Labour Relations in the Balance

Dear Readers:

We seem to have inherited an adversarial system of labour relations in Barbados. This system relies on each side pursuing their own interests, with a view that if each side pushes hard enough, then an acceptable equilibrium can be reached.

This approach may appear to work during employer negotiations with labour unions. However, such adversarial behaviour can cost the company in low productivity from employees, who can be severely de-motivated from the stresses associated with the spectacle of having their employer berated as their enemy by their union representatives.

Employers provide persons with opportunities to financially support their families, and some provide training for further advancement in the company. These and other actions can build an environment of trust, which translates to commitment and high productivity within the company. Convincing employees that such employers are not acting in their best interests can destroy the hard earned trust, and spawn a negative attitude to work, which can be manifested in undisciplined behaviour and reduced levels of productivity. If the low levels of productivity are sustained, then they can lead to redundancies and ultimately to a closure of the company. Unions do not represent the unemployed.

After the labour negotiations have been concluded, a joint press conference is typically held where both sides declare an amicable settlement. It is a fallacy to believe that this is all that is required to overcome the distrust that was planted in the minds of employees as a negotiation strategy. There has to be a better way.

Ideally there should be no need for labour unions. Employers should simply accept their responsibility to adequately remunerate employees, without employees having to agitate for it. Where profits are directly related to the labour resources, then the employees’ productivity should be rewarded with a fair share of the profits.

Due to a history of employers generally giving precedence to profit making, over paying fair wages and providing healthy conditions of employment, labour unions have become necessary bargaining agents to represent employees’ interests.

The stage is set for conflict when neither employer nor union representative shares the same vision. However, both sides should share a common vision of reaching an agreement on what is sustainable for the company, even if this means temporarily accepting lower than expected wages or lower than projected profits. For out of the company, the employer, including company shareholders, receives profits as a reward for risking their investment, and the employees receive a safe working environment, job security and wages as compensation for their labour. Therefore the desire for maximum profits among employers, and maximum wages among unions must be suppressed, and they should aim for profits and wages that the company can sustain.

When the employer is the government, labour relations are similarly adversarial. However, determining what is sustainable is much more complex due to the different practices employed between managing a company and managing the national economy. To manage a company profitably, the company must consistently earn more than it spends. It sometimes becomes necessary for properly managed companies to spend more that they earn. However, these times are restricted to crisis situations. If a company is required to consistently spend more than it earns, whether to pay wages or otherwise, then such spending is unsustainable and the company will eventually run into financial difficulty. Thereafter there will be no wages, no employment, and no profit.

Various governments around the world seem to have developed an economic tradition of intentionally planning to spend more than they earn, even during years of economic growth. This phenomena is called running a deficit, and it is one reason why taxes become burdensome. It typically leads to a cycle of borrowing, which destines such countries to exist in the economically vulnerable state of perpetual debt.

Sometimes external pressures force such governments to reduce their deficits, or the amount of their overspending, to manageable levels. However, even those experiences do not appear to convince such governments of the need to depart from the unsustainable economic tradition of overspending.

It is therefore challenging for government employees and their labour union representatives to determine what constitutes sustainable wage levels. However, such wage levels need to be sustainable for all of our sakes.

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