Resolving disputes on the job

by 21 Aug 2007

Unresolved workplace disputes and grievances can be very costly. Carole Goldsmith examines the role of conflict resolution in the workplace and looks at strategies that employers are using to prevent and handle disputes on the job

As one of ToyotaJapan’s global manufacturing centres, ToyotaAustralia employs more than 4,750 people, including 3,500 manufacturing workers.

ToyotaAustralia has a comprehensive seven-step problem resolution and disputes avoidance procedure in place to assist with resolving employee grievances and problems. This process, which is outlined in Toyota’s Workplace Agreement, can see issues escalated up to relevant management representatives until the issue is resolved, according to James Dymock, employee relations and safety manager for ToyotaAustralia. This process also involves an employee’s representatives (shop stewards) and HR representatives.

If an employee’s physical or mental health is affected by a dispute, employees can access support through the on-site occupational health centre and counselling support from the employee assistance program provider. There are also various health and wellbeing programs in place through Toyota’s occupational health centre.

Michael O’Sullivan, national human resources manager for The Laminex Group, says there are a number of reasons why there are few disputes within the company, which employs around 2,800 people across Australia and New Zealand. Significant emphasis is placed on establishing stable and direct relationships with the workforce, which ensures that employees have confidence in the ability of the business to address their concerns in a reasonable and timely manner, he says.

“Our HR team is skilled in conflict resolution techniques and are able to play a direct role in assisting managers and employees to resolve issues as they arise. Managers and supervisors are accountable for and have authority to resolve conflict and grievances at the local level, within defined guidelines.”

The Laminex Group also has strong and constructive relationships with the unions that represent its employees, according to O’Sullivan, and hence are stakeholders in the business. The company has procedures in place for disputes and grievance resolution, which envisage that: all disputes and grievances will be discussed internally in the first instance; disputes and grievances can be escalated within the business; employees can have appropriate representation at all stages; and disputes and grievance can be referred to external parties or tribunals, if not resolved and there are confidential and anonymous reporting mechanisms, which are managed by third party organisations.

What are the most common workplace disputes?

Chris Molnar, a partner with Harmers Workplace Lawyers, reports that the most common areas of dispute arise from interpersonal conflict, between employees and supervisors, such as bullying and harassment.

The end result is a decline in productivity, says Molnar. “If the matter is not resolved quickly, then claims could be made for any resulting injury, or for unfair or unlawful dismissal if there is a termination of employment,” he says.

Another area of dispute arises from organisational changes, such as a restructure or relocation. Employees sometimes feel aggrieved as they have been insufficiently consulted or if their views have not been properly taken into account, according to Molnar.

Toyota’s Dymock says that conflicts in the workplace generally arise out of day-to-day operations and tend to predominantly relate to issues over the application of Toyota’s Workplace Agreement, in addition to breakdowns of relationships in the workplace.

There is an established process/culture in the workplace at Toyota in respect to how disputes are raised and addressed, he says. “This has a heavy emphasis on the early stages of the problem resolution procedure, to have matters dealt with by an employee’s direct supervisor or manager. The HR division, particularly the employee relations group, plays a key role of facilitating resolution to such problems through the formal problem resolution procedure.”

Conflict resolution: the legalities

Having an effective grievance resolution policy that staff are both aware of and trained in are vital, Molnar says. Employees need to know the behaviour that is prohibited at the workplace including bullying and unlawful discrimination.

“If a grievance is raised, it needs to be handled promptly and effectively. The dispute will become aggravated in time if left unresolved. Failing a prompt and effective resolution, employees will inevitably feel disaffected and in all likelihood will make claims to external bodies including, for example, the federal or state equal opportunity commissions or to a court. Such action will dramatically increase the costs.”

In recent times, there have been cases where employers have been found liable at common law for failing to comply with their own grievance procedures. A failure to comply may expose an employer to large damages claims.

The costs of unresolved workplace grievances

The key to effective employee relations is to ensure there are avenues for employees to raise workplace issues and concerns, and to have them addressed in a fair and timely manner. The problem resolution procedure facilitates this process, says Dymock. “The costs of not doing so (such as absenteeism, lost productivity, mistakes resulting in quality issues and workplace accidents) are irrefutable and cannot be ignored,” he says.

Workplace disputes are often very costly to everybody involved, both financially and otherwise, Molnar says. Inevitably, businesses will suffer in terms of lost time and reduced productivity, and as such, he says it pays to invest in the development of effective policies and ongoing training for staff. “It also pays to have a few key staff specifically trained in workplace conflict, so that if a dispute arises they can advise on how to effectively and quickly resolve it,” he says.

O’ Sullivan says the symptoms and impact of unresolved workplace conflict or grievances manifest themselves in a variety of ways. “The obvious consequences include physical and mental health issues, reduced productivity and morale, increasing absenteeism/presenteeism and the escalation of conflict. The less obvious consequences include the loss of employee engagement, the impact on attraction and retention, damage to employer reputation.”

The effect of WorkChoices

The Laminex Group’s O’Sullivan reports that WorkChoices has created some apprehension and uncertainty within parts of the company’s workforce, especially those with high union membership levels.

“We have tried to counter the more negative perceptions through ongoing communication and consultation. Where changes have been necessary in the context of legislative compliance, we have tried to assist employees to comprehend the changes. We believe that it is important to ensure that we do not allow an information vacuum to develop or persist.”

According to Molnar, there has been a dramatic decrease in industrial disputation since the introduction of WorkChoices, particularly with regards to strikes. He puts this decrease down to a tightening up of the processes to deal with unlawful action and the fact that before lawful industrial action is taken by union members, it is necessary for those employees to vote for the action through a secret ballot.

“In relation to individual disputes, many of these can still be processed through the Australian Industrial Relations Commission [AIRC]. However, it is a requirement of the legislation that the parties themselves try to resolve the matter at the workplace level first. This means that instead of using the AIRC as the first step in the dispute resolution process, the AIRC is the last step. This means that it is likely that the AIRC will deal with fewer disputes.”

The role of HR

Michael O'Sullivan, national human resources manager for The Laminex Group, says HR professionals can assist in developing strategies to avoid and resolve conflicts by:

Assisting management to establish an environment that fosters open communication

Contributing to the development of strategy both by questioning or challenging the desired strategic goals and by educating the business about alternatives

Applying their understanding of conflict resolution techniques to the particular business context

Leading and/or partnering business leaders in the implementation and review of strategy