the National Civil Service and it is also considering taking similar actions in National Health Service. Decentralization of pay bargaining is a by-product of government’s policy which aims to privatize the public enterprises. The trade unions of public sector conduct separate sectored negotiations. A shift from national to local level has already taken place which can be proven by recent study done by Bonesronning (2012) in which he identifies that PS employee are more reluctant and that is why shifting to local side is increasing but how much this can effect on IR can’t be judged out. This further gives positive view on this side that industrial sector is dependent on public side as said above the decentralize policy is promoting the industrial side so if it is not done then it ultimately effect the industrial sector.

One more critical view is that the Government is having a contradiction in its policies. The contradiction is between two of its desires. At one side Government intends to hold down the pays of the workers of public bodies so that it can place a limitation over the excessive expenditure of the public. While on the other hand Government also wants to decentralize the bargaining of the national pay. As a result Government has maintained decentralization, and in parallel to it, Government has also kept a strict control over the increase in pay. In 1933, the increase in the level of payments was limited to 1.5%; in the subsequent years Government has not provided any extra amount to the public authorities which would enable them to increase the wages. Increase in the amount of pay can only be afforded by one way and that is by efficiency measures. In practice the efficiency measures mean facing frequent job losses which not only effect public side but also have worst impact on industrial side. It appears that in the long run the Government would be having a policy, which would at first decentralize bargaining and on the second stance it would limit the funds which were provided to the public authorities. Government can use centralised structure (Econ and Multiconsult, 2002). Like this, the control of pay is delegated to the lower level authorities, i.e. away from the Government. This undermines the critical view that the unity of workers across the public sector and the opposition of the union are localized and uneven. 

5. CONFLICT BETWEEN INDUSTRIAL RELATIONS S AND PUBLIC SECTOR

This relationship is sought to identify and reconcile the conflicts between them which also help to fulfill the aim of the essay that is the criticism approach. This section is dedicated to study how PS and IR are critically linked with each other. If we talk in political side then Labour party worked together with Independent labour Party (ILP), Social Democratic Federation (SDP) and Fabian Society to represent the trade unions in Parliament and give them political support as trade unions always face problems by changes in Industrial Sectors (Fielding, 2003). On other side conservative party support free market and this leads towards the fact that employees are free to hire others while on other hand trade unions are also free to constitute there selves (Matthew, 1980), this means both parties are having different approaches this also leads towards conflict generation.

Apparently, IR is pluralistic in nature as compare with PS. It is because its boundaries are not only around relationship between employee and employers. Its domain is vast enough to cover labor unions and the state relations as well which is not cover in PS. IR theory is focused upon the collectivism in relations and this aspect is prominent in relationship with any entity while in PS the things are different as it limited to define boundaries. An evidence of this fact lies in the common practice that all these activities are concentrated on one place. It can be the matter of employee involvement practices, collective bargaining, freedom of association, labor law, trade unionism, etc. This is the point where it differentiates itself from PS, which is focused on human resource management only. The other critical aspect is that PS can be criticized in a ways that in IR employees has to adopt new environment where they have to work but in PS this is not the case as found by Rattso and Sorensen (2004) that in PS employees are less reluctant and they don’t want o change their intentions which make it less effective than IR.

Since PS and IR are two different areas and embedded in the core functions, PS becomes a dominant part in the organization which means that PS comes first then IS but this doesn’t mean that PS is the new heartland for approaching IS. There are the areas, in which IR has not made any significant contribution and in compare to PS, this leads towards one sort of criticism. The reason can be team building motivates employees to become loyal to the organization more than union itself. PS focuses on how to recruit the best talent and use it for organizational betterment. If required, PS allocates resources for betterment of the employees as it expects them to payback in good terms. It takes all the necessary measures to get the work done by productive employees who are satisfied and loyal to the organization. Attaining satisfaction and loyalty is an important function of PS. It can go up to the extent of offering flexible working hours to the employees. IR, on the other hand focuses on solving the problems faced by employees collectively. It works under the defined and specific laws which may be defined by state, courts or tribunals which make it limited and strict. In short, PS is related to managerial initiatives for improving and maintaining employee’s best performance level. There are four core functions of PS i.e. selection, appraisal, rewards and development of its workforce. By covering these four functions in PS, there are hardly any functions that are covered under IR. PS policies are defined for better functioning of employees hence encompasses major areas of organization. As mentioned earlier, they are spread in every function as well. IR is left with only a minor role to play with. The above discuss material show the bisect view and give this aspect that PS can be use as new heartland for approaching IS but on other side it is not necessary as both have their own significance and differentiations which make them distinct. One thing which is more important is the need of expense, on contrary IR is said to be one which needs more spending but it’s opposite to that and in PS side spending is relatively more in large government sectors this critically put it aside then IR ” (Van den Noord, 2000), Bouthevillain et al (2001).

6. PFI AND PRIVATIZATION

The PFI (Private Finance Initiative) was introduced by John Major’s Conservative Major Government in 1992. From the time of its introduction, it gained the attraction of many scholars as the most applicable variant of PPP (Public-private partnerships) in UK (see, e.g., Broadbent et al. 2005; Flinders 2005; Hellowell, 2010). There are a number of forms of PFI which can be brought in to practice, but DBFO model is preferred the most. In this scheme, the companies of private sector design, build, finance, and operate schools, hospitals and prisons. The PFI and prioritization is taken as advancement in public sector and consider as good step for IR but this also relate to the main objective of this essay in a ways that privatization done on public side which improves the IR side this shown that start is taken from PS side which is proven the statement of essay. On other side recent studies are focusing on the actual and probable costs that are being faced by the public sector bodies while they are making use of privatization policy which is very much in use at IR side. The studies are finding out facts like, whether the public bodies are saving their tax or improving their quality by implementing privatization policy this also leads towards the same fact that public sector is saving industrial sector by giving it strengthening base. Different researches have focused on the differences which have been created by the adoption of PFI by the authorities and this leads towards the point that PS comes first and is privatized which positively affect the industrial side (e.g. Shaw 2003; UNISON 2003; Shaoul 2005).

 7. CONCLUSION

After assessing both IR and PS and giving critical analysis it is possible that both the fields overlap, why it is happened can be brief by an example that is if the matter is of multiple individuals, IR will pursue it while in PS it is hard to move on with it. It will also focus on joint consultative mechanism that is why it is also known as collective bargaining. On the other hand, So the statement on which this criticism was based, can said to be true as IR and PS are interdependent so the support of one can help other, but as also prove by above discussion that PS and IR cannot be relevant to each other however first thing which is more important is PS but on other side IR can be important by some aspects, overall it is said that IR and PS are interlinked on critical basis both are not much different with each other but have some different aspects this proves above statement but not make it absolutely right. In end it is concluded that changes in IR can be brought by using PS or any change in PS can result the change in IS this reveals the same idea which is being stated in the objective of an essay.

8. REFERENCES

1.      Bonesronning, H. (2012), Public employees and public sector reform implementation ,Public Choice, forthcoming

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3.      Broadbent, Jane & Laughlin, Richard (2005), The role of PFI in the UK government’s modernization agenda, in: Financial Accountability & Management 21(1), 75-97.

4.      Fielding S. (2003), The Labour Party; Continuity and change in the making of ‘New’ Labour, Basingstoke, Palgrave, p.217.

5.      Flinders, Matthew (2005), The Politics of Public-Private Partnerships, in: British Journal of Politics & Industrial Relations s 7(2), 215-239.

6.      Gwartney, J.; Lawson, R.; Park, W.; Wagh, S.; Edwards, C. and de Rugy, V. (2002), Economic Freedom of the World: 2002 Annual Report. Vancouver, the Fraser Institute.

7.      Hellowell, M (2010), The private finance initiative: policy, performance and prospects. In Hodge, G, Greve, C and Boardman, A, Industrial Handbook on Public-Private-Partnerships. Edward Elgar.

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