The Role of State in Employment Relations

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The Role of State in Employment Relations Free Essay

The relationship between an employer and employees has been a subject of debate among various scholars. It is commonly understood that employers and employees are the only parties that interact in employment relations. However, the state is a third player largely involved in protecting the interests of workers. Besides economic, political and judicial roles, the government has an obligation to protect the employment and wages of its citizens. Overall, the role of the state is difficult to define since it involves more than a single actor, and many government departments and institutions can impact employment relations in various ways. The government’s involvement in employment relations is largely directed at the social and economic gains it seeks to accomplish as well as to maintain its political ideology regarding the development of society. The current paper examines the necessity and degree of the state intervention in employment relations activities, which has become extremely essential in today’s competitive environment, and explains that such issues cannot be left to employers and their associations, employees and trade unions.

The Role of the State in Employment Relations Systems

The industrialization and expansion of businesses have encouraged the state to increase its involvement in employment relation systems because such interventions help the government in the economic growth of the nation. In fact, the state involvement in employment relations is difficult to assess because it encompasses many actors, government departments and institutions. Nevertheless, its participation largely influences employers’ relations with employees and unions. For instance, the police and army deployment during strikes and protests as well as the local court’s judgments have changed the relationships between employers, unions and workers (Hyman, 2008). The state also confers considerable powers on its institutions such as employment tribunals and Low Pay Commission to protect the workers’ salary and wages rights. Given the degree of political power and influence, the earliest characterization of the state explained it as “all government department and systems that possess a monopoly on the legal use of force” (Deakin & Wilkinson, 2005, p.5).  However, these days more specific definitions have been utilized in the development of employment relations. Thus, the government actively involves employers, unions and workers in formulating labor laws and policies, which can serve interests of all stakeholders (Deakin & Wilkinson, 2005). The pace of state interventions has increased greatly during the last three decades and  its further involvement during the new millennium have changed the employment relations systems in the UK even more. As a result, individual employment laws, instead of voluntary collective bargaining agreements, govern working conditions in Britain, having led to huge influence on the behaviour of employers, trade unions and workers (Smith, 2009).

The Impact of State Intervention on Employment Relations

The main objectives of the state in maintaining employment relations are creating high levels of employment, ensuring price stability, protecting the rate of exchange and maintaining a system of balance of payment. For the achievement of these objectives, the state intervenes in employment relations that impact employers’ relationship with employees.

The state interventions in employment relations are not only meant to achieve economic and social ends but also are an expression of the political ideology regarding the desirable formation of society. The impact of state involvement has enhanced the relationship between employers and employees, which was extremely poor before World War II. Furthermore, this impact has forced employers to provide essential benefits and compensation to employees, for example, equal pay for equal work, and in turn, it has increased productivity of the organization (Deakin, Fenwick, & Sarkar, 2014). In addition, in the UK there has been an alliance between the Labour Party and the trade unions, which at one time recognized themselves as two separate wings (political and industrial wing) of the working class movement (Hyman, 2008).  Hence, industrial wing, organized labour and unions have an impact and a voice in designing labour party policies. Although the earlier labour government was viewed as more pro-business than labour administrations, its policies impacted employment relations and legislation. For instance, it sought to encourage a culture of partnership and competiveness that was established by a set of legal rights for employees (Kenner, 2009).

The Scope of State Intervention

Hyman (2008) studies many debates regarding political and government influences that shape employment relations. While many of these prevail in most economies, the degree of intervention largely depends on prevailing political atmosphere of a present government. The state intervenes through various methods. For example, the state may involve as an employer, a regulator of prices and incomes, an economic manager. Moreover, the state may act as advocacy for employment standards as well as a legislator, law-maker and a promoter of social rights (Hyman, 2008).

In fact, unitarism defines that the state is an integrated body having harmonious system in which employers, employees and unions have common interests and goals. In brief, the state protects the rights of workers, unions and employers and acts as negotiator for prosperity of the nation (Stone & Arthurs, 2013). The principle of the state as a responsible employer also led to encouragement for trade union membership in the private/public sector, which is perhaps the prime reason of the expansion of union membership. Hence, it has remained successful among many private sector workers including areas of the civil service, education, SMEs and the National Health Service (Stone & Arthurs, 2013).

The second way of the state intervention in employment relations is by demonstrating its role as an income regulator. After the end of World War II, the state governments have realized a need to control prices, salary and wages increase with an objective to regulate inflation. For instance, in the 1970s the labour government held consultations with unions and employers to design acceptable income policies that could protect workers’ interests (Lewis&Sargeant, 2015).

The third method of state intervention is by acting as the economic managerof the nation. As an approach to intervention, it focuses on state’s macro-economic policies with regard to money supply, fiscal regulations and aggregate demand, which can impact the utilisation of human power and the operation of the labour market. For instance, by offering return-to-work incentives and through employment exchanges, it is possible to help people seeking employment and those companies that have new employment opportunities to offer. Thus, through this approach, the state has implemented steps to promote labour mobility, for instance, by offering training to solve skills shortages in the country (Sadevirta, 2015).

 Moreover, the state follows a philosophy of pluralism in which organizations consist of different ethnic groups, races, religions having varying goals and interests and conflict in these groups is inevitable due to competing interests. The trade unions represent legal rights of workers, and the state plays an important role between employers, employees and unions (De Stefano, 2014).  Hence, the fourth significant role is the state as a defenderof minimum standards in employment for building a pluralist society.  For instance, the Employment of Young Persons and Women Act established necessary standards on safety and health. During the 1970s a protective legislation was enforced to protect workers against sex and race discrimination, equal pay and unfair dismissal. The state signaled employers that they were not to discriminate workers on the basis of religion and cultural background and played an important role between employers, employees and unions (De Stefano, 2014).

Finally, the essential approach to intervention in employment relations is state’s role as a legislator and policy-maker. This method demands direct enforcement of legislation, and the law defines three prime functions. First, it has a supportingfunction, which promotes employment relations by defining sanctions that can be used against those who defy the legislation. An example is the Codes of Practice administered by ACAS, which encourages good employment procedures and practices. The organizations that fail to implement Codes of Practice can be summoned to the court of law. Besides, the restrictive function of the law prohibits certain practices, for example, racial discrimination, child labour and religious background in employment. Third, regulative function permits the state to establish minimum standards for workers, for instance, the minimum wage Act and equal payment for the same work (Fagernas, 2010).

The Changing Aspects of State Intervention

The common belief in the UK was that employers and workers were the best judges to decide the level of their relationship. Therefore, the state avoided direct interference in employment relations. Nevertheless, this approach does not imply that the state completely excluded interventionist policies. Instead, it decided on the degree of the employment relationship, which was suitable for intervention (Deakin, Malmberg, &Sarkar, 2014).

Overall, full corporatism has never been seen in the history of UK. Corporatism defines a state as one, which is associated with authoritarian regimes. Thus, if unions are permitted to function, they can become a significant player in the state machinery (Berg & Belman (2005).According to Berg and Belman (2005), corporatism is an ideology in which the state coordinates with employers associations and trade unions to develop a national policy on the issues of employment relations. The objective is to achieve national goals instead of satisfying the interests of a particular entity.

After the end of the World War II a further development appeared in employment relations. This was bargained corporatism, in which a variety of interests were revealed in the industry (Block, Berg, & Belman, 2005). While employment relations were viewed as mostly discretional at an organisational level, the state emphasised on planning the future growth of the industry. Hence, tripartite bodies involving employers, the government and trade unions were formed to bring a revolutionary change in employment relations, which refer to radicalism in finding answers through revolutionary means. Thus, the state philosophy remained capitalist, although it established that competing interests were necessary for the employment relationship, and unions were permitted to perform a greater role in employees concerns (Smith, 2009).


The landscape of the UK government in employment relations has changed considerably after the Second World War. The state plays a powerful role in the employment activities considering that intervention is necessary to enhance the relationship between employees and employers and encourage equal participation of trade unions. This initiative has led to the protection of workers’ rights, increased participation of employees in the organizational activities and enhanced productivity. As a law-maker, the state also renders a significant impact on the relationship between employees, employers and trade unions. Indeed, legal interference by the government is continuously unfolding process that has altered the philosophies and political ideology of those who frame labor laws and govern activities of organizations.

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