Employee relations: an introduction

'Employee relations' describes the relationship between employers and employees. Today’s interpretation of employee relations reflects the increasing individualisation of the employment relationship following the rise of individual workplace rights.

Individual voice channels are very important. But collective channels, that use union and/or non-union representatives, give employees a collective voice that can complement and reinforce individual channels. 

Informing and consulting the workforce is a core people management principle. If done well, it provides an effective mechanism for dialogue between management and workers, typically via their elected representatives. This provides senior management with the opportunity to impart important information or plans to the workforce and gain buy-in. For their part, employees can exercise their collective voice, an indirect channel via their representatives, to make suggestions, ask questions or raise concerns. 

Employee relations is an area of specialist knowledge in our Profession Map. It emphasises the importance of making sure the relationship between an organisation and its people is managed through transparent practices and relevant law.

Trade union influence

There has been a transformation in many aspects of UK employment relations over the past 40 years, none more profound than the changed role and influence of trade unions. The declining levels of union membership and density, combined with a huge fall in collective industrial action, are well charted. 

According to May 2023 UK official statistics, trade union membership declined to 6.25 million in 2022 and the proportion of UK employees who were trade union members fell to 22.3%, down from 23.1% in 2021. This is the second successive year in which trade union membership has fallen. Prior to this, it had risen for four consecutive years. 

Despite the longer-term downward trend in membership levels, trade union influence is still an everyday reality for many organisations, particularly in the public sector. CIPD research in 2022 shows that, among those employers with representative arrangements for informing and consulting with staff, 40% reported both union and non-union representation, 39% just non-union representation and 18% cited union representation only.

CIPD research in 2022 shows that employers are mainly positive about the employment relations climate in their organisation, with 87% describing relations between managers and employees as ‘very good’ or ‘good’ and just 3% as ‘poor’ or ‘very poor’.

We asked employers with union representation whether or not they thought the relationship between management and the trade union(s) had changed in their organisation over the past two years. Almost half (46%) said it had remained the same which is a good outcome given the turmoil of this period, such as the cost of living crisis or the pandemic. Almost three in ten (28%) said the relationship is now more positive while just 15% said it was more negative. 

These findings show how employment relations are truly tested during a crisis, and the importance of employers building a positive, problem-solving approach with their employee representatives

A wide range of legal provisions apply in managing employee relations and dealing with problems which may arise. These can broadly be subdivided into those concerning the relationship between employers and individual employees, and those which concern collective relationships.

Individuals

Contract law and the terms of the contract of employment influence individual employee relations. In addition, employers’ handbooks or staff manuals, which as a minimum comply with the Acas Code of Practice on grievance and disciplinary procedures, are important. Handbooks vary but will govern many aspects of employment rights including for example holiday, sickness, parental and other forms of leave, whistleblowing, communications and equal opportunities.

In addition, certain mandatory statutory employment rights apply to supplement the law of contract. These rights affect matters such as dismissal, hours of work, pay conciliation, mediation, and other forms of dispute and discipline handling. Key examples of employment legislation affecting employee relations are the Employment Rights Act 1996 (dealing with the circumstances in which employees can be fairly dismissed) and the Equality Act 2010 (dealing with discrimination and equal pay). 

Collective relationships

The collective dimension includes collective bargaining, information and consultation, arbitration and industrial action. Employers may work with recognised unions to negotiate pay and conditions, or to inform and consult over changes such as redundancies or health and safety. Examples are:

• The Trade Union and Labour Relations (Consolidation) Act 1992 concerning collective bargaining and redundancy consultation
• The Trade Union Act 2016 which contains provisions about ballots, industrial action, and the functions of the Certification Officer responsible for statutory matters relating to trade unions and employers’ associations such as registration and recognition.
• The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) which protect employees affected by business transfers or service provision changes where services are outsourced to a contractor, reassigned to another contractor, or brought back in-house.

CIPD members can find out more in our Trade union recognition and industrial action law Q&As.

Workplace conflict remains a fact of organisational life and needs to be managed positively and proactively. Individual and ‘unorganised conflict’, in the form of sickness absence, bullying or harassment, and employee turnover, can be just as harmful and costly to an organisation as organised industrial action on a collective level.

According to our research on managing conflict in the modern workplace, conflict at work is a ‘common occurrence’ according to a quarter of employees, with one in five employers saying the same. 

Organisations need to develop proactive approaches to managing conflict and ensure that line managers are confident to resolve disagreements at an early stage as part of a problem-solving approach.

Working in partnership 

‘Partnership’ between trade unions and employers is no longer always promoted as a modern employment relations model. But its focus on joint working, collaboration and mutuality still has relevance. 

CIPD research shows almost six in ten (59%) agree that ‘working in partnership with trade unions can benefit the organisation’. Further, almost four in ten (39%) respondents say the purpose of their organisation’s arrangements for representative participation are ‘to support partnership working or collaboration on specific projects’.

Fostering a climate of mutual co-operation with recognised trade unions and employee representatives – whether union or non-union – can complement both individual voice channels and people management practices. Such an approach can also result in benefits for the business as well as for employees.

Over the past two decades, there has been less focus on the role of employee relations as an HR discipline, with employee relations and conflict management typically viewed as operational and transactional in nature.

This view needs to change. Against a backdrop of political and economic change and highly pressurised work environments, there has never been a greater need for the expertise offered by employee relations specialists. The status of the employee relations specialism needs reasserting, and its reach needs broadening so that managing the employment relationship, and conflict, is seen as an integral part of every people professional’s role.

The more traditional, formal employee relations and negotiating skills need to be complemented with a much wider set of competencies, such as consultation, analysing employee attitudes, spotting potential signs of conflict and early resolution of differences between employees and management. These skills need to be extended to line managers who have day-to-day responsibility for managing the employment relationship.

Develop a positive employee relations framework 

It’s important that organisations develop an effective, holistic employee relations framework, for example:

• Set up multiple and complementary mechanisms for employee voice, including direct methods with individuals and indirect methods for collective voice, via employee representation.
• Establish structures and processes for communicating with union and non-union representatives and employees at all levels of the organisation. 
• Have a system to evaluate the feedback, to ensure that people’s feedback is captured and listened to from across the different voice channels.
• Train and guide managers so they understand the organisation’s aims and practices for information and consultation, and have the skills and knowledge to promote effective employee voice.
• Ensure a positive joint working ethos is cascaded throughout the organisation, so that managers at all levels approach working relationships with representatives in a constructive way and build trust.

Contacts

Acas

GOV.UK - If your business faces industrial action

Books and reports

ACAS. (2014) Reframing resolution – managing conflict and resolving individual employment disputes in the contemporary workplace. London: Acas.

AYLOTT, E. (2018) Employee relations: a practical introduction. 2nd ed. HR Fundamentals. London: CIPD and Kogan Page.

BENNETT, T., SAUNDRY, R. and FISHER, V. (2020) Managing employment relations. 7th ed. London: CIPD and Kogan Page.

SAUNDRY, R., FISHER, V. and KINSEY, S. (2019) Managing workplace conflict: The changing role of HR. London: Acas.

SAUNDRY, R. and UNWIN, P. (2021) Estimating the costs of workplace conflict. London: Acas.

Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles

GORDON, L. (2020) The legal consequences of getting employee relations wrong. People Management (online). 10 January.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.