Reference no: EM133011941

Kent Technologies is the Australian arm of US manufacturing company located in the south-eastern suburbs of Melbourne. They specialize in building advanced scanning machines used in the health sector and developed in the US. The company was established in 2005 to service the growing health care market across Advanced Market Economies such as Australia with an ageing population. Sales have remained strong and in fact increased during the pandemic. The company has always been very profitable.

Kent has 160 full time staff mainly in the production, maintenance and transport areas. Responsibility for employee relations (ER) is with the HR manager. The US HQ tends to set policy, to support the HR manager with employee relations matters, but there is discretion for variations, based on the local ER culture. With regard to employee relations therefore, Kent Technologies operates an open-door policy to deal with any issues on an individual basis as and when they arise. It regularly conducts surveys and has an employee - employer consultative committee. Employees are activity encouraged to take up ER issues directly with their Line and HR manager, rather than any outside body (often thought to imply trade unions) to resolve issues. Any issues unresolved are referred to the consultative committee. The committee under the old management proved quite effective in being an honest and open forum where both sides could air their views and were respected. This robust environment created effective joint decision-making outcomes.

Until recently pay and conditions have been in the top quartile for this industry. However, at the start of the 2020 for the first time a new HR manager from the US was appointed as well as a new Managing Director (MD) - in the first meeting with the staff they indicated that they were appointed to increase market share and profits which would increase job security.

In a matter of weeks, the pandemic hit, however, as an essential industry Kent remained open and in 2020, had increased production by 15 % and profits by 20%. This took a strain on the workforce who were working extra shifts to maintain output demand. As the second wave of the pandemic subsided in Melbourne, and the work levels returned to normal, issues were raised firstly with their line and new HR manager regarding additional pay or time off in lieu for the extra hours of work undertaken. The HR manager listened and was understanding of the issues but noted to keep your jobs, this is the 'new normal' and not work intensification. The matter was then raised again and put to the consultative committee, where the management team again indicated they understood the issues but the profitably of the company came first and they wouldn't address these terms and conditions again.

Then, at the end of year, the MD indicated that there would not be any annual increase in pay or the traditional bonuses despite the record profits indicating the extra profits would be ploughed back into the business to maintain its profitability. These were addressed at the first consultative committee meeting in January 2021. The employees detected a harder edge to these claims from management who listened to their proposition for a modest pay increase in light of the profits or alternatively to pay overtime penalty rates. Management dismissed their claims inferring it was the pay increase/time off or the future of the organisation and ultimately their jobs. Noting they were already paid above market rates. This angered the employee committee members who were well aware of the large increase in profits and the long-term expectation of increased state and federal government investment in health care. It then became clear that the management were awarded bonuses for achieving such strong profit results.

At the next meeting in March 2021, management accused the employee representatives on the committee of causing unnecessary tension in the workplace. However, the employee representatives indicated that these issues were being raised in the monthly employee survey. It was also noted that the results of this survey - both good and bad aspects of the issues raised where no longer published on time. When they were, management only published the positive point that made management look good. This had resulted in less staff bothering to do the survey.

Several of the committee members are union members of the Australian Workers Union (AWU) and started to argue that they should have union representation - this started to gain momentum in the workplace as the workforce became increasingly unhappy with their terms and conditions stagnating whilst the company profits (and management bonuses) increased over previous years with strong prospects into the future. In the August 2021 meeting of the consultative committee, management announced a pay freeze for 2022- indicating that if the employee did not like it - they could always go somewhere else to work.

From this meeting the decision to unionize started to gain traction within the workforce. When management heard of this move to consider unionization by the workforce, they viewed this as aggressive and unnecessary believing it would damage employee - management relations, but they knew that in the midst of this booming market they had ignored the growing negative findings of the survey. Just as the HR manager was going to the discuss these issues with the MD, she received a call from the Australian Workers Union (AWU) representative. He told her the majority of the workforce had joined the union and he wanted to meet and discuss a range of grievances including excessive overtime, wage levels and working conditions. He also stated the AWU was prepared to lodge a formal dispute covering all of the issues and they would be prepared to escalate to the Fair Work Commission should management not genuinely engage on these matters.

How does the voice system evolve through the case study?