how the changes of the working environment affect employee relations

Nabeel Arshad

Ao6

Ao6: Explain how the changes of the working environment affect employee relations.

Changes in the working environment

Legislative Change

Legislation is what keeps employees from protecting their right and also make sure that businesses cannot discriminate them as well as abuse them such as making them work for more than 48 hours which is a violation of the Working Time Directive. Legislation will effect more people than the employees, I will make sure that the employees get paid the correct amount for the work that they do, legislation will also make sure that large businesses such as fast food take away like Papa John’s do not own more than 25% under the Monopolies and Merger Act 1965 because it will make it harder for smaller businesses to get establish into that market. Legislation also makes sure that the customers but the products that the business described and for that price under the Trades Description Act.

Not only legislation effect every person in that certain country, it is also updated to make sure that the legislation is suitable for that time and because times change, it common that new Acts will be created to make sure that the general public are safe such as the Terrorist Act 2006.

A good example of an act being violated is what happened in 1996 when a bakery firm known as Harvestime Bakers violated the Health and Safety at work Act and two of their employees were killed. What happened was that the large rolling oven that made the bread for the outlets began to malfunction and the supervisor made two of Harvestime Bakers technicians to try to fix the problem when though they did not have all the information and training to fix an oven as big as the one that had the problem. The two employees were still told to fix the oven, even though it was turned off, the oven was not cooled down and because of the shape of the oven the employees could not go back from the way that they came from and were trapped, they became severely burned and died on the way to hospital. This is a clear violation of the health and safety Act 1974.

As a result, three directors were fined in total of £373,000 for their role in this accident and the managing director John Bridson, the production director Brian Jones and the chief engineer Dennis Masters accepted responsibility.

The effect that this example has had on the employee relation is very important because it effect more than the employer because when the two employees of the bakery died, the other employees were probably thinking that it could have been them and also they will start to wonder if the employers and the business as a whole tries their best to take care of them while they were at work. This would affect the employee’s communication with the employers and they might decide to leave the business. Most of the employers of this business were punished by paying a large amount of fines and this shows that it affected more than one person.

The affect that this example had on the business was equally important because the employees died over the company’s mistake that could have been prevented and as a result the business could have received a bad reputation which could lead to the company going into administration in 2004.

Economic Change

Interest Rates

Interest rates are basically the charge for lending money to an individual such as a customer. It is mainly paid in regular instalments and the rates depends on the person that you have applied the loan or mortgage with. Long term loans have an interest rate that tends to be no more than 2% above the average and it is what the banks and building societies get for offering to lend money to the customer. However with savings accounts, it is the amount that the account hold will get added extra into their account.

The way ...

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Interest Rates

The way that the interest rates affect the working environment is basically by knowing that if the interest rate changes to a higher rate, then it would mean that the employees that are in debt will mean that they will have to pay more than they did before. And this could affect their working environment because might mean that they will have to work more hours just to cover the higher rate. Interest Rates is a long term thing that all employees will be affect by because it means that the businesses or the employees cannot afford to barrow a large extent of money from the bank.

Exchange Rates

Exchange rate is basically the price of one country’s currency in relation to another country’s rate. A good example of this is £1 is the same as $2 which basically means that one pound is worth two dollars. The exchange rate will determined on foreign exchange markets and is also free floating and changes when a greater demand of that certain currency. Exchange rates will affect the imports and the exports of the businesses and also

The effect that the working environment will have on the working environment is almost the same as interest rates but it is mainly for employees that give money to their family in another country. If the pound of not that greater than the other currency such as the dollar, then it would mean that the might have to work longer to cover the higher rate. Also if the pound is strong, then it will mean that the employees will know that their currency is stable which will show that the business is also stay strong.

Inflation

Inflation rate is basically the expected rise of prices in the UK and when the inflation rate is very high, and then it is known as hyper inflation. Its effects everybody because it means that the price of the goods that they purchase will cost them more or less than last year depending on the inflation rate.

The inflation target that the bank of England sets is 2% and is expressed in terms of an annual rate of inflation based on the Consumer Prices Index (CPI). The remit is not to achieve the lowest possible inflation rate. Inflation below the target of 2% is judged to be just as bad as inflation above the target meaning that it should be balanced. If the target is missed by more than 1 percentage point on either side then the Governor of the Bank must write an open letter to the Chancellor explaining the reasons why inflation has increased or fallen to such an extent and what the Bank proposes to do to ensure inflation comes back to the target.

One of the biggest affect that inflation rate has on the working environment is that because the price of everything is rising, the same will happen to the employees pay because it should rise according to the inflation rate.

Recession

Recession is basically when the income and the output of a country begin to fall which could be caused by a number of reasons such as a business such as MG Rover falling into administration and therefore they cannot pay manufacture cars and pay their employees.

A recession occurs when the level of real national output declines over two successive quarters causing a reduction in the total volume of production in the economy. There have been five years of full-scale recession in the UK economy during the post-war period. The last recession occurred from 1990 to 1992. Since then the economy has enjoyed the longest sustained growth of national output for over thirty years.

Political Change

Local Government

The UK is made up of a large amount of cities and towns and these towns and cities all will have their own local government and in most cases, they will be known as councils such as the Birmingham Council. They are similar to a national government but the biggest difference is that the local government will only have the power to influence their area. The national government makes laws and by laws but in most cases, it is the local council that enforce them in their area. They also make sure that the people that live in their region do not break any laws and are treated fairly. Some of the power that they have is that they decide where to put parking, congestion charge areas in their location because they will know better than the national government on where to place them.

The way that the local election will effect the working environment will depend on what the party says that they will do such as create more jobs which will mean that they have the opportunity create new businesses and working environments. They could also make it safer for the employees while they are at work by making sure that the certain laws such as the health and safety act is taken into consideration by the business.

National Government

The government is a body of people that govern a country by making laws, powering authorities such as the police to enforce the laws and sets new laws that would be ideal for a certain situation. It is similar to the local government but the biggest difference is that they do will affect the whole of the country unlike the local council which will only affect their community. Governments departments as well as Parliament make most of the laws with in the UK. Primary law is also known as statute law or Acts of Parliament.

Parliament consists of the House of Commons, which is all of the MP’s of different parties that have a seat in the house of Parliament. The MP must be elected in an area of UK in order to get a seat in parliament. Parliament also consists of The House of Lords, which is made up by lords that are either selected by the government. Both House of Commons and House of Lords have the power to pass a law through. Any courts cannot challenge an Act of Parliament and this mean that they have the power they can override any other law.

The election in which the Labour party won in 1997 is known as a ‘landslide’ victory because they went into power with a large margin. Some of the changes that they would do in the first term of power is basically make sure that the NHS gives the people what they wanted, create a good working environment for employees by creating new laws to stop certain discrimination such as disability discrimination under the Disability Discrimination act 2005.

European Union

The European Union was originally formed in 1992 under the Treaty of European Union which was also known as Maastricht Treaty and it replaced the European Economic Community. It was one of the first international governing bodies and its legislation affected the union countries such as the UK, France, Germany, etc…

The laws that the European Union makes affects all of the countries that are a members and also it makes sure that the laws have been enforced. Some of the legislation that they have made includes the Working Time Directive and is closely linked with other forms of organisations such as the European Court of Justice.

Both the UK and European government will take a few months to create the laws. The UK government will make the way using the following procedure: -

Start

Green Paper, the reason why this stage is known as green paper is because the Bill is first written on green paper.

White Paper is when it is formally ready to be read out.

First reading in the House of Commons, this is where they introduce the bill to the House of Commons and explain why there is a need for this bill at the moment. There is usually no decision or debate made on the bill at this stage and the main parts of the Bill are read out.

Second reading in the House of Commons and at this stage the bill will be debated on and most of the MP’s will hand their decision on if this bill is suitable at the end of this reading their will be a vote to see if a majority of MP’s believe that the Bill should be sent to the next level.

The net stage is the report stage which is basically having the bill sent back to the House of Commons with the suggested amendments. Each amendment is voted o be changed by the MP’s, this will mean that the amendment will only take place if a majority of the house are in favour of the change.

Third reading which is the final vote on the bill, this is just so all of the MP’s understand more about the bill and a final chance to find any problems with the bill. If there is any floors with the bill, then at least six MP’s will need request it to be amended again.

The next stage is exactly the same stage as the House of Commons, but this time it will be going through the House of Lords, the bill will go back to the House of Commons if the House of Lords make amendments to the bill.

The queen has to agree to be bill and give her Royal Consent, at this stage the bill becomes formal and turns into an act and is ready to be used in the UK. The Act will be given a year which is the year that it was made, this indicates of the Act is becoming out of date.

It is a lengthily process and once that bill has been turned into a law, the law must be enforced within one month.

Industrial Disputes

Rationalisation

Rationalisation basically means that business structure is being reorganised or a certain industry is also being reorganised for the business to become greater and also more energy efficient.

There are many example of rationalisation, A good example of ACAS being used in 2005 when BBC employees declared a strike after 3780 jobs were about to be lost. The main reason why that there was a strike is because there was no need for the employees to loose their job because the BBC financially was strong and the only thing that the Managing Director could say was that it was to stream lime the business, in other words make it cost effective.

Diversification

Iphone

Change of ownership

There two ways that the businesses can change their ownership, one is by a takeover which is when a company buys more than 51% of the company shares and there they have overall control of the business. This is mainly with limited companies such as Public Limited Company and a Limited Liability Company.

A good example of this is when ITV because ITV is the UK’s largest commercial Broadcast company, it is also one of the oldest broadcasters in the UK and over the years the company had been receiving certain problems because its main channel ITV 1 has the number of viewers decreasing due to other broadcasters offer better programs and also other services such as channel four offer four on demand. As a result, ITV’s share of advertisement has fallen to their competitors however TV is still the most watched channel in the UK with hitting targets over 45 million views every week. As a result, of the amount of views that they have, there had been a large number of interest of the company by their competition such as SKY and NTL later known as part of Virgin Media. It had been known as a battlefield where the bugger companies will survive. SKY paid £940m in the forms of shares and taking a stake of 17.9% and NTL’s takeover bid was then declined by ITV because they felt that they will do not good to ITV. Later NTL complained to fare trading that SKY had violated the Enterprise Act by buying more shares of the business and trying to gain more percentage of market even though they are the largest business in the market.

The second is when two companies come together to make one company often to achieve economies of their size. There is certain legislation that would affect the business and they include the Monopoly and Merger Act. This act basically makes sure that no business can own more than 25% of the market. For

The Monopoly’s and Merger Act is almost the same as the Monopolies and Restrictive Trade Practices Act 1948, the reason why I believe this is because the business will have to make sure that they pass on cases to the MMC (Monopoly and Merger Commission) so that they could be investigated the business for any wrong doings. Both the Monopolies and Restrictive Trade Practices Act 1948 and the Monopoly’s and Mergers Act work on the same bases which are to prosecute monopoly business and to pass there cases to the MMC.

A good example of a business that is being merged together is the two mobile phones companies Ericsson and Sony who in 2001 decided to merge into Sony Ericsson. One of the reasons why they have decided to merge together is because Sony recently entered the market and where unable to compete with the larger and more established companies such as Nokia and Motorola. The Company Ericsson had a similar problem because they have been in the market for a long time however, they were unable to cope with Nokia and Motorola who at the time had phones that were more advanced then their models and as a result, they decide to merge with Sony. Once the two businesses have merged together in this industry, they released their first phone in 2002 which was the first phone which was a T68m which had a various number of new technologies such as a colour screen and also the first phone to have Bluetooth.

The affect that this example have had on the business is that because