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Employment Relations in Globalisation

By: Dotsie M. Gordon, MA. CHRP
Employment and Human Resources Consultant
Dot Personnel Services (Ja.) Ltd

a) Introduction

An Employment Relationship is evident when the employer has the right to assign additional projects to the worker/employee; the work schedule is determined by the Employer; the individual is paid on a regular basis hourly, weekly or monthly; where the employer recruits or dismisses workers supervised by an individual; where the worker receives employee benefits from the person who pays for the work; where statutory tax is deducted; where the employer instructs the worker; where the employee works on the employer’s premises and is reimbursed for expenses and where the individual has the right to terminate the relationship since independent contractors are normally bound by contracts 1 .

This paper will therefore attempt to highlight seven areas of employment relations beginning with the contract of employment and ending with termination and separation. Deakin and Morris alludes to the point that in Great Britain, “the individual contract has been skilfully refashioned by the courts to take collective bargaining into account while leaving the individual free to negotiate and enforce his own contract, which maybe either more or less advantageous to him than the terms of the collective agreement”. 2

The Fairness at Work Act3 also challenged the trade unions that while securing membership and recognition, their representatives are expected to promote effective dialogue with both employees and employers. Many tests have been applied during the past century to determine the employment relationship but with the new forms of work this will continue to be guided by policies and practices in globalisation.

b) Contract of Employment

The Common law leaves an employer with the freedom to contract with whomever he chooses and for whatever reason but statute does impose restrictions upon the freedom in the selection and recruiting processes. The breach of some of the provisions attracts criminal sanctions. There have been various arguments as to the relevance or equality of the individual contract of employment, resulting in legislation to protect the weaker party. The contract of employment is based upon the general contract principle of offer and acceptance and a contract is created once the employee turns up for work hence any change of mind by either party can result in a breach of contract and a claim for damage. 4

Statute has played a very important role as a source of the terms, which provides separate codes from which employers cannot abrogate since the contract of employment5 . A contract of employment can be made up of implied terms or expressed terms - oral or in writing. Employees owe a number of duties in the employment relationship at common law, which can be applied in the absence of expressed terms. Under the Health and Safety at Work6 , there is an implied term at common law, which shows that the employee owes the employer a duty to use reasonable care, in relation to the performance of his job. This duty of care also extends to vicarious liability as held in the case of Lister v. Romford Ice and Cold Storage Co. Ltd. Both the employer and employee have a mutual duty to maintain trust and confidence as demonstrated in the cases of Secretary of State for Employment v. ASLEF 7; Creswell v. Board of Inland Revenue and Woods v. WM Car Services8 Watkins L.J. held that: “the obdurate refusal of the employee to accept conditions very properly and sensibly being sought to be imposed upon her was unreasonable. Employers must not, in my opinion, be put in a position where through the wrongful refusal of their employees to accept change, they are prevented from introducing improved business methods in furtherance of seeking success for their enterprise”. It is implied in every contract of employment that the employer owes the employee certain duties from which he cannot abrogate.9

Inspite of all the changes that will impact on the contract of employment, the Courts are always willing to look at the way the parties conducted the contract of employment and imply a term, which is reasonable to all parties in the absence of expressed terms. The EC Directives are also imposing a new range of responsibilities and duties on the employer. Other legal instruments within global trading are also impacting in a similar manner, therefore, the contract of employment must be developed with the utmost care and concern for the individual and the organisations good will as well as form part of the policy initiative to ensure harmony at the workplace. Under the Employment Relations Act10, the Trade Union and Labour Relations (Consolidation) Act11 has been amended. Under Section 13 of this Act, there are several definitions of the worker as well as several classifications and they do not have protection or benefits since they do not qualify to be employees in the absence of a contract of employment. The Employment Relations Act12 amended the law relating to employment, trade unions, employment agencies and businesses while the Government through the Department of Trade and Industry after consultation with the Confederation of British Industries, the Trade Union Congress introduced the white paper ‘Fairness at Work’.

c) Recruitment and Selection

This phase of the employment relationship should provide an easily understood approach to successively ensure that the job description, the application, initial employment, orientation, training and performance monitoring are conducted with the ultimate goal to ensure good employment relations. The results of the hiring process reflect on the firm’s mission, goals, products and/or services, and the effectiveness of work results. The need for a Programmatic Approach to classify, attract, screen, select, orientate, train and evaluate a new hire simultaneously, with the need to put in place the Administrative Approach components that will ensure that the process, action and decision will be well documented, thorough and legal, are important. 13

The true test of any employment programme is whether new employees can learn and accept all of the firm’s employment related conditions, become quickly productive, acquire the special skills and behaviours needed, the desire to make more than the minimum contribution to the firm’s goals and embrace and adapt to the operational conditions. People are at the heart of any business and human resource strategy. The “New Firm” of this century will need quality people, therefore the recruiting strategy must be developed in a professional way to meet world standards with specific consideration of the international framework, the movement of people in the context of international trade, enhanced productivity and competitiveness. Since no two organisations are the same, there must be creativity in setting the policies. It is also essential that in setting policies, a framework be established for their administration and review. If the organisation is unionised, the personnel/human resource policies are the subject of collective bargaining and cannot be implemented unilaterally, but must be presented as any other union/management proposal.14

The preventative approach in employment relations begins with the recruitment process. It is important to keep in mind the cost/benefit of a good or bad recruit since hiring the right people can mean (1) a better run operation, (2) better production, (3) fewer people problems, (4) better morale, (5) lower turnover, and (6) less administrative time spent on re-hiring. It is also essential that care be taken in preparation for the selection of candidates. There must be a review of job content, requirements, skills, duties and essential job functions, the essential physical and mental requirements relating to the job description; details of the organisation’s policies and benefits, programmes, involvement of other interested persons; the structure of the interview, the predetermined location, the time frame and list of questions. A check list of activities can also be prepared which would include sources of candidates for selection; advertisements; recruitment and employment agencies; staff leasing agencies, executive search firms, outplacement services, job search consultancies, human resource consultancies, job banks or corporations, career management services, computerised data base services/search engines, specialised trade and professional associations; employment applications, unsolicited applications and resumes, interview ‘checklist’, selection tests, credit checks, arrests/convictions and legal consideration.15

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d) Compensation and Benefits

Traditionally, there are some principal obligations acquired by each party to an employment contract or relationship. The employer is expected to pay wages; provide work; take reasonable care of the employee; indemnify the employee for expenses and liabilities incurred in the course of employment and treat the employee with courtesy. The employee is expected to render a personal service (by being physically present) take reasonable care in the performance of his duties; obey reasonable instructions from his employer; act in good faith towards his employer and refrain from impeding his employer’s business. At the centre of the employment relationship is how to compensate and administer benefits. It is therefore important that the employee, after selection, be given a written statement including the scale or rate of pay, the intervals at which the payment will be made, the normal hours to be worked, entitlement to holidays, sick pay arrangements, pension scheme arrangements and health benefits.16

Compensation represents the prime source of revenue for employees and the value they place on each element of compensation (salary and benefits) is essentially dependent on the ability of each element to meet their needs. In the exchange process, compensation encompasses salary and employee benefits and can be seen as a concrete expression of exchange between the employee and the organisation. Belcher and Aitcheson17 and Mahoney18 believe this transaction has a number of facets including economic, psychological, sociological, political and ethical. From an organisation’s perspective, the exchange is designed to recruit and retain the necessary labour and to elicit employee behaviour capable of fulfilling its mission. The individual objective may be to satisfy different needs, eg. Maslows 19

It is important that Compensation and Benefits be managed based on policies relating to internal consistency, competitiveness, employee contribution and the nature of the compensation administration. The concept of managing compensation has been through three stages, first on the concept of ‘job’ where job evaluation techniques were developed, then the social science phase of the 50s and 60s when without changing that jobs were important the attention focused on people with the present focus being on strategy – strategic compensation management. 20

e) Diversity/Equal Opportunity

Diversity is expected to assist in the creation of high performing organisations through targeted culture change strategies since organisation culture is a powerful dictator of behaviour. This change usually over time results in greater commitment, self-confidence, ethical behaviour and a reduced level of stress at the workplace. Diversity also has the capacity to remove equality from a generalised approach to the identification of individual character, integrity, maturity, experience of personal relationships and other elements of life profile since any or all these qualities may be present in either sex.21

Diversity is a cultural and individual approach; it shows an awareness of difference in old and young, black and white, skilled and unskilled, part-time and full-time, long-term and short-term employees, rich and poor, Jews and Gentiles, educated and illiterate, from North and South, rural and urban, height and weight, and speed of learning and communication and is directed at everyone in the workplace. Diversity uses many labels to accomplish the same goals and everyone in the organisation is involved since it shows an interest in self-worth and enhanced productivity. It is a proactive approach to ensure continuous awareness through education; a strategic policy initiative in individual organisations; looks at all categories; combinations and levels of employees; a team-based approach focused on merit and differences within groups; a broad based approach relating to employees’ future and customers; it encourages flexibility and openness and recognises the significance of ‘difference’ in everyone. 22

Hakim notes that while evidence in occupational segregation, sex, differentials in labour mobility, work experience, hours worked, earnings level and other social factors have impacted on the employment of both men and women, theorists have tried to explain women’s subordination through theories in patriarchy and male dominance.23

In spite of Legislation and other initiatives, there is still evidence of discrimination because of the vast number of social groupings and non-compliance by many employers. The following expressions of social engineering authors were of special interest in my quest to conclude that diversity is a strategic management concept, which will merge with equal opportunities for relevance in employment:

“We are most likely to develop a sensitive understanding of the needs and demands of all members of the population of Britain if we adopt language which enable us to capture its richness and diversity” 24

“ The term ‘Equal Opportunities’ embraces all aspects of equality and includes all types of discrimination such as sex, race, marital status, age, disability, sexual orientation or any other situation where some people are treated less favorably than others” 25

The implementation of the Policy would be a commitment by the employer to the development and use of employment policies and practices, which do not discriminate. In Great Britain, an Equal Opportunity Employer would be guided by the Equal Opportunities Commission Code of Practice relating to sex, marriage, equal pay, the Commission for Racial Discrimination, the Disability Discrimination Code of Practice, the Equal Treatment Directive and the Employment Rights Act26 .

The policy would include the principles, responsibility, accountability, monitoring, positive action programmes, training, sources of resistance and the mechanisms for review and development. It would also ensure individual equal opportunity from recruitment to separation and in some cases extend to pension rights and benefits until death. 27

The EOC Code of Practice recommends not only the avoidance of informal recruitment practices but also the training of employees in the provisions of the Sex Discrimination Act. Training to achieve fair selection must focus:

“firstly, on the formal provisions of Equal Opportunity legislation; secondly, on the informal process and self-fulfilling dynamics which characterise stereotyping, and sex-typing and thirdly, on the technical ‘bridging’ skills necessary to facilitate entry into male-dominated occupations”.28

Although the work climate for women appears to be improving there are clear indications that equal opportunities have not been achieved in many areas. It is hoped that OPPORTUNITY 2000, will continue to supplement employment practices and working conditions that will support the development of a balanced work force enabling the culture change model. Since the purpose of job selection is to select the best man or woman for the job, the recruitment process must ensure that advertisements, job postings and other information relevant to vacancies are directed at both men and women, target all groups, and job descriptions do not show bias but invite other groups such as disabled and minorities to apply.29

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The CRE Code also recommends that:

“gate staff should be instructed not to treat applicants from particular racial groups less favorably than others, that staff involved in recruitment should be clearly informed of the selection criteria, given guidance and training on the effects of generalised assumptions about race and selection decisions and made aware of the possible misunderstanding that can occur in interviews between persons of different cultural backgrounds”. 30

i) Qualifications or requirements applied to a job which effectively inhibit applications from one sex or from married people should be retained only if they are justifiable in terms of the job to be done;
ii) Age limits should be retained only if they are necessary for the job. An unjustifiable age limit could constitute unlawful indirect discrimination, for example, against women who have taken time out of employment for child rearing;
iii) Where trade unions uphold such qualifications or requirements as union policy, they should amend that policy in the light of any potentially unlawful effect. 31 & 32

A comparative study of Equal Opportunity and Diversity shows that Equal Opportunity is focused on detection and punishment by legislation through a generally discriminatory approach; it identifies disadvantaged groups and minorities as mainly men and women, the disabled, ethnic and racial; administered through the Personnel and Human Resources Management Functions; a reactive approach focused on contract compliance procedures; considers the typical workplace; formulated for specialised groups thus contributing to segregation; consider company employees only; jobs are more structured and rigid with a ‘woman friendly’ approach. Diversity encompasses race, sex, age, goals, values, roles, expectations, thoughts, beliefs, sub cultural norms, personal histories and incorporates both physical, demographic characteristics as well as psychological differences which are reflected in values, attitudes and norms. It is a key concept in the continuum towards achieving equity, since equity means that no one should be denied access to resources or opportunities based on irrelevant grounds like race or gender. 33

Special care must be taken in the interviewing and selection, training and career development, promotion, compensation, benefits, evaluation, grievance, disciplining, separation and termination processes to ensure that management take responsibility to guide and constantly keep supervisors aware of new policies and procedures to maintain equal opportunity at the workplace.

f) Training and Development

Globalisation is showing us all a new age so crucial for future business success that there will be the need to observe the cultural norms of business and integrate training and executive development within the organisation’s strategic plan. The key to capture and serve global markets is to institute global learning, the challenge is that the future hinges on people and technology and the innovative management of both. Free trade increases the flow of money, people, products and services. The aim is to move up with the rest of the world and become winners by creating the future through invention. Business success is very dependent on how workers are involved; therefore training and development should have a team/organisation approach.34

Brent White advocates ‘Big Picture Training’ which can do informally what many structured programmes cannot do. This approach helps employees feel a sense of active participation in the business; understand and assimilate organisational change in response to the outside world; share the updated leadership vision for the organisation; share the central mission; instill and reinforce core values and changing company culture; provide insights and give more accurate perspectives on the business; actively involve all employees in the thought process; create productive information flow throughout the organisation; foster integration and continuous innovation; teach fundamentals of change, customer focus, group problem solving, productivity and quality improvement; show needed connection across the organisation; help all employees understand the business possibilities; and encourage employees to share insights about how to improve the business. 35

The concept of looking at the complete development of the organisation gives the potential to improve the competitive position by improving productivity, building trust, improving communication and reinforcing interdependence among other employees. The organisation can be transformed through the process of sensing, visioning, connecting, targeting, equipping, collaborating and regauging.36

This team/organisation wide approach is appropriate for both individual employees as well as those who are part of the collective bargaining process. The above approach can also be implemented in association with other structured programmes established through the Personnel/Human Resource Management Programme.

g) Alternative Dispute Resolution

In Great Britain, the Employment Rights37 Act38 now provides an alternative to Employment Tribunal hearing for unfair dismissal. The independent Advisory Conciliation and Arbitration Services39 is intended to provide a speedy resolution to unfair dismissal claims; avoid the formality of a tribunal hearing; minimise expense; move away from legalism and if possible restore reinstatement as the primary remedy. 40

A new ACAS Code introduced as part of the Tribunal Reform, underpinned by the Arbitration Act41, was granted Parliamentary approval and implemented in Spring 2001. 42

The ACAS commitment sets out standards of service, which users of ACAS can expect, and what to do if they have not been met. Its mission is to improve the performance and effectiveness of organisations through an impartial and independent service, which will prevent and resolve disputes and build harmonious relationships at work. It promises to act independently, impartially and with integrity; respect confidentiality; be accessible to all and respond promptly to all requests for information or assistance; use resources cost effectively within budget; continue to develop a highly motivated and committed workforce able to deliver services courteously, efficiently and effectively; its service standards will be aimed at preventing and resolving collective and individual disputes by tri-partite advisory mediation, collective conciliation, arbitration and mediation. The intention is to reach voluntary settlement without the need to attend a tribunal hearing. 43

Alternative Dispute Resolution is part of an effective International Human Resource Management System44 designed to enhance dialogue at the workplace and encourage reinstatement rather than termination following high recruitment, orientation and human resource development costs. It will reduce litigation by settling disputes at the first stage and contribute to increased productivity. It has been successfully implemented in Canada, New Zealand and Ireland. In terms of productivity, Ireland is a typical example of what can be accomplished in the use of alternative dispute resolution.

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h) Transfers, Termination and Separation

Access to the statutory right of unfair dismissal rests upon a valid contract so that where the contract is tainted with illegality, eg. employees ‘collusion’ in evading tax, access to that right is lost45. The existence or the likely existence of a contract is the basis of worker’s access to the vast majority of statutory employment protection rights46.

Since 1997, the British Government introduced or amended sixty-four (64) Employment Related Statutory instruments in keeping with the European Court of Justice, the Social Protocol, Labour Standards of the International Labour Organisation and the International Human Rights Council. The Fairness at Work – Employment Relations Act 1999 was in response to new rights for labour 47

It is of utmost importance that termination and separation be managed in accordance with the changes in the present competitive environment. Transfers will require records of vacancies and succession plan relating to key leadership and professional roles. Transfers might result in lateral moves or even demotion to avoid redundancy but it is advisable that no one should be promoted unless their performance indicates the potential to completely fulfill the new role. Terminating employees through a process of early retirement as a means to avoid redundancy and outplacement might have adverse impact on staff morale as well as the ‘last in first out’ formulas are not always appropriate since the last may be the people with up to date skills and attitude that will take the firm into a new phase of development 48

Separation relates to those who have reached pensionable age or might have become disabled, or too ill to continue work. It is important that managers seek counsel and be guided by the appropriate policies and standards relating to the firm, nationally and internationally. The Human Rights Code, International Labour Standards, legislation and codes of practices are good sources for guidance and instructions. Dismissals should be undertaken based on established procedures in the contract of employment collective agreement or the employee handbook. Human Resource Management will continue to develop new models and styles for different parts of the workplace, establish policies in discipline and attendance and examine how different approaches can be combined. 49

In keeping with the present trends facilitating globalisation and the reform of labour market regulations emphasis must be placed on creating an environment that will encourage flexibility, competitiveness and engender equity and harmony in the employment relationship.


1 (Employment Rights in Act 1996 S.230[3] and the Trade Union (Consolidation) Act 1992, S.295 [1])
2 (Deakin and Morris, Labour Law, 2nd Edition, Butterworth’s 1998, p.134)
3 (1999)
4 (Taylor v. Furness, Withy & Co. Ltd (1969) 1 Lloyd’s L.R 324; 6KIR. 488)
5 (Desmond & Antill Employment Law, Sweet & Maxwell, 1998, Ch.3)
6 (etc. Act 1974)
7 (No. 2 [1972] 2QB 455CA)
8 (Peterborough) Ltd [1982] ICR at 702 CA
9 ibid 1
10 (1999 Chapter C.26)
11 (1992)
12 (1999)
13 (Joseph D. Levesgue, Complete Manual for Recruiting, Hiring and Retaining Quality Employees, Prentice Hall 1996 vii)
14 (ibid 1)
15 (Loren K. Allison, Employee Selection - A Legal Perspective, SHRM Foundation 1996)
16 (G.A. Cole, Personnel Management, Theory and Practice, 4th Ed. Letts. Educational 2000)
17 [1987]
18 [1987]
19 [1954] (Roland Therault, Mercer Compensation Manual, Theory and Practice, Morin, CCH Canadian Ltd 1992)
20 (Ibid)
21 As one Employer to another…. What's all this about Equality? ILO Geneva 1996
22 Ferris, Frink, Galang, Diversity in the Workplace; The Human Resources Management Challenges, Human Resource Planning, Vol. 16. No.1 1993
23 (Catherine Hakim, Key Issues in Women's Work, Female Heterogeneity and the Polarization of Women's Employment; Athlone, London 1996)
24 Race and Ethnicity in Modern Britain, David Mason, Oxford 1995
25 Industrial Relations Texts and Cases Studies, by G.D. Green, Pitman Publishing 1994 4th Edition
26 (1996)
27(ibid 1)
28 Barriers to Fair Selection, D. Collinson, Equal Opportunities
29 (ibid 1)
30 Case (1) Cardiff Women's Aid v. Hartup n's Aid v. Hartup (1994) IRLR 390
31 Case (2) Richards v. Hodgson and Review Restaurants Ltd., case no. 7086/93
32 Blackstone's Statutes on Employment Law, Richard Kidner 1999-2000, 9th Edition
33 Monica Belcourt, Phillip Wright, Managing Performance through Training and Development (Wilson 1991) Nelson Canada 1995
34 (Brent White, World Class Training, Odenwald Press, Dallas)
35 (ibid 1)
36 (ibid 2)
37 (Disputes Resolution)
38 (1996)
39 (ACAS)
40 Employment Review, Ford & Warren Reviews, http://www.forwarn.com/e21dec98/report4.htm)
41 (1996)
42 (Adobe/Acrobat: 10071 arbicsit pdf (31.3) www.ACAS.org.uk/10073.htm)
43 (http://www.acas.org.uk/5657-version=1.htm.)
44 (IHRMS)
45 (Labour Law in Britain, Roy Lewis, Blackwell 1986, p.560)
46 (Roy Lewis, Labour Law in Britain, Blackwell 1986 -p.556 -561)
47 (The Way Ahead, the White Paper, Fairness at Work - the Employment Relations Act 1999)
48 (Peter Davis, 'Human Resources Management in the Co-operative Context' Chapter 1, ILO Geneva, forthcoming 2002)
49 (Assessment Markets and Managerialism, Paul Edwards, Industrial Relations, Theory and Practice in Britain, Blackwell Ltd.)



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