The term "employer/managerial prerogative"[1] is commonly used both by social partners and authors of labour law, however, the general term itself is not defined so far in any labour legislation nor has it been afforded a specific meaning in terms of common law (in common law countries). So the meaning of the term is thought to be selfevident and commonly understood. Present writing aims to examine the meaning, use and the possible limitations of employer prerogative focusing mainly on practice.
The general meaning of the term 'prerogative' is a right or privilege which belongs to a particular institution, group or person.[2] If we place the term in the employment arena, 'prerogative' is usually meant as a right to manage an organization.[3] More precisely - the employer has the right to organise its work arrangements so as to ensure the most efficient operation of its business. Basic to this understanding is the employer's right to take decisions in furtherance of operational objectives and to determine how these objectives will be executed.[4] Analysing the term in detail, Brassey gives a clear and practical starting-point for the discussion:
'The law gives the employer the right to manage the enterprise. He can tell the employees what they must and must not do, and he can say what will happen to them if they disobey. He must, of course, keep within the contract, the collective agreement and the legal rules that govern him. ... But, even given these constrains, he still has a wide managerial discretion. He can decide which production line the employees should work on; whether they should take their tea break at ten at ten fifteen; when they may go on leave; and countless other matters besides. He can also decide what will happen to the employees if they do not work properly, if they go to eat early and so on. In short, it is he who, within the limits referred to, lays down the norms and standards of the enterprise. This - at least as far as the law is concerned - is what 'managerial prerogative' entails, no more and no less.'[5]
As the citation shows, the list of the employer's possible decisions is long as well as heterogeneous. To have a clear picture on these decisions, we may distinguish between to major categories. The first category of managerial decisions refers to business and/or economic issues. Decision-makers of an enterprise have the power to arrange mergers & acquisitions, decide on the utilization of physical-, and financial assets needed by the organization, define vision and/or strategy of the organization, as well as the product it produces or the services it provides.
The other group of decisions refers to the utilisations of the organization's human resources. An enterprise of course may use external human resources such as independent contractors, students or temporary agency workers, to achieve its business goals, but typically they make use of own employees. Therefore decisions are also made regarding the number and qualifications employees needed, their terms and conditions of employment, where-when-how they should work and also how their employment can be terminated.
The concept of 'managerial prerogative' is usually seen as being of special importance when dealing with the second category of decisions.[6] It is more closely connected to labour law than to business law - it more commonly refers to the employer's ability to organise its human resources according to its needs.
Evidently however, the two categories of decisions have mutual impact on each other: decisions falling in the first category will influence the other category of decision-making. The business decision to make new investment, to relocate, to restructure, or to downsize the organization have serious impacts on employment decisions. Trade unions are aware of this overlap, and in some countries are becoming more and more assertive in their demands to have some say in the decision-making in the economic sphere of the enterprise, too. The
- 268/269 -
Legislature in South Africa for instance has come to the assistance of trade unions by providing in law[7] that an employer contemplating the dismissal of employees for operational reasons such as the economic, technological or structural needs of the business, must first consult with the trade union. It has also listed matters which relate to the business sphere of the organisation such as the restructuring of the workplace, partial or total closures, mergers and transfers of ownership, the dismissal of employees for reasons based on operational requirements, product developmental plans and export promotion as matters about which the employer must consult with the workplace forum (details see in: subsection 6.4.1).
Analysing the scope of employer prerogative, we need to mention Clive Thomson's view[8] who is contemplating on the existence of managerial prerogative in South Africa:
'There is no such thing as the managerial prerogative.
In some labour law systems, it is accurate to speak of business matters over which the unions have no say. At most, the union can make representation to an employer on, for instance, an investment decision, but if the employer cares not to hear or respond to those representations, here is nothing the union can (lawfully) do about it.
That is not the case is South Africa. A union can push for a collective agreement on 'any matter of mutual interest between employer and employee,' and it can engage in a protected strike on any such matter as well. It is the right to strike (...) on anything impacting on the employment relationship that signals, by definition, the absence of any managerial prerogative in our system of labour law. No employer decision on employment is immune from industrial or legal challenge.'
Thomson is visualizing the death of managerial prerogative in a legal system that fosters collective bargaining bolstered by the right to strike.
However, the criticism of Thomson's view is loud among authors who have obvious arguments: Section 1 of Labour Relations Act (LRA, 1995)[9] in South Africa expressly states that its intention is to promote collective bargaining. There is no statutory duty on an employer to bargain with its workforce on issues affecting the employment relationship.
As indicated in the Introduction, the terms 'employer' and 'managerial' prerogative are used as synonyms in both literature and practice. This is understandable, as employers' decision-making powers are mostly exercised by managers who act as employers' agents. Of course managers within an enterprise are not all given the same amount of authority: management, as a body usually consists of managers - except one-man undertakings - who collectively form a hierarchical structure of decision-making power.[10]
The need for some forms of employer prerogative is based on the fact that in any organization a mechanism must exist to coordinate effort and activities of its members to achieve goals. Some person or body of persons within the enterprise must have the power to decide on business goals, ways and mechanisms of execution and forms of supervision. Of course if the given power is delegated to more persons, the hierarchical structure of the organization will impose limits to executing the prerogative.
Discussions and writings use "employer" and "managerial" adverbs interchangeably when the right to manage is in question. The reason behind this is that employers' decision-making powers are exercised by the management of a given organization who act as the employers' agents. The management itself is in practice a complex and hierarchical structure empowered by certain decision-making powers by the employer. In this sense the employer is more of a legal entity, while the management is a group of managers running business and executing operational goals. Ownership and control in businesses in this way are separated from each other. However, the complete separation will not necessarily cause the employees to be managed differently - managers' interests are usually similar to those of the owners.
The relationship between employer or owner and management of business usually depends on the legal form of an enterprise. Of course in case of a one-man business no distinction comes in question between employer and management, unless the owner employs someone. The delegation of powers in this case is possible of course, too.
Analysing the roles of employer and management in case of companies offers a more detailed discussion. A company - as a juristic person - can
- 269/270 -
make business decisions and operate through its dedicated organs. Considering the different forms of possible companies, we may say that decision-making powers are usually executed by the board of directors. The decision-making power of course includes the right to manage its employees - the subject of this is set in the company's official document: in the articles of association. Of course it is also possible to delegate some or all of its powers to someone else within the company: to the managing director, to more than one managers, or even to an ordinary employee. These people then will form the circle of 'managerial prerogative'. Of course it is also vital to set and communicate to all members of the enterprise the subjects and their concrete rights within the framework of the managerial prerogative.
Employers of the public sector are not forming an exception in this sense. State, as employer, also appoints managers, heads of departments and units to be the bearers of employer's prerogative.
The fact that it is the owner of the business from who the employer's prerogative originates from seems to be self-evident in many countries all over the world. But what are the grounds of this general and common understanding?
Most of the arguments take social and economic realities into account. Perline[11] argues that the prerogative is derived from the real right of ownership in the property which comprises the enterprise. Other authors such as Young[12] criticise this argument: he points out that the owner's property rights do not extend to employees. Property rights give the employer the right to make decisions on business- and economic issues, but they do not afford the employer the right to manage its employees.
We could also assume that the employer's prerogative is based on the fact that only its managers have the necessary skill, knowledge and also ability to manage undertakings including their own employees.[13]
Others, as Collins[14] argue that the source of employer's right to manage is firstly based on the market power of the employer. Comparing employees' bargaining power to that of employers' on the labour market, we can state: employers have a significant dominance over employees, as they possess capital, information and access to legal advice. The employment relationship is set between a bearer of powers and someone with little or no bargaining power at all. In this view, the subordinate position of the contracting parties in the employment relationship serves a basis for employers to shape the relationship.
Collins's second argument for the employer's prerogative is the fact that employees when joining an organization, must fit in the already existing hierarchical and bureaucratic system of the employer. The newcomer becomes subordinate of those above him or her in the organizational hierarchy, so he or she must obey and follow internal rules and regulations.
All the above arguments have merit and offer sensible explanation to the powers of employer, but to make this power legally also enforceable and alive in practice in the long run, it must have its reinforcements in law, too. The socio-economic arguments above will support the emergence and existence of legal regulations in accordance.
The fact that in the employment arena the employer is the addressee of considerable powers is inevitable. The question is only how far these powers can reach? Are there any limitations to this power? And last but not least: who are the agents that can draw the line of such borders? In most international writings, the following restrictions are generally accepted:
1) Employment contract
2) Workplace practices
3) Collective bargaining & the right to strike
4) Legislation, with special focus on:
- Workplace forums
- Concept of fair labour practice, fair dismissal
5) Economic factors & public policy
Although the legal basis for employer prerogative is the employment contract, the contract itself may also restrict it. The contract contains the elements of employee's subordination (e.g.: regarding working-time, rest periods, length of probation time, length of termination period) to employer, but these parameters also mean the borderline of powers, too.
Also, the contract itself during the employment relationship is a document setting the framework (right and duties, also limitations of rights and
- 270/271 -
duties) of cooperation between partners. The set parameters are to be modified only by mutual agreement, only exceptional cases let employers set unilateral modifications - mostly only in favour of workers. According to case law in Greece, for instance, harmful unilateral change in the employment contract does not occur when:
a) The reduction of overtime, of night work, and of the work on Sundays and holidays, unless the employer has contractually assumed such an obligation.
b) The removal of supervising tasks, if the worker ceased to be trustful and if this removal does not result in ethical disgrace and reduction in wages.
c) The transfer to a different sector with the assignment of different tasks if it serves functional purposes and under the condition that the new tasks are not inferior and do not entail reduction in numeration.
d) The change of workplace as long as the business activity is extended in more places.
e) The change of the working hours of the worker that serves specific functional needs, as long as there is not a contrary contractual engagement and it is nor abusive.[15]
The following possibility to change contract unilaterally - but legally - is also present in Greek labour situations: The employer who wishes to ensure the variation of terms in the labour relation has the possibility to provide some clauses in the labour contract from the beginning. Consequently, when it is agreed a priori that the employer is entitled to change the terms of the contract, this change is not regarded as unilateral, but agreed, and thus it is permitted. However, the limits of the change must be precisely defined and the employer must act within these limits.[16]
An interesting solution is to mention in Turkish labour law, regarding the contract: the Labour Code of Turkey[17] provides that, when no written contract is drawn, within two months, the employer must give his employee a written document where are defined "the general and special conditions of work, the daily or weekly working time, the basic wage and its supplements, remuneration times, the duration of a fixed term contract, and conditions concerning the termination of the contract."[18] Such information is of great value, and later should enable the employee to oppose to unilateral modifications.
Turkish courts developed an interesting jurisprudence on workplace practices: in cases where the employer repeatedly applied new rights for a certain time, the practice then became a 'workplace rule' or 'provision of the employment contract' that cannot be unilaterally modified afterwards. For example, according to established rulings, after a bonus or another advantage is given to all workers with repetition in time (the usually required repetition is three times) this advantage could only be suppressed with agreement of the beneficiaries. However, the management can cancel such practice, if prior conditions or reservations had been attached to it, or if the management had declared in advance that such practice may be repealed anytime.
This practice has legal bases: Repetition in time of a gratification is considered as a 'workplace practice' that, in accordance to the principle of good faith and trust becomes part of the labour contract. This conception is also confirmed by the Turkish Labour Code[19] which provides that working conditions formed by an employment contract or its supplements, like workplace regulation and like sources, as well as workplace practice, may be modified substantially only by written consent of the worker.[20]
According to the unitary perspective of industrial relations, an enterprise is an integrated and harmonious entity, where all employees are identified with the aims of the business, therefore there can be no real conflict between the interests of employers and employees. The contracting partners of the employment relationship are "business partners" committed to the same goals of profit and pay. In small businesses this perspective is to be found still nowadays, with strong-willed person in topmanagement (or old family businesses) and in relatively isolated activities.
The pluralist view however acknowledges the importance of trade unions and the fact that certain employment issues should be made subject to collective bargaining. On unitary and pluralist view of industrial relations see more in EML Strydom's cited writing (1998).[21]
As EML Strydom put it:[22] "Collective bargaining without the right to exert economic pressure, such as strike action, to force the employer to comply with em-
- 271/272 -
ployees' collective demands would amount to collective begging."
From the employer's perspective, collective bargaining is the most acceptable method of regulating its decision-making power. Unlike legislation (unilateral intervention in employment relationship), collective bargaining is based on voluntarism.
A variety of forms of employees' economic reassure tools enjoy a protected status from legislature. The declaration of the right to organize and the ways how to organize strikes and other pressure tools are usually within the frames of legal restrictions, however its concrete practices are based on the free will of trade unions, on traditions and on the given socio-economic environment.
Accepting the fact that organizations have an exclusive decision-making power in business- and economy-related decisions, there is a general understanding that the employer's prerogative must have some sensible restrictions regarding employment decisions. In practice it means that the employer should be obliged to negotiate and/or bargain with trade unions in matters that are related to employee-wellbeing. The view that an employer's prerogative regarding its employees can be limited through collective bargaining is apparent from the definition of Mars and Evans:[23] '...the employer prerogative entails the rights or functions which management assert to be exclusively theirs and hence not subject to collective bargaining with trade unions, nor to joint regulation with unions or employees.'
We should make it clear at the beginning of the paragraph that collective bargaining in itself does not necessarily mean a restriction of freedom to the employer. If all circumstances are met, collective bargaining between parties is a must, but it does not always results in a form of a collective agreement. The duty to bargain (in good faith) however, protects the seriousness of the debate. In Greece, the Act No. 1876/90 establishes the framework of free collective bargaining. Article 4, par. 3, sub. 2 of the act also defines some elements that can be included in the sense of a good faith bargaining: parties must explain the grounds of their proposals and counter-proposals.
A section from the collective agreement between Avon Products Manufacturing, Inc. and Avon Products Manufacturing Employees Union (2001) operating in the Philippines set the outline of employer prerogative:
"The UNION hereby recognizes the COMPANY's right to the exclusive control of Management over all functions and facilities, and to the direction of the entire work force. The COMPANY shall be sole judge of the competence of the employee in the performance of his assigned work. The exclusive rights of the COMPANY shall include but shall not be limited to the right to schedule the hours of work, shifts, and work schedules; plan, schedule, direct, curtail or control operations schedule of production; to introduce and install new or improved production methods or facilities; to designate the work and the employees, to train employees and improve their ability; to make rules and regulations governing conduct and safety; to promote, demote, dismiss, discharge, lay-off, discipline, suspend or relieve employees because of lack of work, for just causes or for other legitimate reasons, transfer employees from one job to another or from one shift to another or from one work location to another; to institute a job classification and/or merit rating system or create new or additional classification or to eliminate classification or employees; to make changes in the duties of the employees as the COMPANY may consider fit or convenient for the proper conduct of its business; and to make and enforce rules and regulations, copies of which shall be distributed by the COMPANY to all employees within the bargaining unit, to carry out the functions of Management; in general to exercise the inherent and customary functions of management."[24]
The list above seems to be long and wide enough for the employer to live with his prerogative. However, let me point out one possible act of employer that is based on economic/business reasons, still seriously affecting employees' lives: the employer's prerogative to outsourcing. As discussed above, it is the right of the company to organise its business in the way it likes for the purpose of economy or convenience. The decision to outsource labours is an exercise of the managements' prerogative. The employer has the right to reorganise its business and operations, also the right to determine the volume of his labour force consistent with his business and organisation.
If strike - as a form of limitation to employer prerogative - is mentioned, it is needed to pose its counterpart that empowers employer's prerogative: lock-out. Lock out is usually a temporary work stoppage or denial of employment initiated by the management, but more often it is used as opposed to employees' right to strike. In theory various forms of lock-out exist:
- 272/273 -
- offensive/aggressive lock-out[25] tries to force employees to accede to employer's demands concerning terms and condition of employment,
- pre-emptive lock-out aims to pre-empt employees' plans to organise strike,
- defensive lock out is to counter employees' exercise of economic power.
In most countries, where lock out legally exist[26] its defensive form is allowed only.[27] In South Africa the fact that employers are statutorily entitled to employ temporary labour during defensive lock out only, it is likely that this may contribute to such actions. Employers are, however, reluctant to use offensive and pre-emptive lock out measurements, as they are prohibited to employ temporary workers under these circumstances.[28]
Legislation has an inevitable role in posing limitations to the powers of enterprises. The essence of labour law itself lies in the need for a regulating power that tries to balance between unequal partners - to strengthen the position of employees in order to reach a desired equilibrium.
Legislation in many countries for instance require that instructions of employers towards employees must not only be lawful, but also reasonable,[29] they also must meet serious health and safety requirements, as well as working conditions such as working- and rest hours or compensation (like minimum wage regulations). Turkish Labour Code sets the following rules regarding health and safety issues for instance:
With a view to ensure occupational health and safety in the workplace, employers shall take all necessary measures and provide all needed means, and necessary tools and instruments without default. Employees are under the obligation to comply with all the measures taken in the field of occupational health and safety (Labour Code 4857, art.77, par.1). In order to insure compliance and supervision of the measures taken, the employer must inform the employees of occupational risks and measures, as well as of their legal rights and obligations. The employer must provide the employees with necessary training on occupational health and safety (Labour Code 4857, par.2 of art.77).
The citation from the Turkish Labour Code is by no coincidence mirrors the elements of the EU directive[30] on the same topic: EU legislation has a decisive influence on recent laws and regulations in Turkey.[31]
Legislation cannot have the intention of course to set and control all aspects of the employment relationship. The freedom of contract is undoubted the essence of labour law. The minimum requirements, however - as guaranties for employees must have legal reinforcements.
Three aspects of legislation I am intending to highlight in the following subsections more in detail: the establishment and role of workplace forums (work councils) that are traditionally established and regulated by national legislation; and the issue of fair labour practice with special focus on the right to dismiss employees.
The Commission of the EU has described the underlying rationale of such participation mechanisms as follows:
"Increasing recognition is being given to the democratic imperative that those who will be substantially affected by decisions made by social and political institutions must be involved in the making of those decisions. Employees not only derive their income from enterprises which employ them, but they devote a large proportion of their daily lives to the enterprise. Decisions taken by or in the enterprise can have a substantial effect on their economic circumstances, their health and physical condition."[32]
Shop-floor-level institutions of worker representation may also serve as limitation to employer's prerogative. Worker participation bodies do not necessarily entail more than providing information or training, or the creation of opportunities for employees to get to know the management, or air their views.
However more and more legal systems facilitate the development of such institutions with providing them the right to negotiate with the employer, or even to make joint decisions with the employer in issues going beyond employment decisions.
LRA of South Africa for example states in its Section 84 the list of matters on which employers are obliged to consult with workplace forums before the decision is made:
a) restructuring the workplace, including the introduction of new technology and new work methods;
b) changes in the organisation of work;
c) partial or total plant closures;
d) mergers and transfers of ownership in so far as they have an impact on the employees;
- 273/274 -
e) the dismissal of employees for reasons based on operational requirements; exemptions from any collective agreement or any law;
f) job grading;
g) criteria for merit increases or the payment of discretionary bonuses;
h) education and training;
i) product development plans; and
j) export promotion.
LRA Section 85 offers guarantees for successful consultation also, as it states that the employer must allow the workplace forum an opportunity during the consultation to make representations and to advance alternative proposals. The employer also must consider and respond to the representations or alternative proposals made by the workplace forum and, if the employer does not agree with them, the employer must state the reasons for disagreeing. If the employer and the workplace forum do not reach consensus, the employer must invoke any agreed procedure to resolve any differences before implementing the employer's proposal.
Nevertheless, consultation does not mean that the assent of the workplace forum must be obtained before the employer can implement its decision. It merely means that they must give an opportunity to express their views and to make recommendations. Strictly speaking, the employer's prerogative is limited only to a certain extent: his last say is delayed for the time of consultation.
The same law in its Section 86 lists a number of matters about which the employer and workplace forums must jointly decide. Unless the matters for joint decision-making are regulated by a collective agreement with the representative trade union, an employer must consult and also: reach consensus with a workplace forum before implementing any proposal concerning:
a) disciplinary codes and procedures;
b) rules relating to the proper regulation of the workplace in so far as they apply to conduct not related to the work performance of employees;
c) measures designed to protect and advance persons disadvantaged by unfair discrimination; and
d) changes by the employer or by employer-appointed representatives on trusts or boards of employer-controlled schemes, to the rules regulating social benefit schemes.
Storey[33] defines employer prerogative as follows:
...the name for the remaining portion of management's original authority and is therefore the name for the residue of discretionary powers left at any moment in the hands of managers. Every act, which a manager of his subordinates can lawfully do, and without the consent of workers' organisation is done by virtue of this prerogative.
The above definition indicates that in business context, managerial prerogative is traditionally viewed as legitimate rights that empower managers to organise and direct employees, machinery, materials and money in order to achieve the business's aims.
As a court case from Malaysia[34] states: the enterprise has the rights to reorganise his business for the purpose of economy or convenience provided he acted in good faith. In carrying out the retrenchment, the employer has to show that it was done fairly. A case law has manifested the rights of employer under managerial prerogative. Although the employer is given the power to freely manage its business under management prerogative, it does not mean the employer has an absolute power. The employer is bound to exercise his management prerogative with bona fide intention, without discriminating and victimising his employees. This is to ensure the employer will not exercise its rights arbitrarily and to prevent unfair labour practice. This is because power tends to corrupt, absolute power corrupt absolutely. Therefore, the right of an employer under management prerogative can be challenged in the court of law.
The statutory interference in the employment relationship is the strongest when the dismissal of employees comes in picture. This is a set of rules in most countries, where the most far reaching limitations to employer's prerogative arise. The main reasons lying behind the strong intervention are obviously to provide job security to employees, to ensure that dismissal is the last option of the employer and also in some cases to promote industrial peace.[35]
Staying by the example of South Africa, it is set in current LRA[36] that every employee has the right not to be unfairly dismissed. This means that it is no longer sufficient for an employer to execute a lawful dismissal, it is also a requirement that the dismissal must be fair. The same law sets the requirements for a fair dismissal and sets also the so-called automatically unfair dismissals. LRA Section 187 says:
"A dismissal is automatically unfair if the reason for the dismissal is:
- 274/275 -
a) that the employee participated in or supported, or indicated an intention to participate in or support, a strike or protest action
b) that the employee refused, or indicated an intention to refuse, to do any work normally done by an employee who at the time was taking part in a strike or was locked out, unless that work is necessary to prevent an actual danger to life, personal safety or health;
c) to compel the employee to accept a demand in respect of any matter of mutual interest between the employer and employee;
d) the employee's pregnancy, intended pregnancy, or any reason related to her pregnancy;
e) that the employer unfairly discriminated against an employee, directly or indirectly, on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility;
f) transfer, or a reason related to a transfer.
In any proceedings concerning any dismissal, the employee must establish only the existence of the dismissal. If the existence of the dismissal is established, the burden of proof is on employer: he/she must prove that the dismissal is fair.[37]
The study of the jurisprudence in Turkey also reveals a quest for a balance between managerial prerogative and workers' security. As formulated by the Court of Cassation, "the employer has the right to define the number of workers to be affected at each workplace, according to the needs of the workplaces. Such a right is part of the managerial prerogative." The High Court generally implies that this prerogative is subject to the principle of good faith, but adds that "except in cases where an abuse of rights has been established, the judge may not interfere to the management."[38]
The Employment Rights Act (ERA, 1996) in the UK also dictates the parameters of an unfair dismissal. Under Section 94, it clearly states that employees have a right to fair dismissal. It is considered the most important right as only after dismissal a former employee would complain about his other rights being breeched as well. Under Section 98(2), fair reasons to dismiss an employee are: conduct of the employee; capability or qualifications; retirement; and redundancy.
Flanders[39] identifies not only the above factors that have limitations on employer's prerogative, but also the labour market, the availability of work which depends mainly on economic situation. In his view employer's prerogative is at its strongest when the economy is at its weakest, as a weak economy results in job scarcity and a large potential of workforce for employers to choose from.
The number of publications on employer's prerogative equals the number of definitions given to the phenomenon: theoretical writings all try to catch the very essence of the globally living fact that employers have serious impact on forming the employment relationship. This power basically incorporates the rights to assign and direct workforce, to discipline employees, to increase or reduce workforce in support of the firm and based on available money, to decide products availability, price, method.
The decision-making power of employers' on both strategic and operational issues is widely acknowledged among agents of the employment arena. The socio-economic reasons all stand in line to support this historically gained power.
Whilst the managerial prerogative has maintained unilateral powers for one party we can observe that more and more factors and initiatives aim to draw the borderlines of these powers. Both courts and legislation are beginning to impose more and more obligations on the employer to exercise these unilateral rights consistently with the principle of good faith and to avoid arbitrary and capricious results.
Among all above listed limitations, collective bargaining is possibly the most acceptable method regulating its decision-making powers. Unlike court decisions and legislative actions, which constitute unilateral regulation of matters, collective bargaining is based on the free choice of parties: employers and trade unions.
However, collective bargaining, as a method, is inevitably linked to the strengths of trade unions. In those countries, where negative tendencies regarding trade unionism are growing, the expectations on sensible collective agreements are low. Where trade unions are widely accepted, active and have economic powers dedicated to them by law, enterprise-tailored solutions of collective agreements may serve business effectiveness.
Of course unilateral power formation on the long run will not serve investors'/employers' needs. If they want to counter the statutory regulations of its prerogatives, the only way out will be
- 275/276 -
to involve trade unions (also work councils) more and more in business-related decisions, too. ■
NOTES
* The writing was supported by the Hungarian Scientific Research Fund - OTKA K112961.
[1] In this article, terms 'employer prerogative' and 'managerial prerogative' will be used as synonyms, however a slight distinction will be made between the two terms later in subsection 4.1.
[2] Joyce M. Hawkins: The Oxford Paperback Dictionary 3 ed (1988)
[3] In this article, terms such as 'business', 'enterprise', 'undertaking' or 'organisation' will be used as synonyms, unless the context indicates otherwise.
[4] C. R. Shooter (2010): Managerial Prerogative: A Cosseted Preserve of Our Labour System or A Fool's Safe Haven? IN: South African Mercantile L.J 532 (Content downloaded from HeinOnline)
[5] M. S. M. Brassey et al: The New Labour Law (1987) p. 74.
[6] EML Strydom: The Origin, Nature and Ambit of Employer Prerogative (Part 1) (1998) IN: Law Journal South Africa 11. (Content downloaded from HeinOnline)
[7] Sections 84 and 189 of the Labour Relations Act, 1995 (South Africa)
[8] C. Thomson: Bargaining, Business Restructuring and the Operational Requirements Dismissal (1999) 20 ILJ 755
[9] LRA covers all employees in South Africa, except members of the National Defence Force, the National Intelligence Agency, and the South African Secret Service
[10] See more in: EML Strydom (1998)
[11] M. M. Perline: Organized Labor and Management Prerogatives (1971) IN: California Management Review 46.
[12] S. Young: The Question of Managerial Prerogatives (1962-1963) IN: Industrial Labor Relations Review 240
[13] See more in: EML Strydom (1998) p. 48.
[14] H. Collins: Employment Law. Oxford University Press, 2010
[15] See more in: K. D. Papadimitritrou: The Managerial Prerogative and the Right and Duty to Collective Bargaining in Greece IN: Comp. Labor Law & Pol'Y Journaly Vol. 30:273 p. 275. (Downloaded from HeinOnline Nov 14 2016)
[16] K. D. Papadimitritrou (2016) p. 277.
[17] Turkish Labour Code (Law No. 4857)
[18] Article 8 of Turkish Labour Code
[19] Article 22 of Turkish Labour Code
[20] Melda Sur: The Fundaments and Limits of Managerial Prerogative in Turkish Labor Law IN: Comp. Labor Law & Pol'y Journal Vol. 30:313 p. 315-316.
[21] There is however a substantial group of trade unions worldwide, which hold the so-called radical view of industrial relations. Radical trade unions are challenging all the prerogatives which go with the ownership of enterprises, not simply the exercise of control over labour power. They argue that the imbalance in power will not be restored as long as they are prevented from bargaining collectively over issues which belong to economic spheres of the business.
[22] EML Strydom (1998) p. 321
[23] A. Mars, E. O. Evans: The Dictionary of Industrial Relations (1973)
[24] B. M. Tomboc: Management Prerogatives and Employee Participation, De La Salle University - Manila, Philippines (2004)
[25] This is a generally forbidden form of lock-out. See more in: Ruth: Strikes, lock-outs and other kinds of hostile actions IN B. Hepple: International Encyclopaedia of comparative law Vol. XV. Labour Law Chapter 15. Tübingen, Mohr Siebeck, Nijhof, 1997. p. 3-57.
[26] Aussperrung in German law, serrata in Italy, grève patronale in France, but it also exists in Turkey (Collective Labour Agreements, Strikes and Lockouts Law No. 2822.)
[27] This is the case in Italy, Germany, Austria in Europe, or in South Africa.
[28] LRA Section 76
[29] It does this in the LRA of South Africa, when it sets that a dismissal must be that of a fair reason (Section 188/1)
[30] Council Directive 89/391/EEC on the introduction of measures to encourage improvements in the safety and health of workers at work
[31] Turkey's candidacy to the EU has also had a great impact on legislation. The latest Labour Code No. 4857 (2003) was drafted by a scientific committee of Turkish academicians who adapted EU Directives and relevant ILO conventions.
[32] Employee Participation and Company Structure in the European Community, Bulletin of the EU Commission (Aug. 1975)
[33] J. Storey: Workplace collective bargaining and managerial prerogative (1976). Industrial Relation Journal, 7(3), p. 40-55.
[34] K. H. Hassan, L. J. Ping, N Ismail: Human Resource Management: Labour Outsourcing from Malaysian Law Perspective IN: Prosiding Persidangan Kebangsaan Ekonomi Malaysia Ke VIII 2013
[35] In the 1950s in South Africa, LRA entitled co-workers to collectively refuse to work until the dismissed workers had been reinstated. However, the Industrial Court has regarded this kind of strike as less acceptable. According to the new LRA workers are prohibited to organize strike over dismissals.
[36] Section 185
[37] LRA Section 192
[38] Court of Cassation 9th Chamber, 7.7.2005, 30947/24233, Tekstil Ilveren Feb.-Mar. 2006, 314.
[39] A. D. Flanders: Management and Unions (1975) London, Faber
Lábjegyzetek:
[1] A szerző egyetemi adjunktus, PTE Közgazdaságtudományi Kar.
Visszaugrás
