Poor Employer & Employee Relations (AQA A Level Business): Revision Note

Reasons for poor employer-employee relations

• Employer-employee relations, or industrial relations, describes the state of the relationship between a business and its workforce

  • When this relationship breaks down, the consequences can be significant

  • It can affect productivity, the business's reputation and its long-term performance

Why employer-employee relations may be poor

Pay disputes

• Employees feel their pay does not fairly reflect their work, fails to keep up with inflation or compares unfavourably with competitors'

• Pay disputes are among the most common triggers for workplace conflict

Poor communication

• Management fails to keep employees informed about decisions that affect them

• This can create uncertainty, cause rumours and lead to mistrust

Lack of consultation

• Employees feel that major decisions, such as restructuring, changes to working conditions or redundancies, are imposed rather than discussed

• This can undermine their sense of respect and create a 'them and us' situation

Job insecurity

• The threat of redundancy, increased use of zero-hours contracts or outsourcing creates anxiety and reduces employee commitment

Unfair treatment

• Perceived favouritism, inconsistent application of workplace policies or discrimination damages trust and morale across the workforce

Excessive workload

• Employees who feel consistently overworked and underappreciated are more likely to be disengaged or leave the business

Weak management

• Poor leadership, lack of recognition and inconsistent decision-making damage the relationship between managers and their teams

Breakdown in trust

• Particularly following broken promises, poor business decisions or high-profile incidents of poor treatment

• Once lost, trust is very difficult to rebuild

Consequences of poor employer-employee relations

• When the relationship between an employer and its workforce breaks down, the effects can spread quickly across the business

  • What begins as a dispute over pay or working conditions can escalate into industrial action, rising absence rates and long-term damage to productivity and reputation

• Conflict leads to disengagement, disengagement leads to higher employee turnover - making it difficult to rebuild a motivated, stable workforce

Industrial action

• Industrial action is collective steps taken by employees to put pressure on an employer

Examples of industrial action

Other consequences of poor employer-employee relations

High absenteeism

• Employees who are disengaged or stressed are more likely to take sick days, increasing costs and disrupting business operations

High staff turnover

• Employees who feel undervalued leave for better workplaces, increasing recruitment and training costs

Low productivity and quality

• Disengaged employees are less focused, make more errors and are less likely to take care with their work

Reputational damage

• Poor employer-employee relations, particularly high-profile disputes or strikes, can damage the business's reputation with customers and investors and can make future recruitment more challenging

Legal disputes

• Unresolved grievances can escalate to employment tribunal claims, which are costly and time-consuming for the business

Customer service deterioration

• Unmotivated or disengaged staff deliver a lower quality of service, which can damage customer loyalty and, potentially, affect revenue

Improving employer-employee relations

• Preventing poor employer-employee relations is far more effective than attempting to repair them once conflict has taken hold

  • Businesses that communicate openly, treat workers fairly and genuinely involve employees are less likely to face disputes in the first place

• Where relations have already deteriorated, a structured and honest approach to rebuilding trust - sometimes with the support of external bodies such as ACAS - can help restore stability and prevent further escalation

Ways to improve employer-employee relations

ACAS (Advisory, Conciliation and Arbitration Service)

• ACAS is an independent public body funded by the government that provides guidance, training and dispute resolution services to employers and employees

• It plays a particularly important role in collective disputes

  • Where the breakdown in relations is between an employer and a trade union ACAS provides a neutral space for negotiation

ACAS functions

• ACAS conciliation must be attempted before employment tribunals can be pursued