MAN2601 | Employment Relations | Managing Employee Relationship

Employee bargain is considered to be an important aspect to maintain the transparency and benefits for both the employees and the employers in terms of the company. In this context, as per the definition set by the Fair Work Commission (FWC) it can be argued that the bargaining process is a negotiating terms between the employers or the company and an individual employee or a group of employees (fwc.gov.au., 2018). It is covered as an agreement between the two parties in order to establish transparency in the relationship between the company and the employees. As a matter of fact, this negotiating terms has to be mentioned during the recruitment process. In this context, the essay is trying to discuss the employee bargaining practice in Commonwealth Bank Australiain the light of understanding the relationship between the employees and the bank authority. In course of the discussion, both the alternative perspectives of both the employees and the bank authorities were discussed in order to perceive a clear idea regarding the employment relationship. In this context, the legal considerations were also taken into the discussion with addressing the recommendations. Furthermore, it can be stated that the report puts emphasis on the overall impact of the employee bargain on the workplace as well as the entire business industry.

It can be argued that the Commonwealth Bank had faced a series of ethical issues in recent times that were related to the organisational culture or the relationship with the staffs and customers. In this context, the incident of fraudulence in 2014 was very important that shook the firm market capitalisation of Commonwealth Bank Australia(CBA) and damaged its future possibilities of becoming the best in Australia. According to Kruger (2018) it was stated that CBA had lost its permanence and solidity in the Australian market due to lack of understanding and mismanagement within the workplace culture. It was true that the company was very intended to maximise its market through exploiting the customers to some extent. It raised question against the corporate sustainability that was supposed to be followed by the organisation. On the contrary, Kruger (2018) showed that CBA was failed to develop such measures that were very important in recent times in order to establish customer base strategically. Furthermore, the bad management process hampered the relationship between the employees and the management authority. In the previous year Commonwealth Bank Australiabecame a news due to terminate 7000 employees. However, that was not the end of the employee related issues in CBA. The company recently came to the limelight again because of imposing huge burden of financial scandal remunerations on the employees.

The report of Sydney Morning Herald ventilated a report stated that the bank was proposed to impose a huge burden worth of $100 million on the employees that had be waged due to financial scandals over the past two years. In other words, it can be argued that the organisation deliberately condemned its employees for those financial breaches and scandals and as a consequence levied huge remuneration amount on them. The news also highlighted that the downward profit margin of CBA in 2018 with a rate of 53.0 was very threatening as the other peer banking organisations scored 63.5 in the reputation score (Kruger, 2018). It pushed CBA to implement drastic decisions of imposing remuneration burden on the employees. It was also mentioned in the annual report of Commonwealth Bank Australiathat they felt sorry for those scandals and taking series of firm measures as a remedy. In this context, the incentives of the management authorities will remain the same. The report also discusses the existing incentive structures of the company management in order to perceive an idea regarding the discrimination that was still exists in CBA. During the period of Ian Narev, he took a huge incentive in terms of more than $3.3 million that exceeded his salary of 2.9 million. Besides this, the recent CEO of CBA Matt Comyn is also a subject of further investigation because as per the report his remuneration is worth of nearly 3 million. Therefore, it is also not a small amount that the company has to pay off to Comyn. Moreover, the former head of Operation Kelly Bayer Rosmarin got a remuneration worth of $5.15 billion (Kruger, 2018). As a matter of fact, during an interview with a news correspondent Comyn was asked the share his perceptions regarding the continuous breaching of confidentiality of the company and in a reply Comyn indirectly alleged the employees for those scandals. At that time the report asked him about the failure of the top authority and Comyn strategically undermined it. However, the normal employees were not familiar with their payments but still they had to pay the debts. This was against the employee bargain measures and at the same time the Fair work ombudsmen set by the Australian government is also breached because the charges CBA is intended to put on the employees are unjustified and unequal. Therefore, there should be interference from the Australian government and the legal bodies to prevent the process of further exploitation of the employees.

In this context, the Commonwealth Bank Australiastated a different version by highlighting the imposing the remuneration on the higher authority only. As a result of that the Sydney Herald covered the story that the CBA executives were decided to cut down their incentives due to the scandals and atoned for those crimes. In this respect, the incentives of Matt Comyn was also cut down to a half in compare to former executives of Commonwealth Bank Australia. However, the company also published its annual report by stating that the senior executives had to forfeit their incentives due to the fraudulent activities in the organisation. In this context, the report encompasses the cut off in the incentives of the executives like former wealth boss of CBA Annabel Spring who received just $4 million including the termination payment of $1.37 million. In addition to this, the IT head of Commonwealth Bank Australia, David Whitening also faced a deduction in remuneration with a total payment of $4.7 million including the termination payment.However, it can be stated that it never proved that the company did not take any harsh step towards the employees. The news of terminating 7000 employees was identified as a consequence of those terms. It meant senior executives were not cope with the situation rightly as there were several loops in their actions. At the same time, it can also be stated that treating the employees by the senior management was illegal and unjustified as it violated the Fair Work negotiations and the employee bargain agreements. The scandal was purely driven by the lack of monitoring and decision making abilities by the executives rather than have any relation with the inability of the normal employees. Therefore, there is still some issues that are not addressed properly in terms of treating the employees effectively and make a better workplace environment. From that point of view, it can be stated that the role of the senior executives of Commonwealth Bank Australiawas unjust and unprofessional enough to deal with the situation rightly. Putting a huge expense on the employees or reducing the incentives of the senior management could not be an effective solution that would mitigate the scandalous trend of Commonwealth Bank Australia.

In this context, it is pertinent to discuss the efficacy and importance of the employee bargain process. For example, it can be stated that the role of the employee bargain is to create an understanding related to disclosing the relevant information in a proper manner. It is the responsibility of the management to illustrate the employees about the policies and terms and conditions set for the employees (Beck & Paton, 2018). During the time of employment, the staffs are informed about the agreements of their job and it must be followed both by the organisation as well as the employees (Bott & Milkau, 2014). Therefore, it will help to build a better relationship and transparency between the employees and the management. Besides this, in Australia the Fair Work Act 2009 tries to set some measures for the organisations in order to establish a better operational framework and environment as well. Therefore, the Fair Work Commission puts more emphasis on the employees and the majority support determinants. It means employees with a majority decision have to be taken into consideration and the organisation has to set its agreements on the basis of the benefits for most of the employees (Chan, Watson & Woodliff, 2014). Therefore, from that point of view the employee bargain is highly significant and fosters a healthy business environment.

As far as the legal framework for the employee bargain is concerned there are some legal constraints and factors that are responsible to establish a better working environment in Australia. In this regard, the important legal manifestations are Fair Work Act of 2009, National Labour law in Australia and the Australian National Workplace Relations System.

In this regard, as far as the Fair Work Act 2009 is concerned it can be argued that the act was enacted in 2009 by the Ludd Labour government in order to meet both the interests of the organisations and the employees. In this regard, the FWA also enacted some provisions about the enterprise bargaining that is resembled with the agreement between the employees and the organisations (fwc.gov.au., 2018). As a matter of fact, the agreement can be made between individual employee or group of employees in case of installing a fair understanding and relationship between the employees and the employers (Poole & Jenkins, 2013).

On the other hand, the Employment and Labour Law 2018 was also a part of the FW Act. However, this law is primarily put focus on the employees and tries to establish a better understanding related to the privileges and benefits of the employees. In other words, the act perceive asafeguarding measures for the interests of the employees so that they can get better contract that can fulfil their interests (fwc.gov.au., 2018). Moreover, the employment law puts thrust on the minimum wage of the labourers and enforced some acts so that it can be followed strictly and the interests of the employees will remain constant (Mailath, Postlewaite & Samuelson, 2013).

On the other hand, the Australian National Workplace relations System was also entitled to secure the interests of majority of the private company employees and also facilitate some framework for making a better relationship and understanding between the employees and the employers (jobs.gov.au., 2018). In this context, the minimum terms and conditions of employment are the basic requirements that the employees have to follow and at the same time it is also important for the employers to set some provisions that facilitates better workplace environment in Australia as well prohibiting the organisations to practice unfair and unlawful termination of employment (Pandher & Currie, 2013).

As a matter of fact, the Employee bargain has a deep impact on the workplace scenario. For an example, in case of the workplace culture it can be articulated that the Employee bargain tries to maintain a flexible environment inside the organisation so that the employees will practice creativity and innovation in a great extent (Liu, 2015). Moreover, the role of the organisations is to encourage the employees to a far extent so that they can feel freer to cherish their innovative ideas. In addition to this, it can be stated that motivation and transparency is also considered to be important feature of Employee bargain (Bova, Dou & Hope, 2015). In response to this, it can be advocated that the role of the Employee bargain is to make the employees aware of the terms and conditions of their job so that they can get a clear picture of the every aspects of the job description (Breda, 2015). Furthermore, the process also make a better understanding between the employees and the employers. This understanding is identified as a strategic advantage that can facilitate the profits and sustainability of the organisation in one hand and satisfy the needs of the employees on the other (Kapoutsis, Volkema & Nikolopoulos, 2013).

The overall impact of the Employee bargain is related to the sustainability of the business organisation. It is related with the corporate sustainability where the business organisation primarily focus on its image and brand value that are responsible to maximise the customers and make a quality service and product (Helveston & Jacobs, 2014). In fact, the Employee bargain can provide some advantages to the organisational framework in order to deliver a strategic benefit to the companies. From that point of view it is important to incorporate an Employee bargain practice (Colvin, 2014). On the other hand, the practice also delivers a better treatment in terms of the employee relation that usher creativity and innovation for the organisation (Dahl, Le Maire & Munch, 2013). The organisation can push the employees to generate innovative ideas so that the service quality of the organisation will be improved a lot. On the other hand, the employee relation is an important aspect for the nations as well in order to build up the business environment more attractive and effective (Faleye, Reis & Venkateswaran, 2013). In this regard, the legislative frameworks have to be strong enough so that it can meet the interests of the employees and imbibe creativity to a great extent. In case of the Commonwealth Bank it can be stated that the role of the Employee bargaincan be identified as a very important aspect that can provide strategic advantage for the company to deal with the ethical issues (John, Knyazeva & Knyazeva, 2015). As a matter of fact, it can be stated that there are enough number of ethical breaches in CBA that can be mitigated to a certain extent. At least the company could resolve the employee issue with the help of the Employee bargain. In response to this, there is a huge significance of the Employee bargainin order to establish a better framework for the CBA (Dobre, 2013).

In this context the role of HR is very crucial because the HR is the responsible person to communicate with the employees directly. According to Kim and Sung-Choon (2013) the HR is considered to be a bridge between the individual employees and group of staffs and the senior management. Moreover, the HR is also responsible to understand the problems of the employees and tries to safeguard their interests as far as he can. The Employee bargain provides them the legal opportunity to communicate with the employees and ask them about any work related problem. Therefore, the success or the result of the Employee bargain process is to a far extent depended on the Human Resource managers. In his research Bidwell et al. (2013) argued that the role of the HR is to notify the employees about any changes in the organisational policy. Moreover, it is the responsibility of the HR to ventilate the interests of the employees to the senior management. In addition to this, the mechanism of the communication between the HR and the employee is based on the Employee bargain agreement (Arrowsmith & Parker, 2013). It is imperative for the HR to procure such measures for the safety of the employees as well usher more profit for the organisation. During the recruitment process all the details related to the prospect and opportunities of the job are briefed by the HR so that the newly recruited employee must acknowledge every aspects of the job. There can also be a negotiation of payments between the interviewer and interviewee. At that time as per the Employee bargain norms the HR is designated to discuss with the remunerations of the employees and also mentions the expected payment that the company can provide (Boxall, 2013). From the above discussion it can be stated that the HR is the determinant of the whole Employee bargain process that can deliver a better framework of workplace transparency and effectiveness.

The recommendations for Commonwealth Bank Australiaare as follows,

An effective HR management process has to be set up in order to conduct a better employee relation mechanism so that both the employee and employer can get advantage of it. In this regard, the HR manager has to acknowledge with the entire process of the Employee bargainand also the legal constraints that can create further issues related to employment relationship. On the other hand, procure a better mechanism in terms of the communication between the HRM department and the senior executives so that the employee related issues can be addressed properly. It is important for the organisation to manage its employment relations effectively otherwise they can maximise their productivity and services. In case of the CBA it is important to stabilise the organisational structure and the relationship between the employees and the management.In addition to this, implementing a better understanding regarding the role of the legal framework. As a matter of fact, the legal constraints are responsible to control the interests of both the employees and the employers. It will create a better and healthy business environment. As a matter of fact, the companies can also avoid any extra charges due to have a great knowledge in the regulatory acts.

The above discussion is primarily puts emphasis on the Employee bargainand in this context analyse the relationship between the organisations and the employees. For a better understanding the essay also incorporates the case study of Commonwealth Bank of Australia where the bank was alleged to have imposed bulk of money on the employees to mitigate the reparation of $100 million that was charged due to ethical breaches. In this context, the discussion rightly portrayed both versions of the allegation in terms of the employees and the employers. From that point of view the essay derives the idea of the importance of Employee bargainin an organisation. It can be argued that the employee bargain is a legal term that connotes the agreement between the company and the employee to facilitate a better workplace culture. In addition to this essay also underlines the respective Australian legal aspects that are contributed heavily on the context of Employee bargain. Therefore, it can be concluded that the essay clearly defines the importance of the Employee bargain in the light of not only the profit for the organisation but also the benefit of the employees. Henceforth, the essay is relevant and rational enough.

Reference

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