Employment Relationship: Economic, Social & Legal Dimensions

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In the theory and practice of industrial relations, it is pertinent to note that it arises from employment relations. Hence, it highlights the dual nature of industrial relations and the constant actions by the two sides attempt to control power in the relationship (Block, Berg & Belman, 2004). Therefore, what is central to industrial relations is the employment relationship between an employer and employee as it gives raise to the bargaining agenda in the pursuit of power. As a result of common practice of bargaining in the employment relationship, some three major dimensions can be identified. These are: economic, legal and social; this paper will thus seek to show how the three interact and posit that the economic dimension is most influential in employment relationships.

Employment relationships at its basic level revolves around economics, this is highlighted by the neoclassical economics which provides a theoretical approach on how employment relations take a form of economic transactions the world over. This is because individual laborers and firms are keen on maximizing utility and profits respectively from scarce resources based on market determined prices which are beyond their control. For example, the employees are often seeking work using their individual skills at a price offered by the firms. After which, they can enjoy utility of that wage through consumption; whereas, the capitalists or firms seek to maximize their profits by producing goods and services from the employees which is covered by wages. The case of competition as a result of globalization is prevalent in the market environment and therefore firms seek to maximize outputs at a lower wage rate leading to pressure on the employment relationship (Dibben...

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...oyment Relationship, pp. 94-118

Budd, JW 2013, "The Thought of Work in Employment Relations", Employee Responsibilities and Rights Journal, vol. 25, no. 1, pp. 61-65.

Charlesworth, S & Todd, P 2013, “Women, work and industrial relations in Australia”, Journal of Industrial Relations, Vol. 55, no. 3, pp.371-385

Dibben, P and Williams, CC 2012, Varieties of Capitalism and Employment Relations: Informally Dominated Market Economies. Industrial Relations: A Journal of Economy and Society, 51: pp.563–582.

Kalleberg, AL & Reve, T 1993, 'Contracts and commitment: Economic and sociological perspectives on employment relations', Human Relations, vol. 46, no. 9, pp. 1103- 1132.

Riley, J & Sheldon, P 2008, 'Remaking Industrial Relations in Australia', Economic And Labour Relations Review, 18, 2, pp. 1-6, EconLit with Full Text, EBSCOhost, viewed 22 March 2014.

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