Representatives and Employment Rights Disputes: What Works and What Doesn’t?

Introduction

A range of parties can become involved in grievances. These include internal parties such as Human Resources (HR) staff and other managers, as well as external parties such as local and national union staff, lawyers, and private advocates who function as representatives. With the decline of trade union density and restrictions on union access, non-union representatives now constitute an increasingly significant element of grievance processes. External representatives typically enter a dispute when there are problems in the employee–employer relationship and attempts at direct resolution between those sides have stalled or failed. The influence of representatives can be significant, either moving towards restoration of the employment relationship, or escalating the dispute and transforming it into an adversarial, power-based conflict that adversely affects the relationship. This influence, however, is often little recognized and while reports note the high frequency of representatives’ presence in disputes, there has been only limited research into the dynamics surrounding representatives’ involvement.

The purpose of this research is to explore the factors that influence the progression of grievances from their initial emergence within the organization through to their eventual outcomes. The study followed a set of 14 significant disputes where, despite their protracted nature, employment was still ongoing. These disputes were significant in that they had not been resolved within the organizations and, hence, had moved on to external mediation. Our focus, however, is on what occurred in the workplace interactions rather than in the context of mediation. The findings highlight the influence of representatives, identifying the nature of their involvement and the key factors that determine whether their involvement serves to either restore employment relationships or promote their demise.

The Changing Context of Grievances and Dispute Resolution

The New Zealand employment relations context has shifted from a highly regulated, centralized system to a deregulated, market-driven model (Folger et al., 2005; Lansbury et al., 2007). Grievance provisions have evolved over recent decades and this has been accompanied by significant increases in claim volumes, with numbers more than doubling during the 1990s, mirroring the increase seen in other jurisdictions (Burgess et al., 2001; Lipsky et al., 2003: 54). This initial rise in claims has been attributed to the shifting ideological basis of the New Zealand legislation, which has diminished the role of unions and individualized the employment relationship (Cullinane and Donald, 2000).

In New Zealand, the Employment Relations Act 2000 is intended to maintain and preserve employment relationships, reducing the number of formal disputes and terminations. The Act requires employers to have ‘a plain language explanation of the services available for the resolution of employment relationship problems’ (s. 65 (2) (a) (vi)), typically including an outline of both within-organization and external processes for handling disputes. In common with many other jurisdictions, mediation is emphasized as the primary problem-solving mechanism (Budd and Colvin, 2008; Lipsky et al., 2003), with the Department of Labour offering first-level services to address any problem ‘relating to or arising out of an employment relationship’ (s. 5).

If attempts at mediation are unsuccessful, a matter can proceed to adjudication in the Employment Relations Authority. The Authority is intended to serve as an informal, non-legalistic body for determining legal issues at first instance, functioning in an inquisitorial rather than adversarial role (Anderson et al., 2005). If a party is dissatisfied with the Authority’s determination, the matter can be heard de novo in the Employment Court, as can narrower challenges to alleged errors of law in a determination. Matters that are legally complex or involve a large number of employees are also handled by the Court, which constitutes the first step in formal legal proceedings within the general judicial system (McAndrew, 2010). Although the original intent was that mediation and the Authority would be forums where parties could resolve matters directly, in the majority of cases, one or both parties have representation (Department of Labour, 2007a, 2007b). Over the last decade, the volume of claims reaching mediation has stabilized; however, numbers have increased at the subsequent stage of proceedings in the Employment Relations Authority (EMA Northern, 2009a, 2009b, 2011). In the within-organization pre-mediation stages, one previous study found that unions were the most commonly used form of representation (Department of Labour, 2000). The marked decline in union membership, however, has led to a range of non-union representatives, including lawyers and lay-advocates, becoming involved.

Business groups complain that there is a growing ‘grievance industry’ as financially motivated employees pursue claims that have little merit (EMA Northern, 2009b). Representatives are portrayed as fuelling this process, particularly the increasing numbers of contingency-fee advocates; these agents receive a proportion of any settlement awarded, but charge no fee if the case is unsuccessful. In response to employer requests, the National-led government recently moved to restrict access to grievances. A 90-day ‘trial period’ allowing the removal of grievance rights for new employees was initially introduced for small businesses, and was subsequently extended to all businesses (Employment Relations Amendment Act 2010 (10/125)). Government reports have also proposed regulation of representatives, so that lay advocates who are neither union officials nor lawyers would be required to belong to a professional governing body (Cabinet Economic Development Committee, 2007; Woodhams, 2007).

The Existing Literature

Previous grievance research has focused on specific aspects of grievance behaviour such as grievance initiation, processing, employee responses and grievance outcomes (Walker and Hamilton, 2011). This has typically used large data sets and focused on employer and employee parties, exploring the role of variables such as grievant, workforce and workplace characteristics (Knight and Latreille, 2000a; Lewin, 1999), stage of settlement (Knight and Latreille, 2000b) and enterprise size (Saridakis et al., 2008). Findings have been somewhat equivocal, but one recurrent theme is that smaller enterprises incur a disproportionate number of claims compared to larger organizations, which have greater expertise in dealing with grievances (Saridakis et al., 2008; Woodhams, 2007).

A long-standing line of grievance research has centred on testing and qualifying Hirschman’s (1970) loyalty–voice–exit model as applied to employment relations and grievances (Lewin and Peterson, 1999; Olson-Buchanan and Boswell, 2002). Freeman and Medoff (1985) initially proposed a number of benefits for both employers and employees that were alleged to derive from the existence of unions and grievance procedures. Those propositions, however, remain a topic of continued debate, attempting to reconcile the claimed benefits in areas such as employee loyalty, turnover and organizational performance with the decline in union membership and the apparent negative outcomes that seem to occur for both employees and their supervisors (Lewin, 2004, 2005). Overall, the research is constrained by its tendency to frame grievances as a single filing decision, focusing mainly on the employee perspective, in the rather unique context of North America (Lewin, 2004: 402–403). These factors, and the tendency to use aggregated data, leave significant gaps with regard to understanding the actual dynamics occurring within grievance processes and especially the role of representatives.

The New Zealand research is limited. Contrary to employer claims, reports instigated by the Department of Labour suggested a much lower incidence of workplace problems and concluded that the evidence did not support the assertion that there was a ‘grievance industry’ (Shulruf et al., 2009; Woodhams, 2007). The Department’s data indicated that contingency-fee advocates were only involved in around 16% of cases, although those cases did take longer to resolve (Shulruf et al., 2009; Woodhams, 2007). Several UK studies give some indication of how representation can influence the grievance process. Investigating the consequences of legislative changes, Gibbons (2007) suggests that when employers and employees sought the involvement of representatives at an early stage, this brought defensive attitudes and led to legal proceedings. Although disciplinary proceedings differ from grievances, union presence has been linked to better employee outcomes in that area (Antcliff and Saundry, 2009; Knight and Latreille, 2000a), with unions offering protection from unfair treatment, developing agreed rules and procedures, and restraining managerial prerogative (Edwards, 1995). Antcliff and Saundry (2009) argue that strong and effective trade unions can facilitate dispute resolution without the need for disciplinary action and can therefore promote early resolution of disputes.

The present study draws from a broader research project (Walker, 2009) that explored individual-level employment dispute processes in depth, encompassing the sequence of stages and the multiple participants involved. Previous research on the impact of representatives on grievance outcomes has predominantly been concerned with how the presence or absence of representatives is associated with grievance outcomes. Research designs have tested the relationship between whether neither, one or both parties are represented, and the outcomes of proceedings. Intuitively, one might expect that having representation would improve the likelihood of achieving a favourable outcome, particularly when the other party is unrepresented; however, the findings from this stream of research remain very mixed (Patterson, 2010). Although some studies distinguish types of representatives (McAndrew, 1999, 2002), the research has generally not addressed why and how representatives’ involvement can influence the outcome of a dispute process.

Methodology

The authors were given unique access to a total of 14 disputes that went to external mediation through the Department of Labour. Such mediation usually occurs when parties are unable to resolve matters through internal processes. Difficulties in negotiating access are a major obstacle to studying employment grievances (Bingham, 2007; Bingham and Chachere, 1999; Lewin, 1999). However, an agreement was reached whereby the parties were accessed when they contacted the mediation services. This provided a practical means of locating cases and exploring the sequence of events from the initial emergence of the dispute and its handling within the organization, through to the eventual resolution. This ensured a neutral venue and approximated the capture of data in real time.

A case-study approach allowed first-hand exploration of how and why grievances proceeded as they did. Unlike the more common disputed dismissals where the relationship ended some time ago, the cases selected were ‘ongoing’ disputes where the parties were still in an employment relationship. The disputes were still in progress with the parties seeking to restore their relationship, rather than arguing over compensation from an already-completed dismissal, and thus provided the greatest opportunity to learn about the processes occurring (Eisenhardt, 1989; Yin, 2003). All but one of the employees were experiencing their first formal grievance, and none had a history of prior grievances with other employers. Significantly, these were mainly long-term workers, with no first-year employees, and over 70% had been with their employer for five or more years.

A distinctive feature of the study was that it followed through the progression of specific disputes, accessing the full set of parties involved in each one, including the employees and employers (c.f. Saundry et al., 2011: 200). Earlier case studies were typically limited by the fact that they accessed only one party to a dispute (Department of Labour, 2002; Knight and Latreille, 2000a; Woodhams, 2007). The data came from multiple sources that triangulated each other: interviews, observations and written documentation. Semi-structured interviews occurred with all the main actors in a dispute – employees, employers, representatives and mediators – producing 70 in-depth interviews that formed the major part of the research data. Participants were asked to recount the sequence of events, how they perceived their situation and how they made decisions. The interviews were audio-recorded and transcribed for analysis. One researcher was permitted to attend mediation sessions as an observer. A range of written documents were also made available, including pre-mediation correspondence, submissions prepared for mediation and employers’ internal dispute procedures. This use of multiple sources also minimized the extent to which parties could provide socially desirable responses.

Data analysis followed the widely used method developed by Eisenhardt (1989; see also Lee et al., 1999: 169–170) and was performed by the primary researcher. The first step of within-case analysis created a summary of the dynamics of each case, identifying critical points and key influences in the progression of each case. The second stage involved cross-case analysis, searching for meaningful patterns through identifying areas of similarity and differences across cases. To ensure the validity of the preliminary codes, the full transcripts were then entered into NVivo. This allowed further refinement from constant comparison between the emergent constructs and the data, defining and testing the constructs, which led to a final set of codes. The relationships between the codes were defined so as to identify higher-level constructs. We also used Miles and Huberman’s (1994) tabular approach as this tested and clarified patterns in ways not always evident from the coded narrative. An overview of each case, the involvement of representatives and the outcomes are summarized in Table A1 in the appendix.

Key Findings: Representatives and Escalation

A general pattern of events emerged, with several broad dynamics driving the cases; these will be outlined first before moving on to the more specific variables relating to the representatives. Underlying these sequences, power emerged as one of the key elements that accounts for the progression of disputes, their escalation and the outcomes that could occur. This links with both power-dependence theory (Bacharach and Lawler, 1981) and the power dynamics model of Kim et al. (2005). A central aspect of this is the process of power-seeking; that is, the parties’ attempting to gain additional power in order to protect their interests. For example, early in the dispute, the employee may be unwilling to compromise and feel that they possess sufficient power to rectify their situation through in-house negotiation directly with the employer. When this is unsuccessful, the employee attributes the failure to a lack of power and seeks to increase their power by introducing an external agent into the negotiations. The employer, determined to maintain their fixed position, responds by introducing their own power from external sources. This sequence then proceeds until the issue is either resolved and the relationship restored, or the employment ends. A worker outlined how the absence of credible internal procedures, coupled with the increasing negative effects of the dispute on her well-being, meant that she felt forced to use an external representative:

’Cause the only other people that you can sort of go to are all managers and they are all very, very cliquey. I didn’t want to bring anybody like [advocate] in – I wanted to try and keep some kind of peace – I mean to bring [advocate] in was a last resort. I knew that that was just putting a real cat amongst the pigeons basically. (Employee)

This retaliatory power-seeking and escalation significantly reduces the likelihood of restoring the employment relationship. The nature of the representatives’ involvement causes direct dialogue between employer and employee to reduce or cease, and the interaction between the sides becomes more distant and adversarial. Any initial attempts to function in a problem-solving mode soon fade and the two sides instead adopt forcing approaches, that is, they focus on satisfying their own goals through the use of power; there is no expression of concern or understanding of the other’s position, nor any effort to attempt to build or preserve a future relationship (Folger et al., 2005; Pruitt and Kim, 2004). Employees who are relatively dependent on their employer hold lower levels of power and so are less able to protect their interests in this dynamic.

The move to mediation tends to exacerbate rather than reduce the negative aspects of the parties’ interactions. The respondent typically views the act of seeking mediation assistance as another aggressive move by the initiator. The mediation processes observed were typically facilitative or evaluative; rather than modifying the interactions, they tended to allow parties to pursue or intensify their earlier approaches with the escalation that this brings.

The employee eventually comes to perceive that they have used all the resources available to them, having attempted direct dealings with the employer, engaging a representative and finally attending mediation, but these moves have not produced any change in the employer’s position. Despite their repeated attempts to resolve the difficulties and retain their job, the employee perceives that they and their representatives are destined to be overpowered. Feeling unable to continue working in an untenable situation with little hope of improvement, the employee believes that they have no option but to terminate the relationship. This outcome contrasts strongly with other situations where representatives successfully move the sides towards a mutually satisfactory resolution and, hence, restore the relationship.

The nature of the influence exerted by an external representative can thus be pivotal in determining the eventual outcome of a dispute. Contrary to expectations from the public debate, however, the type of representative intervention was not simply a matter of the party’s role; the stereotyped perceptions that all lawyers or all union representatives behaved in a similar manner were not supported. The influence of representatives in these disputes was the result of a more complex process involving the three key dimensions that emerged from the data analysis: current relationship, future relationship and competency.

Discussion and Implications

The outcomes of the cases were notable. Despite the parties’ attempts to preserve their employment relationship, only three cases resulted in long-term continuing employment – 11 cases ended in termination; of these, six ended at mediation, and five terminated some time after mediation. All but one of the employees were represented by an external agent, either union, lawyer or lay advocate. A major turning point in the sequences occurred when a party, perceiving that there were no viable options available for resolving matters within the organization, introduced an external representative into the dispute. This typically occurred in the pre-mediation stage with the representative entering into the interactions between employer and employee.

The nature of the influence exerted by those representatives varied considerably. In one set of cases, their influence was positive, assisting in resolving the dispute and maintaining or restoring the employment relationship. In these situations, the representatives worked collaboratively, maintained dialogue and functioned in a problem-solving mode, that is, they acknowledged both their own and others’ needs and sought a mutually beneficial solution that addressed the interests of both sides (Folger et al., 2005; Pruitt and Kim, 2004). The nature of the representative’s involvement was perceived as constructive, allowing the sides to jointly work towards resolving the dispute. In some situations, the employment relationship had already deteriorated significantly prior to the representative’s entry; in those instances, the representative was able to resolve the immediate problems and allow employment to continue in the short to medium term, although, some months later, the employee may resign and move to another employer.

Conversely, in other situations, the entry of representatives and their manner of interacting brought negative effects. The dynamics of those cases changed; the involvement of the representative led one side to perceive that their opponent had introduced a new hostile influence that threatened their own position and, consequently, they responded in a similarly uncompromising manner. This escalatory sequence could occur at each point where an additional party was introduced into the dispute, and was most marked when an employer or employee brought in their own advocate or legal representative. The conflict literature provides a relevant framework for explaining these processes, with the escalation resulting in a classic conflict spiral (Folger et al., 2005; Pruitt and Kim, 2004) which resulted in the demise of the employment relationship post-mediation.

The findings have implications concerning the handling of individual-level employment disputes. The absence of effective within-organization dispute resolution systems can be seen as the first stage in a process of escalation and relationship decline. This initial failure can then trigger the introduction of external representatives, bringing further escalation and confrontation where the outcomes are determined largely by the power of the parties, typically concluding in termination of the relationship. The identification of this process offers two main points for positive intervention: first, by creating more effective within-organization procedures; and second, through having external representatives with positive profiles in terms of current relationship, future relationship and competency, which can lead to the preservation of employment. While the identification of these dimensions may match intuitive perceptions of dispute processes, they are largely unrecognized in the grievance literature.

Unions have a unique potential to avoid the cycle of escalation, bringing positive benefits at a number of levels. Their uncommon advantage of already-existing, positive relationships with an employer is confirmed in the recent UK findings of Saundry et al. (2011). This can, first, permit unions to represent the employees’ interests in establishing within-organization procedures that are perceived as being credible and effective, affording employees a degree of influence in resolving disputes within the organization. In addition, through their ongoing dealings with an organization, unions can foster a degree of trust with management and establish protocols for working together to resolve problems with dialogue and early informal resolution of disputes. While unions offer employees a degree of power, they can also have a high degree of concern for maintaining the future employer–employee relationship (as well as the union–employer relationship), along with high-levels of dispute-handling competency, thus minimizing the escalation that typically follows the entrance of an external representative.

In contexts such as New Zealand, with a geographically dispersed population and a large number of smaller organizations without specialized HR functions, unions may be well suited to a less formal, relational approach with management. Unlike North America, the New Zealand situation lacks the extreme competition over site-unionization and the ensuing tactical use of grievances by trade unions (Foster et al., 2009; Lewin, 2005). Thus, unions have potential to fulfil a key role as relationship managers, exerting a positive influence in grievances and leading to the preservation or restoration of employment relationships, similar to UK research concerning disciplinary matters (Antcliff and Saundry, 2009).

Whether this positive influence occurs in practice however, depends on a number of interrelated conditions. Not all unions have positive relationships with employers, nor do all unions hold significant power. In addition, unions may be selective as to the types of cases they choose to support; for example, a matter only affecting an isolated individual may receive less attention than a strategic issue affecting a number of members. Some unions place less emphasis on maintaining future relationships, or use a limited range of dispute-handling approaches, with strongly militant unions seeking confrontation rather than negotiation. The increase in grievance volumes is also occurring at a time when union density has declined markedly to around one-fifth of the workforce (Feinberg-Danieli and Lafferty, 2007), and research suggests that there is a significant level of employer opposition to unions (Foster et al., 2009). Unions may have a potentially valuable role to play, however; their absence may contribute to the higher volumes of grievances requiring external resolution. Paradoxically, while the Employment Relations Act seeks to maintain and preserve employment relationships, recent amendments potentially reduce union access to workplaces and so may lessen unions’ opportunities to fulfil this role as relationship managers. Although other representatives may have a concern for preserving the future relationship and competency, very few possess the vital current relationship with employers.

In the absence of unions, the task of improving within-organization processes takes on increased importance, especially when failure at this level can bring escalation and relationship demise. Other countries may need to learn from North American non-union sites in developing more effective within-organization procedures (Colvin, 2003; Lewin, 2005). Despite the best attempts at within-organization resolution, however, there will inevitably be cases that progress to involve representatives. For those situations, identifying the critical dimensions of current relationship, future relationship and dispute-handling competency can assist employees’ and employers’ decisions in selecting third-party representatives most suited to their needs. Awareness of these dimensions also provides guidelines that will allow policymakers and practitioners to develop training, procedures and policies to promote more effective involvement among representatives.