ABV 320 UNIT 2 Final Summary

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ABV 320 UNIT 2: Labour Relations as a societal structure

What is important?
● LR system
● Ideological basis
● Role of the State
● Forms of state interference
● Roles adopted by the state
1. LR system
• A country’s LR system is shaped by all the different forces in that society
• LR systems are unique because societies are unique
• As societies change, so will the LR system
2. Components of the LR system
1. parties to the relationship
2. processes- such as collective bargaining and worker’s participation favoured by the parties
3. legal system governing the relationship

Variations in the composition of different systems

1. Parties to the relationship– employers, employees and state are the major role players in
employment relationship
o The role that each party plays and how important each participant is to this relationship will
ascertain the kind of system that is applicable.
o In certain systems the state dominates the relationship, in other systems the state plays a
junior role.
o In some societies the interests of the employer will be emphasised while in other societies
the employee will be regarded as the most important participant.
o Employees usually act through trade unions and the extent to which trade unions may be
exercise their power will depend on the government of that country, e.g., in some countries
trade unions are facilitated while in other efforts in organising may be restricted by
legislation and social circumstances- trade union actions vary in different countries
2. Processes and procedures–(Collective bargaining, dispute settlement(CCMA, LC, LAC),
communication structures and channels, in-plant disciplinary and grievance procedures)
o predominant processes in LR system: collective bargaining and worker’s participation
o varying emphasis placed on these processes
o sometimes one or both of these processes are compulsory and sometimes voluntary,
sometimes centralized and sometimes decentralized
o other processes include:
▪ dispute settlement procedures
▪ communication structures
▪ systems for the conclusion of agreements
▪ in-plant disciplinary and grievance procedures
3. Legal Framework-Legislation that regulates the employment relationship will differ from
country to country
o (degrees of compulsion protection granted to employers and employees freedom of
association (s23 of the constitution, s64 and 65 of the LRA) and collective bargaining
concepts of fairness)
o differences in the legal framework are found in:
➢ varying degrees of compulsion
➢ different forms of protection granted to employees and employers
➢ differences in application of freedom of association and the right to bargain collectively
➢ differing concepts of fairness and differences in legislation pertaining to this concept
➢ societies may establish laws not directly related to ER but influence the system

3. Ideological basis- a system of beliefs and values that have an effect to justify morally a society’s
social and economic relationship

These shape how individuals view themselves in relation to society and their roles within it and
represent different perspectives on the balance between individual rights and autonomy versus
collective interests and responsibilities

➢ all societies rest on a ideological basis


➢ dominant ideology of a society will determine the type of LR system in that society

2 ideological poles: individualism vs communitarianism

1. Individualism: THE INDIVIDUAL


ꟷ Individual persons or groups can make their own choices & pursue own goals
ꟷ They have little to no responsibility to society
ꟷ Society has no obligation towards them
ꟷ Society is secondary to the individual
ꟷ Society shaped by individuals
ꟷ government by the majority may be necessary for a democracy, but minority interests should
be accommodated
ꟷ conflict unavoidable and gtv should provide systems to accommodate it
ꟷ Key features of individualism:
o Emphasis on individual rights
o Minimal government intervention
o Self-reliance and personal responsibility
2. Communitarianism: THE COMMUNITY
ꟷ emphasizes the importance of the community and social relationships. It argues that
individuals are inherently connected to the larger society, and their well-being is
interconnected with the well-being of the community. Communitarians believe that a strong
sense of community and shared values is crucial for a functioning and harmonious society.
ꟷ Individuals are shaped by society
ꟷ It is acceptable to put yourself first/consider your own interests but that should not be
dominant
ꟷ The individual owes a duty to his or her society
ꟷ Individual’s interests are secondary to society
ꟷ Government duty to shape society and bigger government is needed to cater for the masses
(bigger government is essential)
ꟷ Minority interests are subservient to majority
ꟷ Conflict should be avoided, and co-operation and effort should be strongly encouraged pg42
ꟷ Key features of communitarianism:
o Emphasis on collective identity
o Social cohesion and mutual support
o Balancing individual rights and community welfare
HITLER-MANDATORIASM
Role of the state: government and state

• Represents society at large e.g., public policies based on societal needs and preferences, these
policies enhance the wellbeing of the society such as education, healthcare, social security etc
• In SA democracy diminishes when representatives in parliament are not elected directly by their
constituents, but by the relevant political parties.
• State / Government used interchangeably.
• State has a political bias
• Can be pro-labour or pro-capital
o This is important in labour/employment relations since it will with other factors determine
the degree of state interference in the work relationship.
• The degree of state interference in the working relationship will depend on whether it supports
voluntarism or mandatorism: (also depends on ideological basis)
• Voluntarism – minimal or no interference from gvt in the conduct of the relationship
• E.g., if gvt believes in voluntarism there will be little to no interference by the gvt in the conduct
of the relationship
• most societies, operating to a greater or lesser degree on the free-market principle supports
voluntarism as basis of labour relations system- but pure voluntarism doesn’t exist anywhere in
the world.
• Mandatorism- absolute or maximal gov. control of all aspects of employment (requires the gvt to
have full control and interfere in the conduct or regulation of the relationship)
• The government would need to regulate the employment relationship e.g., set minimum wages,
implement policies
• Occurs in a society where gvt also exercises control over all economic and social forces.
• In reality, voluntarism would have elements of mandatorism, because absolute voluntarism does
not exist anywhere in the world:
ꟷ The gvt which establishes legal framework for society, necessarily impinges on
labour/employment system
ꟷ Employment relationships if left solely to the main participants
(employers/employees/unions) may be inequitable, making it necessary to restore power
balance
ꟷ The conduct of labour/employment relations will impact society and economy.
ꟷ Labour relations involve politics- the gvt, being a political instrument , necessarily interests
itself in developments in this sphere.
• The government’s involvement is important because it would:
➢ Provide a legal framework for the conduct of the relationship
➢ Provide minimum protection to employers and employees
➢ Protect the society against extreme behaviour by either party
➢ Attempt to preserve labour peace

Forms of state interference:


• Degree and type of interference in labour relationship practiced by a particular gvt will depend
on:
o Ideological base(individualism/ communitarianism)
o Political objectives
o Socio political and economic circumstances
o Strength of union movement
o Can be pro-labour or pro-capital
Different state interferences:

1. Market individualism (weak union)


o GVT supports an individualistic ideology
o Is biased towards capital & adopts a laisses-faire approach to economy
o Weak union movement
o Where the economy is healthy, the tendency will be to adopt a hands-off approach to the
conduct of the work relationship
o Market individualism supports the concept of at-will employment, where employers have
the right to terminate employees for any reason or no reason at all, and employees can also
leave their jobs without providing a specific reason. This approach gives both parties
maximum flexibility and freedom in their employment relationships.
o GVT takes view that:
ꟷ Employers & employees are responsible for regulating their relationship
ꟷ Employment contract if the final regulator of the relationship
ꟷ Market forces will regulate employment practices
ꟷ While market individualism in employment relations can provide flexibility and individual
freedom, it also raises concerns about potential exploitation and unequal bargaining
power between employers and employees.
o However, institutions and laws may favour capital and entrench property rights
o nothing would be done to correct inherent imbalance in employee-employer relationship
and the unions themselves might not be strong enough to redress the situation
o Therefore, in most modern societies the increased power of trade unions and general
sociopolitical developments have led to the demise of market individualism.
2. Institutionalised voluntarism (Individualist government & strong union)
o Gvt is individualist orientated
o Is biased towards capital
o Supports free-market system(a type of economic system that is controlled by the market
forces of demand and supply as opposed to one regulated by government controls)
o Trade unions are strong and may also form their own employers' organisations
o GVT accommodates interests of employees and unions
o GVT may still adopt laissez-faire approach to the relationship, but it accepts trade unions
right to existence and may entrench this right in legislation.
o GVT may enact laws and policies that protect interests of employees e.g., workmen's
compensation, health & safety, unemployment etc.
o GVT sets framework for the conduct of collective bargaining but will not oblige participants
to engage in these practices
o Gvt recognizes interests of employees and accepts the significance and role trade unions play
(this may be achieved through enacting legislation)
o Collective bargaining is accepted, and processes & procedures are laid down.
o Right to strike and lock out is recognized and disputes are normal
o By adopting institutionalized voluntarism, the state aims to strike a balance between
allowing employers and employees the freedom to negotiate their terms and conditions of
employment while also providing a structured and supportive framework for labor
relations. This approach seeks to maintain industrial peace, stability, and cooperation
between labor and management, fostering a harmonious and productive labor market.
3. Pro-capital interventionism (strong union)
o Strong trade unions may sometimes result in economic or political threat which may cause
power imbalance between unions and employers
o Gvt may therefore interfere to reduce union power to curtail unions power through:
ꟷ Placing restrictions of industrial actions(strikes)
ꟷ Restricting TU’s activities in other spheres ( e.g collective bargaining processes)
o This form of interference is also applicable where the state had previously favored labour as
opposed to capitalism, state may therefore place restrictions on trade unions & encourage
capital accumulation
o This policy may also be adopted where a previous labour-oriented government has, in the
opinion of the new gvt, intervened too much on behalf of the labour e.g., nationalising
industries and allowing employees too much power in the workplace
o The new gvt will denationalise industries, encourage capital accumulation and place stronger
restrictions on trade union action
4. Corporatism (hovers between individualism and economic development)
o Economic/political developments may oblige gvt to intervene in labour relations
o Applicable where the economy of a country is not doing well e.g economic recession or
reconstruction
o Gvt may kick start the economy through requesting parties to avoid engaging in aggressive
collective bargaining to improve the economy
o Request unions to limit wage demands
o Employers to limit price increases
o This policy may be adopted with the voluntary cooperation of unions and employers
o If parties cannot do the above gvt may implement mandator policies and processes.
o This form of state interference is aimed at reducing the individual’s power of capital and
labour for the interest of the society as a whole.
o This approach hovers between individualism and communitarianism as it is meant to curtail
the individual power of both capital and labour in the interests of society as a whole.
5. Pro-labour interventionism (shifts towards communitarianism & distribution of wealth)
o Gvt may intervene if labour gains dominance in the economy or gvt objectives results in bias
towards labour- gvt may intervene on behalf of labour
o This occurs where economic ideology shifts to more communitarianism and seeks to
incorporate more social welfare principles or a social market policy
o Gvt may engage in redistribution of wealth (refers to the transfer of income and resources
from wealthier individuals or groups to those who have fewer financial resources or are less
well-off) e.g., income taxes, unemployment benefits, minimum wage laws e.t.c
o When this occurs, it is not necessary for parties to engage in aggressive CB and industrial
action or lock-out
o This will lead greater protection and promotion of employee interests and to an extension of
their rights in the workplace
o Typical outflows of such policy are compulsory employee profit-sharing schemes, workers’
participation schemes and regulations regarding employee or union co-determination on
boards of directors.
6. Pro-labour mandatorism (state control & bias towards labour)
o In a strictly communitarianism society
o Gvt is biased towards labour and restricts the free-market principle/system and will not
encourage capital accumulation
o Gvt/state has complete control over the employment relationship, and no perceived need for
trade unions in the form of collective bargaining or protection of employee rights
o Almost seem as if gvt becomes the employer
7. Pro- capital mandatorism (Individualist government bias towards capital)
o Absolute mandatorism prevails where a totally individualist gvt favours capital to the
exclusion of labour
o Since labour, which usually constitutes a majority of the national population, will have a vote
in gvt, this is unlikely to happen in a democratic society
o And is also not possible where there’s a strong trade union movement
o Individualist government bias towards capital
o This is unlikely to happen because:
ꟷ majority of the population consists of labour
ꟷ Where there is a strong union movement
o This policy will be marked by gvt intervention to curtail employee rights
o This form of interference is aimed at placing restrictions on employee rights and this may be
achieved through:
ꟷ Refusal to recognise trade unions
ꟷ Restricting industrial action(right to strike)
ꟷ Implementing laws and policies that promote and favour employers
o With this policy, the circle of gvt intervention is closed, as the next step would be the
adoption of a policy of market individualism

Roles adopted by the state:

• State as legislator- (Most important role) the state may enact legislation on employee rights,
CB, prescribe procedures to be followed by parties to relationship e.g. LRA, Code of Good
practice, BCEA,COIDA,OHSA
Type and amount of legislation will depend on a gvt’s overall policy regarding intervention in
the LR.

• State as conciliator-State may intervene in disputes through acting as a conciliator/mediator


in order to maintain labour peace e.g. CCMA
Conciliation, mediation, and arbitration services are established by gvt. The use of these
services may or may not be made compulsory by the gvt. In some case, the gvt itself may
interfere in disputes or act as mediator/conciliator.

• State as regulator- If state wants to regulate employment relationship it will have to


intervene more directly in the relationship and, particularly, in the conduct of collective
bargaining. The most common form of regulation is found in establishing an income policy or
a complete freeze on wages and prices, but the state also regulates the relationship when it
provides for compulsory recognition and bargaining and when it compels workers
participation at plant level.

Income policy: effort by gvt to control the incomes of labour and capital, usually by limiting
increases in wages and prices
• State as adviser- As employment conditions change new challenges emerge as such the state
needs to monitor the work relationship, identify gaps and challenges, and provide guidelines
on the conduct of the relationship and suggest areas that require improvement in the form
of recommendations. The state will establish various bodies to monitor developments in LR,
to produce guidelines on the conduct of the relationship and to suggest innovations to the
participants.

• State as controller of income distribution-state collect taxes from individuals (and public
enterprises) and utilize it for other purposes e.g., loans and use its financial power to bring
changes in the system. This will allow it to affect relative positions of capital and labour. Most
gvts make use of concessions in the form of lower taxes and other allowances for low income
earners. The state may also boost certain industries by loans or concessions and may use it
its financial power to bring about changes in the system.

• Role of the judiciary- The judiciary remains an instrument of the gvt (despite its
independence) The judiciary interprets common law and legislation relating to employment
relationships and interprets and applies the statutes passed by gvt to regulate the
relationship. The law and legislation is interpreted by competent dispute resolution bodies
e.g. LC, LAC, CC, HC etc. Certain gvts introduce labour courts dealing with only labour matters
to prevent problems.

• Role of the police-Role of the police is to protect the public & play a crucial role in
employment relationship e.g., during strikes and lock-outs where unions are also involved.
They do not side with any party and may intervene as the law-enforcement arm of the state
in cases of public disturbance= however the unions and employees are usually the ones who
cause disturbance, and the police are often seen as siding with employers. There police
intervention is only allowed in extreme cases- and only for public protection.

Tutorial questions:

Question 1: Which traditional approach is dominant in South Africa? (1) pluralism

Question 2: Name and explain 2 intrinsic factors that regulate the labour relationship. (6)
Question 3: Name and explain 3 different traditional approaches to the labour/employment
relationship. (9)

Question 4: Name and explain the ideological basis and the different ideological poles. (6)

Question 5: How did Covid-19 affect the employment relationship?

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