A 1 a.m. start: Northgate Hotels offers Lena's Bakery Ltd a contract: fresh rolls for twelve hotels by 6 a.m. The vans leave Mill Lane at 5 a.m. now; they would have to leave at 4. So Lena tells Priti that from next month the night shift starts at 1 a.m., not 2.
The same week the bakers hear that this year's pay rise is 3%, while prices in the shops have gone up 7%. And Lena is pricing a machine that divides and shapes dough, the job two bakers do by hand.
Tom says what the whole shift is thinking: "Nobody asked us."
The relationship between a business and its employees, and the people who speak for them, is employee relations (industrial relations). Conflict is part of it, because the two sides want different things: you met this in 1.4, where owners want lower costs and employees want better pay and security. A source of conflict is the cause of a disagreement: the decision or the situation that one side thinks is unfair.
Money
- Pay that falls behind rising prices, so staff are worse off each year
- Pay cut or frozen to save costs
- Fringe benefits cut: health insurance, meals, staff discounts
- Overtime or bonuses removed
The job itself
- Longer or unsocial hours, or a new shift pattern
- More work for the same pay: fewer people on each shift
- Unsafe or unhealthy working conditions
- Job security: redundancies, closures, machines replacing people
How decisions are made
- Changes imposed without asking the people affected (no consultation)
- A management style that gives orders and does not listen
- Poor communication: rumours arrive before the facts
- Unfair treatment in pay, promotion or discipline
A cause, not a reaction: If the bakers refuse to start at 1 a.m., or stop work altogether, that is what the conflict leads to. It is not a source.
Asked for a source, give the cause: the earlier start, the 3% rise against 7% higher prices, the machine that may replace two jobs, the decision made without asking.
At Mill Lane all three kinds are present at once, which is common: a change to the job arrives with a money worry and a decision nobody was asked about. Explaining a source takes two steps.
Explaining a source of conflict
The decision or situation
Say what caused it, from the case: Lena moved the night shift's start from 2 a.m. to 1 a.m. without asking the bakers.
How it harms the group
Say why the bakers see it as unfair: an hour less sleep and family time every night, for no extra pay, decided over their heads.
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The bakers ask Priti to speak for them, and a local officer from the Bakers' Union, a trade union, joins her. They sit down with Lena and Marco. Talks between an employer and the representatives of a whole group of workers, about pay and conditions, are collective bargaining, and most conflict is settled there. This time it is not. After three meetings the bakers want 7% and the 1 a.m. start paid extra; Lena offers 4%. The bakers say they will not start at 1 a.m.
| What a stoppage would cost | Why it matters here | |
|---|---|---|
| Lena's Bakery Ltd | No bread for the three shops or the hotels. The shops sell about 1,500 loaves a day at $3: $4,500 a day before cakes and rolls | Customers try Goldcrust or the supermarket and some never come back; Northgate may cancel the contract |
| The bakers | No pay for the nights they do not work. A baker on $150 a night loses $750 in a week | Some have no savings, so rent and bills fall behind. A 4% rise on $150 is $6 a night: 125 nights, about half a year, to earn the $750 back |
| Both sides | Trust takes longer to rebuild than the bread | The next disagreement starts angrier |
Bring in someone neutral: When talks are stuck, both sides can ask an independent outsider for help, someone who works for neither of them and knows how disputes are settled.
There are two ways to use that person. The difference is one question: who makes the final decision?
Conciliation: the outsider helps
- What happens. A conciliator, Ruth Okafor, meets both sides, together and apart, to find out what each really needs and to suggest ways forward.
- Who decides. Lena and the bakers. Ruth cannot impose anything; the deal is whatever they agree.
- At Mill Lane. Ruth finds the bakers care more about the 1 a.m. start than the pay. Lena agrees $2 an hour extra before 2 a.m. and a 5% rise; the bakers accept.
Arbitration: the outsider decides
- What happens. Both sides put their arguments and evidence to an arbitrator, who then makes a decision.
- Who decides. The arbitrator. Both sides agree in advance to accept the decision, which is usually binding for an agreed time.
- At Mill Lane. The arbitrator hears Lena's costs and the bakers' living costs and awards 5.5%, the start at 1 a.m. and no extra pay for the hour. Both must accept it.
Which one, and when: Conciliation is quick and cheap, and both sides keep control, so the deal is one they chose and are more likely to keep. But it only works if they are willing to move; if they are far apart it can simply fail.
Arbitration ends the dispute for certain. But both sides give up control, and the side that loses may resent a decision made by a stranger, which can store up the next conflict. Many disputes try conciliation first and go to arbitration only if it fails.
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"Nobody asked us": The deal at Mill Lane is done, but Lena keeps thinking about Tom's words. Half of the dispute was not about money. It was about finding out about the 1 a.m. start from a notice on the wall.
Settling a conflict after it breaks out is one job. Stopping the next one before it starts is another.
Involving employees in the decisions that affect them is employee participation. It ranges from being asked before a change is made to deciding together with the owners. At the far end, where employees share in the company's highest decisions, it is called industrial democracy: in its fullest form, employees elect some of the directors who sit on the board (co-determination).
How much of a say?
Told
A notice on the wall: the start moves to 1 a.m. from 1 March. This is information, not participation, and it is how the Mill Lane dispute began.
Asked (participation)
A staff forum of one person from each shop and one from Mill Lane meets Lena monthly. Before the dough machine is bought, the bakers are asked how it would change their work.
Deciding together (industrial democracy)
The 22 staff elect Maya, one of the bakers, to join Lena and Marco at directors' meetings, with a vote on decisions such as the new machine.
What it gains
- Fewer surprises: changes are discussed before they land, so fewer disputes start
- Better decisions: bakers know things about the night shift the directors do not
- Staff who feel trusted, which helps motivation and keeps people
What it costs
- Time: meetings, and slower decisions
- Owners share control, and some plans become harder to push through
- Private information, such as costs, must be shared with staff
When it helps most
- Before a change, not in the middle of a row
- When managers are willing to listen and act on what they hear
- When the representatives are trusted by the staff who chose them
Prevention, not a quick cure: Participation and industrial democracy mostly prevent the next conflict. They build trust over months, so they are unlikely to settle a pay dispute that is already under way.
In a dispute that has already broken out, pair them with a way to settle it now: conciliation or arbitration.
Three unions, three sets of talks: Goldcrust plc, the national chain with 400 bakeries, has about 6,000 staff, 4,000 of them bakers. Until last year they belonged to three different unions, and Goldcrust bargained with each separately.
Every year went the same way: one union won 4%, so the other two demanded 5% to beat it, and pay talks ran from January to June.
Goldcrust's answer was a single-union agreement: management and staff agree that all the workers at the company, or at one site, belong to the same union. Goldcrust now bargains with one union, the Bakers' Union, for everyone.
What Goldcrust gains
- One set of talks. Faster and cheaper to reach a deal for all 6,000 staff.
- No rivalry between unions. No union demanding more to beat another's deal.
- One clear voice. Managers know who speaks for the staff, which helps consultation too.
What it risks
- A united workforce. With three unions, a stoppage by one closed a few bakeries. Now one vote can close all 400.
- One relationship. If it breaks down, or the union will not move, there is nobody else to talk to.
- Some staff left out. Drivers who liked their old union may feel nobody speaks for them, and morale falls.
At the next pay round Goldcrust offers the union a deal: 4% a year for two years, the plan to cut paid breaks dropped, and any future dispute settled by an arbitrator, if the union signs a no-strike agreement. That is a promise, written into the collective bargaining deal, that its members will not strike or take other industrial action for a set time, usually as long as the deal lasts. How should the staff decide? One way is force field analysis: list the forces pushing for the change (driving forces) and against it (restraining forces), score each from 1 (weak) to 5 (strong), and compare the totals.
| Force | For or against signing | Strength |
|---|---|---|
| 4% a year guaranteed for two years | Driving | 4 |
| The cut to paid breaks is dropped | Driving | 3 |
| Disputes go to an arbitrator, so nobody loses pay in a stoppage | Driving | 3 |
| The staff give up their strongest threat for two years | Restraining | 4 |
| Goldcrust made a record profit: pressing harder might win more | Restraining | 3 |
| If prices rise faster than 4%, pay falls behind with no way to push back | Restraining | 2 |
| Total | Driving 10, restraining 9 | Close: the deal is worth signing, only just |
The scores are a judgement: The strengths are opinions. A member who expects prices to rise 8% would score the last force 5, and the answer flips.
So the totals are only the start. Say which force matters most and what it depends on: here, whether the arbitrator is truly independent, and what prices do over the next two years.
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How this comes up: The long question gives you a dispute and asks you to discuss two possible approaches to conflict resolution a manager could use, using the information and often a table, for ten marks. A second long form asks whether employees should sign a no-strike agreement and go into collective bargaining, using force field analysis.
Shorter ones: explain one impact of a strike on the business, or on its employees, for two marks; explain two disadvantages of a single-union agreement, or two sources of conflict, for four.
The ten-mark pattern
- Approach one, named and explained. What it is, in a sentence.
- For and against it, in the case. Use the numbers: how far apart the two sides are, what a stoppage would cost, what the staff survey says.
- Approach two, the same way. Choose one that works differently: an outsider who helps against one who decides, or settling now against preventing the next dispute.
- A judgement. Which should come first, and why? Say what it depends on.
- A limitation of the information. What the case does not tell you that would change your view.
Two traps: One approach, or one side. Two approaches, each with a point for and a point against, make a balanced answer. One approach, however well argued, cannot be.
A threat is not a resolution. Threatening job cuts, or refusing to work, raises the conflict. The approaches that resolve it are conciliation, arbitration, employee participation, industrial democracy, and no-strike and single-union agreements.
Using the information above, discuss two possible approaches to conflict resolution that Lena could use at Mill Lane.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.