Published - 2/10/2014

Legal arrangements governing employment take many forms. About 60 percent of all employees have a written employment contract that defines the conditions and requirements of their job. However, while virtually all unionized workers have a written contract, this may not be the case with non-unionized workers, many of whom have only a verbal agreement with their employer.
Employees who have below average earnings or education are most likely to have only a verbal agreement – adding to their vulnerability in the labour market.

Third parties can shape the form and content of employment relationships. However, looking only at the level of union membership in the workforce understates the forms of collective representation available to employees. While 23 percent of employees are unionized in New Zealand.

However union membership is associated with weaker employment relationships on all dimensions. This may reflect higher expectations and awareness among union members of relations with their employer. Unions also may add transparency to the conflicts of interest between workers and employers.
Furthermore, the strength of employment relationships has important consequences for individuals, employers and unions. Strong employment relationships are the key determinant of job satisfaction among employees. Not only does job satisfaction reflect a person's overall quality of working life, it also linked to a range of outcomes important for employers including productivity and profitability. This supports the creation of human capital, which is essential for both individual well-being and a healthy economy.

Weak employment relationships contribute to turnover which explains why employees look for a job with another employer and even accept a lesser pay. Thus employers face recruitment and retention challenges and compete for talent in a tight labour market need to pay careful attention to employment relationships and employment practices.

Employees in weak employment relationships are more than twice as likely to want to join a union as those in strong relationships. The employment law station believes that unionism is a cry out for stronger employment relationships.

Some unions view "new" human resources management strategies that cultivate trust, commitment, and employee involvement as anti-union. Yet this poses a problem because employees benefit from stronger trust and commitment in their employment relationships. This dilemma highlights how the future of unions in part hinges on their ability to address employment relationship issues or better still their willingness to embrace innovative approaches such as prevention is better than cure approach.

Legislation and regulations governing employment standards, collective bargaining, health and safety, and workers' compensation were designed to combat disputes. Consequently, the protections they provide are available to a diminishing number of workers.
Policies promoting lifelong learning will need to reach beyond the educated elite of "knowledge workers." If knowledge workers, rather than manual and service workers in routine jobs, are beneficiaries of "good" employment practices then this raises the challenge on employment practice. In the age of ideas, prevention is better than cure.