Industrial Relations, Labour Relations and Human Resources Management

Chapter One

Industrial relations, labour relations and human resources management

Industrial relations (IR) generally refers to the employment relationship in a unionized environment.  It examines relationships between employees (and their unions) and companies (and their managers) as well as the government agencies that oversee this relationship.

Some academics ague that the term industrial relations also encompasses the employment relationship in non-union settings but this is not the generally accepted use of the term in industry.  For example, the University of Toronto Centre for Industrial Relations at 121 St. George St. recently changed its name to the Centre for Industrial Relations and Human Resources to reflect the fact the IR tends to refer to unionized employment relationships while HR focuses on non-union settings.

Labour Relations – this term is less contentious and refers to employment relationships and issues in a unionized setting. Also known as union-management relations.  In many firms, the managers involved in labour relations for the company are called “Labour Relations Manager” or “VP of Labour Relations”

A union is a group of employees (at least two) who are recognized by law (Labour Relations Act) who collectively bargain terms and conditions of employment with their employer.

The terms and conditions of employment are contained in the “Collective Agreement” (CA).  Once negotiated, the company must abide by the CA and all employees in the bargaining unit are covered by the terms of the CA.

The process of negotiating the collective agreement is called collective bargaining.  It is “collective” in the sense that the agreement applies to all employees in the bargaining unit.  It is bargaining in the sense that both parties (union and management) attempt to get what is best for their side so there is compromise, give and take and attempts to exert power and influence over the other party.  One way a union attempts to influence power at the bargaining table is to strike (withdraw services of employees) or threaten to strike.  Companies can threaten to “lock out” employees as a way to exert power at the bargaining table.

The term Human Resources Management focuses on the employment relationship between the individual and the company and therefore applies to a non-union setting or non-union jobs in a unionized setting.

The term Employee Relations also describes the employment relationship between the individual and the company in a non-union setting.  

The use of these terms is not 100% fixed and agreed upon but the above definitions are generally found in practice.  When you go into a company, try to determine what language they use to describe HR and IR.

The Industrial Relations System

John Dunlop (1914 – 2003) – Harvard scholar an industrial relations guru who developed the first systematic method to analyze employment relationships.  His taxonomy consists of actors, a shared ideology, contexts and a web of rules.

Actors –

 Specialized government agencies – essentially departments of the ministry of labour in the federal and provincial governments.  The labour board administers the Labour Relations Act.

Managers – business owners and managers who manage the workplace and workers.  Usually it is a single firm but occasionally collective bargaining is industry-wide and therefore the employers in that industry form an “employer association” for the purposes of negotiating a single collective agreement that will apply to all unionized workplaces.  Some building trades have city-wide or province-wide collective bargaining. (example – the Electrical Contractors Association of Ontario negotiate province wide with the IBEW –International Brotherhood of Electrical Workers for construction electricians)

Workers and their Unions

Shared Ideology -

There is a general acceptance of the capitalist approach in the economy where business owners have the right to manage their firms with the goal of earning a profit.  The shared ideology defines the role and function of each of the actors and requires all three actors to respect the role of the other two.  Share ideology legitimizes the role of actor in the eyes of the other two.

A major flaw in Dunlop’s  model has been the deterioration in shared ideology.  We will discuss this further when we look at Strategic Choice Theory.