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British Airways Employer and Employee Relations Essay

If you were to think about your last journey on an aircraft, which features would spring to mind? The cramped, overcrowded space? The stuffy air? The smelly toilets? Thankfully, as passengers, we only have to bear these unpleasant idiosyncrasies of aircraft cabins for a relatively short time. Imagine if this was your workplace. As British Airlines (BA) rightly notes, exclusions from health and safety legislation liberate airlines from the rigidities imposed by the employee rights contained in standard health and safety legislation.

However, the extent to which BA and other airlines behave ‘responsibly’ is put into question by a range of literature on the cabin working environment and cabin crew working practices. The cabin environment of aircraft is the place of work for the crew, to whom the airline has a duty of care as an employer. Exclusions from health and safety legislation are a legal technicality. A reasonable and prudent employer would take note of them and apply them in aircraft whenever practically possible, despite the exclusion.

Airways (2000) One of the most important challenges confronting modern airlines is the need to promote economic growth under expanding employee rights. Modern capitalism tends to reduce state or private monopolization and wealth concentration

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by way of privatization, employee ownership, and growing numbers of stockholders. The new electronic communications era and social awareness generate a new economic system with political freedom and participatory industrial democracy on a global scale.

In many market and ex-planned economies, where nationalization of private companies are popular, sales of state-owned assets and government disengagement in general became necessary in recent years. The waves of privatization, profit or revenue sharing, and employee participation in enterprise decision making engulfed almost all multi-national companies. However with this new found power, employees gained voting rights on major corporate issues, but they have been saddled with a company that lacks potential for capital formation, especially in such a large industrial firm in a capital-intensive industry. Read also introduction for online reservation system

Employee involvement and modernization of equipment with new investment revitalized the company and improved efficiency and communications among the nearly 90 participation worker teams and managers. The employee owners contemplate the tender of their shares to the bidder with the higher price and the provision for job security. Each BA employee who stays five years with the company is allocated shares worth a certain percentage of his or her salary. Rights And Responsibilities Of Employees and Employers

Although the words “employer” and “employee” are used in the symbiotic process described here, the meaning of these words as used in the context of knowledge organizations differs from the meaning that was applied to twentieth-century operating or traditional organizations. In knowledge environments, employers and employees are both bedfellows with common interests and with naturally and continuously evolving authorities and responsibilities. Employer rights:

Further noting that the airline industry needs peace and social consensus in order to grow; being committed, therefore, to work in this direction, above all by the example they set; recalling the basic right of each employee to be represented and defended by a union of his or her choice; recognizing the reciprocal legitimacy of the other party and its right to intervene in both social and economic affairs, while both retain their own responsibilities, to the extent that they comply with applicable laws, contracts or collective agreements; are therefore convinced that reinforcing democracy in the group is the duty of both parties and that this implies both the recognition of differences over ways and means as well as the search for solutions through collective bargaining; further note that this goal requires, for its achievement, an effort at educating and informing the employees concerned and their representatives, so that they can better understand the problems, constraints and challenges faced by the company.

In addition to appropriate use of internet, email and employer property the issues of disciplinary and dismissal procedures; contracts of employment i. e. terms and conditions of service, all fall within the realm of the employer/employee work environment. A principal theme of this report is the need for greater acceptance of shared responsibility and more reliance on self-inspection and self-regulation and less on state regulation. This calls for a greater degree of real participation in the process of decision-making at all levels. Employer responsibilities: Employer responsibilities include observance of Employment Act 2002 i. e. changes to maternity rights where ordinary maternity leave increased from 18 to 26 weeks.

Employees with 1 year’s continuous employment are entitled to additional Maternity Leave of a further 26 weeks (unpaid). Changes to paternity rights include the new right to paid paternity leave is in addition to the 13 unpaid weeks’ parental leave entitlement. Introduction of adoption leave and pay allow an employee who has had a child placed with them for adoption is entitled to ordinary adoption leave and additional adoption leave at the same level as for statutory maternity leave. Compulsory grievance and disciplinary procedures these apply to all employers. Small employers are no longer exempt. New flexible working provisions and regulations apply to parents, adopters, guardians or foster parents of children aged under the age of six.

Remunerating and employing employees to contract, above minimum pay levels; exercising duty of care for employee welfare; providing a safe and healthy workplace; provision of public liability insurance; provision of appropriate training and protective clothing and equipment; provision of grievance procedures. The Rights And Responsibilities Of Employees: Over all employees must work according to the contract. They must support the aims of the employer; expecting employees to support health and safety in the workplace. The symbiosis model for knowledge organizations is designed to emulate symbiotic relationships in organizations aiming to achieve high levels of innovation and productivity essential for success.

This model gives new definitions to the traditional roles of employers (or employers’ agents/substitutes/managers) and employees, such that the lines between these roles thin and gradually fade away and evolve into a relationship that suits the innovative function of a knowledge organization. It gives employees the confidence to map, control, and, ideally, eliminate their environment. This model of relationship becomes systemic, and the main factor determining the boundaries on one’s behavior and performance in the organization is the employee himself or herself. All others, including the employer, become non-factors. Subsequently, everyone in the system becomes a contributor in shared relationship.

A knowledge organization has to design work and develop an environment in which every employee is equipped to contribute to this pool. A knowledge organization manager can achieve this result by reversing the work segregation policies of operating or traditional organizations that typically have assigned operating responsibilities to one group of employees and creativity to the other. It can be accomplished through increased mingling of the functions across the transformation cycle. More managers, engineers, scientists, and even salespersons in knowledge organizations should be assigned responsibilities for regular line functions that in traditional organizations are set aside for supervisors and linemen.

Similarly, knowledge organizations should engage in a reversal of jobs. Contracts Of Employment The allocation of clear lines of responsibility, the effectiveness of monitoring adequate safety and health procedures and the scope of coverage of employees are made increasingly difficult by the elastic nature of contemporary definitions of ‘the workplace’. The ubiquity of subcontracting, fixed-term contracts and temporary ‘agency’ workers makes it equally difficult to identify an organisation’s ‘workforce’. A key problem is the lack of inclusive regulations that identify the locus of legal responsibility for proper procedures of safety management within complex patterns of contractual agreements.

The high priority placed on minimizing employee/employer failures brings together the combined forces and influences of comprehensive legislation, empowered and invigorated enforcement agency activities and proactive employer and employee attitudes towards the shared working environment (albeit this occurs at varying degrees in different departments). In addition, a heavy reliance on employee input into the day-to-day management of workplace safety appears to be highly valued. Combined, all of these elements provide a possible framework for a paradigm for ‘good management and employee practice’ (and ‘safety culture’). However, the literature suggests that there is some distance between policy and practice in the international nuclear community.

Additionally British Airways has gone for twenty-four-hour, global e-Service provision e. g. online and telephone ticket purchase services as for many major airlines as one way of dealing with such shortages and providing a round-the-clock service, aided by Internet technology. However, though the demands of managing a local work force can be great, they are likely to be much greater for a global work force, though the potential rewards of capitalizing on the range of expertise of a global work force are high. Behaviors to Learn Our research indicates that of the behaviors we consider critical for growth today, leaders are least proficient at those related to mobilizing people.

The old leadership paradigm called for a loner/leader, a Gandhi-type who autonomously developed goals, persuaded others to share them, took huge personal risks, achieved the goals, and then walked off into the sunset. Virtually No One Can Achieve Business Success That Way Today. In retrospect it was found that effective leadership has less to do with individualism than with the ability to build and maintain relationships across the organization. Consider the behavior of Sir Colin Marshall, chairman of British Airways, after some British Airways staff members obtained internal data on competitor Virgin Atlantic and used it to lure some of Virgin’s customers away. Virgin sued, and British Airways lost. For certain this event greatly discomforted the airways.

It demonstrated that the lawsuit’s impact on every British Airways employee. Employee Relations Describe Key Features Of Employer And Employee Relations, Highlighted In A British Airways Dispute. British Airways versus the Transport Union: who will alter course first? The union, probably will. British Airways is one tough airline. It became famous in the 1980s for improving efficiency through a scouring of its staff and executives, a policy initiated by Lord (John) King after he took over in 1981 to prepare it for privatization. It became infamous for its dirty tricks in the latter part of the 1980s, which were exposed and for which it was punished in the courts.

Now it has confronted employees contemplating strike action with a battery of threats, some of them unprecedented in this country. Establishing employee relations: Negotiators for British Airways and the Machinists entered into a 4-year collective bargaining agreement that guarantees job security for the life of the contract. The agreement covers about 1,400 airline workers (reservation clerks, passenger service agents, telecommunications workers, and mechanics) based in the United States. The prior contract expired in June 1987. The efficiency drive initiated by King has worked. BA is now the leader among European airlines in terms of efficiency and among the best in service.

Industry insiders say only the much smaller Dutch KLM and the German Lufthansa match it. The scale of its achievement still has to be matched by carriers such as Air France, Alitalia and Iberia. Its dominance of the Heathrow terminals gives it hegemony over the world’s great transit point. It is consistently profitable and one of the clearest case studies of the success of privatization; as such, BA is constantly used as an advertisement for a revitalized, successful Britain. The pact called for general wage increases of 5 percent retroactive to January 1, 1990, 4 percent on December 31, 1990, 4. 5 percent on January 6, 1992, and 5 percent on January 4, 1993.

In addition, employees will receive lump-sum payments equal to 6. 5 percent of gross earnings for 1988 and 4. 5 percent of gross earnings for 1989. Other terms included elimination of the two-tier wage system; expanded use of part-time employees (from 20 percent of the work force to 36 percent over the term of the contract), with an annual incentive payment of $650 to full-time employees and $325 to part-time employees when the part-time expansion goals are met; a one-time payment of $2,000 to employees who qualify as customer service representatives, $1,200 to cargo customer representatives, and $1,000 to baggage service and departure control representatives; 45 cents to $1.

25 an hour premium for various reservations classifications; enhanced medical benefits, including a $500,000 increase (to $1 million) in the lifetime maximum, vision care for dependents, and health benefits for part-time employees equivalent to single coverage for full timers, with optional dependent medical coverage at the employees’ expense; and improvements in dental care, life insurance coverage, long-term disability benefits, pensions, and the 401(k) plan. Analyse The Root Causes Of Disagreement Over Employee Relations Dispute At British Airways – The BA Cabin Crew Dispute The origins of the dispute are located in a new deal for cabin crew pay and working conditions.

The deal was part of BA’s ‘Business Efficiency Plan’, which sought to cut costs by ? 1 billion per year. BA stated that ? 42 million of this would come from reductions to cabin crew costs (Herald, 10 July 1997). While basic pay would be increased, overtime and other allowances would be cut, duty times extended, turnaround times reduced, and new employees would start at lower rates of pay. Cabin crew estimated that they would lose thousands of pounds a year and would be working up to twenty-eight extra days a year for no extra pay. Adding insult to injury, the new-entrant cabin crew pay was slashed from ? 11,000 to ? 8,000 per year – a 20per cent reduction – making BA cabin crew the cheapest in Europe (ITF News, 8 July 1997).

Despite the fact that the majority of BA cabin crews are represented by the Transport and General Workers’ Union/British Airlines Stewards and Stewardesses Association (TGWU/BASSA) (around 9,000 of BA’s 12,000 cabin crew), the company in the first instance approached and reached agreement on these new conditions with a much smaller union – Cabin Crew 89. This faction broke away from the TGWU in 1989 with, it has been proposed, the active encouragement of BA management. It is alleged that Robert Ayling helped set up Cabin Crew 89 when he was BA’s Human Resources Director ‘with the express intention of encouraging the kind of split in the BA workforce that led to the formation of the Union of Democratic Mineworkers which defied the 1984 miners strike’ (Independent, 26July 1997). Following the agreement of Cabin Crew 89, the company then attempted to impose this deal on all cabin crew staff. The TGWU refused to accept this imposition and balloted its members on industrial action.

The extensive resort to, and continued effectiveness of, traditional forms of union activity evidenced in the global survey and directed towards national air- lines, institutions and states is hardly surprising. Even global carriers have a ‘home base’ and all airlines are vulnerable to strike action. 4 Moreover, even in a deregulated product market, global airlines are still dependent on the regulatory support of national governments (for example, to protect established ‘rights’ to airport slots). Not surprisingly, civil aviation unions continue to favour national regulatory policies such as union recognition and collective bargaining, national (the airline’s reputation for reliability and customer loyalty may be severely damaged). The 1997 BA cabin crew dispute, for example, was estimated to have cost the airline ? 125 million in lost revenue.

Based on these solid organisational foundations, civil aviation unions have been able to develop novel, and in many instances effective, international repertoires. The 1997 BA cabin crew dispute is a case in point (Blyton et al. , 1998c), with action organised against BA services around the globe. In fact, the transnational structure of the civil aviation industry, combined with the homogeneity of work and conditions of employment, and more importantly the increasing tendency of (global) airlines to ‘benchmark’ and export conditions from one carrier to the next, has created both an awareness and an incentive for labour to combine across borders.

Many of these developments in airline employment relations are crystallized in the strike by British Airways’ cabin crews in July 1997. While the crux of the dispute was over pay cuts and extended working hours, the related OHS implications of longer working hours on cabin crew health and safety were of considerable concern to union officials. BA’s handling of the cabin crew dispute demonstrated the airline’s readiness to abandon any people-centred HRM (and OHS) policy when it comes down to profit and survival. In addition, this example demonstrates the political basis of health and safety where assumptions pertaining to ‘consensus’ are quickly swept away.

The BA cabin crew dispute also highlights the internationalisation potential of labour disputes as waves of support for the BA crew spread across the globe, offering some promise for future international solidarity against the range of OHS risks in aircraft cabins. Let us review some of the airline’s machinations. The difference in degree of disruptive power held by the two groups is suggested by several aspects. First, there is the general point that the pilots achieved significant concessions from management by simply threatening industrial action, whereas cabin crew were required to actually engage in strike action in order to gain concessions from management. Further, the presence of the minority Cabin Crew 89 union, whose members continued to work during the strike, reduced the degree of overall solidarity displayed by those cabin crew taking action.

In addition, while management were faced with no alternative but to concede to the pilots’ demand when faced with industrial action, in the cabin crew dispute, alternative courses of action that were pursued not only included management undertaking cabin crew duties, but also formulating contingency plans to train an alternative cabin crew workforce should the strike persist. What the survey and particularly the more detailed case evidence also revealed was an ability by both cabin crew and pilots to contest management’s restructuring objectives, partly via in one case threatened industrial action, and in the other, actual strike action. However, what the study also demonstrated was a much greater ability among one of the groups, the pilots, to successfully contest management’s restructuring agenda. However, what the study also demonstrated was a much greater ability among one of the groups, the pilots, to successfully contest management’s restructuring agenda.

Their stronger labour market position gave the pilots an occupational power far in excess of that of the cabin crew. A differential also existed in the respective disruptive power of the two groups, reflected by one being able to secure major concessions from management through the threat of industrial action, while for the other actual strike action was required and even then management ultimately secured much (though not all) of its restructuring agenda. Even though cabin crew gained some additional power from international supportive action, this was insufficient to provide it with a degree of leverage to enable them to wrest the level of concessions from management that pilots were able to secure.

The concept of cost escapability has been applied to British Airways, whose cost structure is fairly typical for a major international airline with a well-developed short-, medium- and long-haul network. Using published operating cost data for the financial year April 1999 to March 2000, it proved possible to break down British Airways’ costs in the way suggested earlier. The breakdown is shown in greater detail in Figure 4. 2. It is clear that in 1999-2000 more than a third of BA’s total operating costs, or 40 per cent, were immediately escapable. Just over a quarter of costs, 27 per cent, were fixed direct operating costs and a further third or so, 33 per cent, were indirect operating costs. Clearly, variable costs are significant.

By canceling a scheduled flight one may save up to 40 per cent of total costs but in the short run not much more. The working class is in the midst of change: its composition is becoming more diverse in most places, as women and immigrants compose a larger proportion of the workforce, and its organizations are in flux—some still declining, some growing, and everywhere changing. The rebellion is international in scope, but it is taking place mostly on national terrain. The need to create unity in action across racial, ethnic, and gender lines within the nation and across borders and seas is more apparent than ever though the difficulty of doing so is still daunting.

In July this year, the success of the British Airways staff in halting the management attempt to cut the wages of cabin crew and to hive off catering demonstrated the imaginative militancy that can be displayed by workers relatively new to trade unionism; their success also demonstrated the new ability of trade unions to win public support in confrontations with macho management. The implications of these identified links are significant for British Airways as they illustrate that, while many of the theories held by the airline’s management were correct, there are significant issues associated with the implementation of the firm’s operations strategy. British Airways has traditionally focused on ensuring that planes depart on time.

This makes sense as planes are extremely expensive assets and hence managing their utilization is essential. Yet British Airways’ data suggest that when planes depart late, customers tend to report that cabin crew service is better, and when customers report that cabin crew service is better, higher levels of customer satisfaction also tend to be reported. If correct, then this observation suggests that implementing an operations strategy that focuses on ensuring planes depart on time may not be the right thing for British Airways to do, at this point in time, especially as the airline is trying to differentiate itself through superior service.

Of course, this does not mean that the airline should ensure planes depart late. Nor does it mean that all late departures are good. A 30 minute delay on a London to Paris flight is far more significant than a 30 minute delay on a London to New York flight. Instead the key issue the analysis raises for the airline’s management is how can the airline ensures that the behaviors the customers appear to value, that come into play when planes leave late, are enacted on every flight. In essence this is the real power of using measurement to challenge strategy, as it forces management team’s to question their theory about how their business runs. Employment relations:

But its success had a darker side. It conducted a series of dirty tricks against the fledgling Virgin airline in the 1980s and 1990s, culminating in the humiliation of an admission of disreputable behaviour in the High Court in 1992. BA paid [pounds]610,000 to Richard Branson and to Virgin, and [pounds]4. 5 million in legal costs to be free of the action, and agreed to an apology that exculpated its own senior executives – Lord King, the chairman, Sir Colin Marshall, chief executive and Robert Ayling, then head of marketing – in favour of blaming its then public relations consultant, Brian Basham, and implicitly its PR director, David Burnside.

Basham was later granted an injunction against a book which documents the affair, Martyn Gregory’s Dirty Tricks, while the case, which Basham won in the high court, goes to appeal. The cabin crew was a yet more difficult case. Unlike the catering staff they have no precise dispute. Their numbers will slightly increase rather than be cut and though BA has pressed for [pounds]5 million savings in cabin services between now and the year 2000, it is seeking to upgrade their skills and make them less mere servers of drinks and sellers of cigarettes. Salary and wages systems: In the big picture over time, two opposing sides (union and management) dug in, BA was the stronger party.

Though it has lost sympathy in the media for its tough tactics, it seems to be securing a reluctant and coerced loyalty, and has anyway been indifferent to accusations of rough dealing in the past 17 years. The government, which earlier this week said the dispute had to be “sorted out by those concerned”, is unlikely to declare itself as taking either side, or if it does, it will be discreetly on the side of a corporation that has successfully promoted itself as a national asset striving to modernise, rather than as a doubtful ally struggling to control a shrinking part of the workforce. Evaluate The Main Arguments Presented By Each Side In A British Airways Industrial Relations Dispute. Ever so timely, a genuine industrial relations dispute at British Airways has occurred to supplement our paper.

The unions have realised that the all-out strikes of the 1970s and 1980s caused immeasurable damage, still feeding tabloid depictions of the trade union movement. The winter of discontent and the miners’ strike pitted the interests of the public against those of the strikers. There is an almost direct correlation between the unpopularity of trade unions and the number of days lost in strikes. Unions now understand that, if they do mount strikes, the action must move seamlessly from the picket line to the photo opportunity. The British Airways cabin crew strike — which began the sharp decline in the company’s share price — is cited with awe by many union apparatchiks.

The Transport and General Workers’ Union (TGU) promoted air stewardesses, photographed in their uniforms, as the least likely militants in industrial iconography. Currently the dispute is over sickness absence, pay and staffing at the airline and both sides want to reach an agreement to avoid a 48-hour walkout on Tuesday 30 January and Wednesday 31 January, 2007. Each side has been arguing that the other is being unreasonable in the dispute over pay and sick leave. British Airways position is it wants customers to have sufficient warning of its contingency plans for the strike days, to give them enough time to make alternative travel arrangements.

BA was paying cash “sweeteners” to tempt staff to break any potential strike, however BA reported any money is simply expenses to cover taxi journeys made by non-union staff who will work during the strike and want to avoid picket lines. Out of the airline’s 14,000 cabin crew, about 11,000 are members of the T&G – 96% of whom voted for strike action. The union complained that a new regime on sickness pay, introduced 18 months ago, means they are forced to work when they are ill. Current rank and file still take an average of 12 days sick leave each year – down from 22 days before the new rules were brought in. Starter pay rates for crew members overall pay grading and promotion opportunities are also subject to dispute, with the union unhappy that the starting wage for staff is ? 10,000.

The union is also seeking the introduction of a single pay arrangement for cabin crew staff, rather than the existing two tier system, with staff hired after 1997 being paid less than those employed before that date. For many airline workers, the deterioration in their pay in recent years has stemmed directly from nominal wage reductions or pay freezes (reported in the survey by 42 per cent of all unions), the withdrawal of cost of living agreements or allowances (COLAs) (experienced by 30 per cent of the sample), or the introduction of two-tier wage rates with a lower second-tier rate (typically for new recruits) and much slower salary progression.

Global carriers, who benchmark against other global carriers as well as against low-cost new entrants, were far more likely to have introduced a wage reduction/freeze or to have withdrawn COLAs, and it was the global carriers who were most likely to have introduced two-tier wage rates. Unions with members working for global airlines were somewhat more likely to report adverse effects from restructuring on all the various dimensions of work. Likewise, cabin crew were more likely to have experienced an intensification of work, declining job security and job satisfaction, and a deterioration in management-labour relations, earnings and hours of work. The more important issue is the longer-term ability of many airlines to deliver high-quality services from committed and motivated staff.

It is clear that intensity and job-related stress can have a damaging effect on both quality and safety standards, while job insecurity and declining job satisfaction lie at the heart of poor morale, a lack of commitment and low productivity in many organizations. However increases in working hours were reported by the vast majority of the unions representing cabin crew, compared to fewer ground handling and maintenance. The experience of BA in the latter years of the 1990s illustrates these problems. Data from BA’ own employee satisfaction and customer satisfaction surveys reveal that a 1 percentage point decline in the former translates into a 0. 24 per cent decline in the latter.

Job satisfaction fell steadily following the company’ announcement of its cost-cutting Business Efficiency Programme and the subsequent cabin crew strike of 1997. Over all these developments appear to have had a particularly adverse effect on cabin crew, whose unions were far more likely than those representing other groups to report longer shifts and, as a result, an overall increase in working hours and the company that in finality holds the responsibility to the paying public. Evaluate The Extent To British Airways May Have Adapted Working Arrangements In Order To Accommodate Legislation Relating To Rights And Responsibilities Of Employees And Employers.

During 1992, management and labor negotiators continued to grapple with pressures to reduce or at least stabilize labor costs in the face of stiff foreign competition, the effects of deregulation in the transportation industry, structural and technological changes in many industries, and the spiraling cost of health care. Many companies subcontracted work to nonunion shops, moved plants overseas, to Mexico, or to “right-to-work” States, closed obsolete facilities, reduced staff, and introduced new production methods. As a result, many negotiations focused on how to preserve jobs and keep companies economically viable in a sluggish, changing economy. However, health care costs and benefits continued to be the most common and most contentious bargaining issue.

In some cases, unions traded all or part of a wage increase to avoid a cut in health care benefits or a shift of health insurance costs to their members. In others, they agreed to cost containment provisions, such as increased employee deductibles and coinsurance payments, a second surgeon’s opinion on non-emergency operations, and offering preferred provider and health maintenance organization plans. The airline industry had yet another difficult year due to the weak economic recovery, soaring fuel costs, the continued fallout from deregulation, and an intense fare war that often found carriers moving more passengers for less revenue. During 1992, so

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