Employee Relations: Importance, Laws, Rights, Duties, and Obligations

This document discusses the value and importance of employee relations, fundamentals of employment laws, and the rights, duties, and obligations of employees and employers. It also explores the impact of employee relations on stakeholders. The case study focuses on Tesco, a British multinational retailer.

Employee Relations

Table of Contents
Employee Relations.........................................................................................................................1
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Value and Importance of Employee Relations.......................................................................1
P2 Fundamentals of Employment Laws......................................................................................3
LO2..................................................................................................................................................4
P3 Right, Duties and Obligation of Employee and Employer.....................................................4
P4 Advice relating to Right, Duties and Obligations of Employment Relations.........................6
LO3 .................................................................................................................................................7
P5 Stakeholder Analysis..............................................................................................................7
LO 4.................................................................................................................................................8
P6 Effect of employee relationship on stakeholders....................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Employee relations refers to relations that exist between employer and employee
individually and collectively. These relations need to be positive and harmonious if organisation
want so succeed. This relation have various elements that are required to be in favourable
condition if organisation want to succeed and for that it need to keep it employees happy and
satisfied with their job and organisational culture. This report discuss importance of employee
relations and what organisation can do to keep in harmonious. The discussion have been based
on Tesco, British multinational retailer headquartered at Hertfordshire, England, United
Kingdom. In context with Tesco it increases its importance as most of the employees of Tesco
are in direct connection with employees and when company do not maintain good relations with
employees it may affect their performance and which will directly affect their customer count
and customer satisfaction. Moreover this report includes principles of employee relations. In
context with employee relations and their positivity only employer and management is not
responsible but employee also have to pay equal contribution and in this regard rights, duties and
obligation of employment relations have also been included in this report.
LO 1
P1 Value and Importance of Employee Relations
To understand employee relations and its importance it can be said that organisation can
purchase best material for production, latest technology and employ best strategy but does not
link any human factor with these will ant of this will remain useful the answer is NO. This same
thought can be seen in different perspective that organisation have best of everything but does
not have good relations with employees and that is why employees does not perform well and
organisation cannot get adequate return and output from its investment. Both of these statements
clarify importance of employee and employee relations (Eldor and Vigoda-Gadot, 2017). An
important element of employee relation also includes relations of employees with their fellow
workers and human beings being human do need to have healthy relations with their employees
so that they can talk to them and feel satisfied for having a social life.
Value of Employee Relation-
For Organization- Positive and harmonious employee relations are very important and valuable
for organization and its stakeholders in a way that if employee relations are good it will develop
a positive and friendly atmosphere at organization for everyone to contribute their best efforts.
1

These efforts will consequently increase profitability of organization. As same harmonize
employees plays significant role in organisation.
For example: Harmonize employees also known as coordinate employee who provides supports
organization in each circumstance, and they also resolve conflicts of other employee by
communicating them as team. That's why Tesco gives values to their employee's by meeting
their objectives.
For Employee- Good relations with employer and management is required for employees as
much as they are important and valuable for organization (Olsen and et.al., 2016). Employees are
able to work in a positive environment and honest efforts of employee contribute to their growth
in organization.
Importance of Employee Relations
Work becomes easy- Harmonious employee relations make easy to work in organisation for
everyone including management. This helps to remove all kind of ambiguity and make it easy for
employees to ask for help relating to any concern.
Innovation- Innovation has become an essential factor for success in present business
environment and for that employee relations are very important. To justify this it can be said that
one important element of employee relations is trust and when employees are trusted by
organisation they provide their suggestion and organisation also accept and implement those
suggestions as appropriate and this is biggest source of ideas and innovation in organisation that
contribute to success of organisation.
Goodwill and Competent Manpower- Positive employee relations are very important for
goodwill and positive image of the organisation and employees of such organisations are its
important brand ambassador (Thornthwaite, 2016). This also attract competent manpower toward
organisation and organisation can have best employees available in job market. Having best
employees is also important as they are able to use resources to its best potential.
In context with Tesco all these factors are applicable and Tesco also needs to maintain good
employee relations. There are some other reasons that make it important for Tesco to have ggod
employee relations.
Tesco being a retail organisation have its stores and employ a large number of employees to
work in those stores as store manager and their subordinates which are based on the basis of
departments in store and every store employs most number of employees in form of customer
2

assistants. These assistants are directly work with customers of the organisation and if employees
relations are not good in the organisation then their performance will directly impact customer
satisfaction which will impact customer loyalty and brand value that customers possess all of
these in result will affect profitability and productivity of organisation.
P2 Fundamentals of Employment Laws
Employment that regulates employee-employer relations in organisational context and
govern employers attitude towards employee. These laws have been made for safeguarding
interest of employee and that of employer so that employer cannot do any wrongful activity that
harm employee and their interest and employee can also not claim employer for any right
decision taken by employer that harm employees' interest. Law provides clear specification about
rights, duties and obligation of both the parties towards each other. There are various laws that
are applicable in different type of organisational scenario (Aylott, 2018). In context with Tesco
which is retail organisation laws that are applicable to Tesco in context with employment are as
follows-
Hiring and Terminating Employees
Most important aspect of employment laws provide specific guidelines for hiring and
terminating employees. This requires compliance with regulations like criminal background
check, what are the rules regarding that when it comes to hire employees. Termination of
employment is another important aspect of employment law provides specific guidelines for
termination of employment in various conditions in such case rules for general termination by
employee, termination in case of lay-off and for forceful termination by employer are different
and organisation have to consider legalities in every kind of situation. Hiring and firing of
employees in Tesco is governed by the Employment and labour law. For example Tesco cannot
discriminate employees while hiring or firing in terms of race, gender, class, culture, religion etc.
In this Tesco is required to follow Employment Right Act, 1996 according to which Tesco
cannot dismiss any of its employee without giving notice and valid reason for dismissal
(Employment Rights Act 1996, 2019). These reasons have been mentioned in Part X of
Employment Right Act, 1996.
Wages and Working Hours
Another important consideration is Wages or remuneration or which employees work in
any organisation. Monetary reward given to employees in exchange for their services to
3

organisation (Rosin, 2017). To ensure that employees get adequate remuneration for their service
to organisation national minimum wage Act, 1998 provides specification for minimum wage for
different type of employees and in consideration with their respective age. Contracts of
employment come under Contract Law and the minimum wage in UK at present is £8.21 per
hour which is also known as national living wage.
Discipline, Dismissal and Grievances
This element of employment laws provide specifications to employees about disciplinary
guidelines they are required to follow at organisation which includes various factors like
professional conduct at organisation, relations with fellow employees, reporting to senior,
application for leave, timings and their appearance and dress code. Dismissal specifies the
conditions on the basis of which employees will be dismissed from the organisation and what are
the conditions that are required to followed before they decide to resign Laws of unfair dismissal
are also applicable to Tesco. Grievance regulating laws specifies how employees can register
grievance and how their grievance will be dealt in organisation. Which authority deal with
grievance this is need to be decided by organisation and same need to be communicated to
employee.
Discrimination Laws
Laws that govern and restrict all kind of discrimination that organisation may exercise
over its employees on the basis of gender, nationality, ethnicity and most importantly disabilities
of employees. Tesco have to ensure that it avoid all kind of discrimination that can create legal
difficulties for it. Tesco who have faced such difficulties on the ground of age and gender based
discrimination and discriminated pay (Prowse, Lopes and Fells, 2017). This law ensures that all
the employees who are working or dame profile and have equal qualification need to be paid
equally. Equity Act 2010 provides guidelines according to this act Tesco have to ensure that its
practices do not discriminate its workers and treatment they receive at workplace on the basis of
gender and race (Equality Act 2010 - discrimination and your rights, 2020.). Tesco need to
ensure that all its employees who are disabled are well accommodated to combat social
exclusion.
4

LO2
P3 Right, Duties and Obligation of Employee and Employer
Employee relations that are important for both employee and employer and maintaining
them for harmony and peace requires contribution of both employee and employer. This requires
that both parties have their own rights that they can exercise whenever required and they feel
their interest have been compromised and along with rights both parties do have their duties and
obligation towards each other. In an ideal situation rights are not being compromised and duties
and obligation are being fulfilled in correct manner (Cavico, Mujtaba and Muffler, 2018). This
will help in maintaining good employee relations in Tesco. Rights, duties and obligation of both
the parties in relation with Tesco are as follows-
Rights, Duties and Obligations Employees-
Rights-
 Employees have right to get adequate and fair remuneration which has been decided at
the time of joining. Their pay need to be equal and whatever is being paid to the
employee working at similar post and having equal and similar qualification.
 All the employees have right to get adequate paid leaves by employer. Structure and
number of paid leaves need to be as per employment laws. All the employees have right to be treated equally and not be discriminated on the basis
of gender, age and nationality and any other characteristic.
Duties and obligations-
 Employees' first duty is that they obey all the orders that are reasonable and lawful and
are within terms of employment whether expressed or implied.
 Employees have a duty that they serve the organisation faithfully and the trust that have
been placed on them while hiring they need to make sure that their action do not
undertake anything that break that trust and job responsibilities are fulfilled in best
possible manner.
 Employees need to perform their work with reasonable care and give due diligence need
to be given to work and instructions that are required to be followed to perform the work
(Tavits, 2018).
 Employees in any condition accept required by law can not and should not disclose secret
of trade and the activities undertaken by their organisation.
5

 Employees should avoid practices that are covered in fraud and cheating. Employees
need to be ethical in their work and for their organisation.
Rights, Duties and Obligation of Employer-
Rights-
 Employers have right to develop code of conduct that is required to be followed by
employees at workplace and outside it whenever and however concerned.
 Employers have a right to terminate employees from their employment if they are found
to be guilty of any offence or serious negligence. Employers have right to promote employees if they are found to be eligible and the
criteria for promotion assessment is valid and ethical.
Duties and Obligation-
 Employers are required to provide all the resources and equipments that are required for
employees to perform their duties.
 Employees are required to monitor health and safety of employees and also ensure that
workplace is safe for employees.
 To provide adequate information and proper information which is required to employees
(Caldwell and Peters, 2018). So, they can fulfil their job responsibilities.
These were some rights that employees and employers can exercise and some of the duties and
obligations that are required to be fulfilled by employer/Tesco.
Breaking legally binding rights and duties can have both positive and negative
implications on both employer and employee. For employer it can result in damage award to
employee which may harm the image of the company which may result in huge loss and can also
result in the negative brand image of Tesco. On the other hand for employee breaking a legal
binding may result in termination from the job and may have to fine. For example employer hires
the employee for a contract for 1 year and enters in the legal binding. But if employer illegally
fire the employee this may have a negative implication on employer. Similarly if after entering in
the legal binding and employee wants to break the binding this may result in termination of job
for which may have to fine.
P4 Advice relating to Right, Duties and Obligations of Employment Relations
Employment and relations provide right and relations to employee and to employer. In an
ideal condition of employee-employer relation in Tesco situation will be such that employer and
6

employees are able to and well-equipped to exercise their rights and completely willing and
faithfully fulfilling their duties and obligation. In relation with there are some recommendations
according to which most important factor is
Psychological Contract which is more important than paper and documented contract. When
employee and employer have a psychological contract they can fulfil their responsibilities more
effectively, and they are clearer about their responsibilities and do not have to see their duties in
their contract (Fields and Cheeseman, 2016). Psychological contract also increase commitment
of employees and employer towards each other that contribute to maintain good relations and
increase harmony between both the parties. With psychological contract comes the main factor
which is Work Life Balance. This can have a strong impact on the work life balance of an
employees as they have to maintain the balance between work life and personal life. If
employees feel that they are not able to maintain the balance this may result in resignation from
the job.
Support each other when rights, duties and responsibilities are provided adequate attention it is
visible that what are the rights of employees are responsibilities of employer and what are the
rights of employer are responsibilities of employee. This requires that both employer and
employee support each other in fulfilling each others' responsibilities and at the same time both
are required to support each other so that they can exercise their rights adequately. For instance
good working conditions are right of employees and providing good working conditions is
responsibility of employees. In the same context employers have right to develop code of
conduct and employees are duty bound to follow that code of conduct.
In light of Law whatever are the rights and responsibilities of the employee and employer they
all should be according to law and according to provision that are included in various laws that
govern and regulate employment. When rights and responsibilities are developed according to
law it provides machinery to employees and employer to take corrective actions for them against
each other.
Proper Administration employees and employers are required to properly administer all the
rights and responsibilities. Both the parties are required to have proper knowledge of each others'
rights and responsibilities (Bachman, Siegle and Pace, 2017). This is required so that they can
assist each other and their rights do not get affected because of other party and other party's
rights do not get affected because of them and so with the duties and obligation. This is
7

important to maintain good relations and avoid any actor that can avoid factor that can affect
their relations negatively. This is more about rights that whenever rights are affected negatively
chances of strict and strong actions increase. For instance whenever rights of employees are
selected chances increase that employee will take legal action against employees, this will
automatically harm their relation. So, this is wise that both parties can exercise their rights as
they are without being affected.
Most important element and recommendation regarding this is that no element and factor should
be hidden and which is not known to other party this is a biggest threat to their good relations in
Tesco.
From the above factors the most important factor which has a strong impact is proper
administration. The reason behind this is that if company has a proper administration its can
result in smooth business activities in the workplace. Due to the proper administration proper
rules and regulations will be followed which can result in less grievances from and will also
increase job satisfaction. Proper administration can help Tesco in managing and addressing all
issues in an effective manner which can result in smooth functionality of a business.
LO3
P5 Stakeholder Analysis
Stakeholders of Tesco are those parties who are directly or indirectly related with Tesco.
Directly related parties are employees, customers, shareholders and indirectly related parties are
society at large, financial firms etc. stakeholders are divided in two parts that is internal
stakeholders and external stakeholders.
Internal Stakeholders
Stakeholder’s Name Power Interest Engagement Strategy
Board of Directors Board of Directors is
another factor that
affects employment
relations. Their effect in
this relationship is
visible from their
policies and guidelines
that are concerned with
The main purpose
of the board
director to lead
high prosperity in
organization by
meeting
shareholders and
stakeholders.
Board of director is
the group or team of
member who is
responsible for
strategic management.
The director plays
various function such
as recruitment,
8

employment relations.
Director introdues
variopus profitable and
non-profitable strategies
for employees so that
good relation establishes
between employees and
management.
supervising, retaining,
evaluating and assist
to manager. Thus
board of director
handles whole
function in Tesco.
Employees Tesco puts its employees
at its heart. Employment
relations are affected by
employees and
employees are most
important and
responsible for
improving employment
relations at Tesco.
Employee are assets for
the organization because
they lead prosperity by
offering best services at
workplace.
Employee wants
transparency in
decision-making by
employers, career
goals. Beside of
this employee
requires friendly
atmosphere at
workplace so that
their well-being is
maintained.(Power,
2016).(Power,
2016).
Whateer strategies
offers by manager for
employees where
employees give their
involvement and make
that successful. For
exmple skill and
devlopment classes
organizes by manager
so that they lears new
tricks and skills. On
other hand employees
give their involvement
and learns skills.
Managers Managers are also
equally responsible for
improving and
maintaining good
relations of employment.
Most important relation
employees have is with
managers increasing
their responsibility
To align each
department
systemically in
Tesco so that
enables to take
competitive
adva(Power,
2016).ntage in
business market.
Manager introduces
various staegies for
organization so that
profitability generate
in company and
involves employees in
decision-making as
result they get values
and retain in company
9

(Power, 2016). prolong time.
Shareholders Shareholders are also
major beneficiaries of
good employee relations
in Tesco reason behind
is that they are owners
of the company and
profit of the company is
earned by them and
when good employee
relations contribute to
higher productivity and
profitability then
shareholders will be
directly benefited.
Major shareholders of
Tesco are BlackRock,
Inc., Norges Bank, and
Schroders plc.
Shareholder
expects economical
benefit from partner
company. While
tesco meets their
objectives to shares
benefits of
company.
Shareholder supports
organization to
promote business in
large scale by
investing money.
External Stakeholders
Suppliers Supplier plays important
role in tesco company
because they supply
food and non-food item
to employees and leads
financial benefits in
organization.
To meet their
requirements and
transparency in
decision.
Whatever policies
applies by Tesco, they
follow and leads
benefits in company.
Government Government plays vital
role in organization
because Tesco is UK
company where
To meets their
requirements and
public health.
Whatever strategies
applies Tesco for
product development,
government gives
10

government stable so
Tesco doesn't have to
high tax.
involvement.
Investors Investor are right hand
for Tesco because thy
helps organization
whenever neds of
money.
Profitability of the
invest money so
that get high GDP
rate in organization.
Identify the right
stakeholder who gives
gainfulness in
company.
LO 4
P6 Effect of employee relationship on stakeholders
Stakeholders of a company are customers, communities, employees, owners, suppliers and
partners, government agencies and regulators. Strong relationships of employee is beneficial to
various stakeholders for long-term profit and business success. The employee relationship may
affect positively or negatively to different shareholders of the company. The positive effects of
strong employee relation on different shareholders are as follows:
Productivity: The profit of the increases due to strong inter relationship between employee as it
brings a feeling of belongingness. The morale of the employee and also increases there are
motivated to work effectively thus help in increasing productivity and profit margin of the
company. On the contrary the productivity decreases due to weak inter relationship and
decreases profit margin. Thus, it affects the shareholder and investors of the company they are
not likely to invest in such companies where the profit margin of the is less.
Employee Loyalty: The loyalty of the employee increases due to pleasant work environment
and creative productivity and it also helps in retention of employee in an organization. So, it
reduces the cost of recruitment, training of new employee and enhance the profit margin of
company. Thus, it affects the shareholder, customer and employee as it increase in the cost of
production and less profit is able to shareholder and investor and its also effect the image so less
customer will be interest to make purchase.
Conflicts: There are less chance of conflict due to strong relationship between the employee thus
it will help the employee to focus on their work. Thus, this also help the Tesco in attainment of
its objectives by increasing the efficiency of employees in the organization. On the other hand, if
11

the company is not able to maintain strong relationship it will result conflict among employee
and this will reduce there efficiency. Thus, it will affect the employee, shareholder, supplier as
due to conflict the company employee would be not able to work effectively and many employee
leave the organization due to unhealthy working environment
Profit: It helps in increasing profit margin of the Tesco due to high morale and motivation the
employee work effectively for attainment of organization goals. As happy and satisfied
employee provide good services to its customer and work together as a team. On the contrary if
the company is not able to maintain good relation among employee it would lead to reduction of
their morale and there are less motivated to work effectively. Thus, it decreases the productivity
of employee and reduces profit margin. The investor, shareholder are interested in the profit of
the company so it should have strong relationship in order to enjoy profit of the company.
Brand image: Strong relationship build the image of the brand as the employee are more
satisfied and interested to work in an organization in friendly environment. Satisfied and highly
motivated employee offers good customer service thus help in achievement of customer loyalty
and build image of the company. On contrary if the employee doesn't have strong relationship
the image of company decreases. Thus, also affect the shareholder, employee and customer of
the company.
CONCLUSION
On the basis of above discussion it can be concluded that employment relations are
natural and their existence in organisation is unintentional and establish from the time employee
is hired in an organisation. What can be consciously is to make these relations good and
harmonious for the benefit of employee and employer both and as vital for organisation. Report
included discussion over various factors that are related to employee relations which are its value
and importance for both the parties and impact of fundamental employment laws on this
relationship. Discussion also includes various rights, duties and obligation of employee and
employer and their relation with employment relations. Recommendations regarding these rights,
duties and obligation have also been included in discussion. Lastly report also includes analysis
of various stakeholders of Tesco and their impact on employment relations and impact of
employee relations on Tesco's stakeholders. From this discussion it is visible that in every
situation and for everyone it is important that employment relations need to be harmonious and
good and favourable for both the parties namely employee and employer than only it can give
12

benefit and generate results in favour of Tesco and its major stakeholder except competitors of
Tesco.
REFERENCES
Books and Journals
Andriof, J. and Waddock, S., 2017. Unfolding stakeholder engagement. In Unfolding stakeholder
thinking. (pp. 19-42). Routledge.
Aylott, E., 2018. Employment Law: A Practical Introduction. Kogan Page Publishers.
Bachman, J., Siegle, A. and Pace, E., 2017. Employee assistance programs. Addiction at Work:
Tackling Drug Use and Misuse in the Workplace.
Caldwell, C. and Peters, R., 2018. New employee onboarding–psychological contracts and
ethical perspectives. Journal of Management Development. 37(1). pp.27-39.
Cavico, F.J., Mujtaba, B.G. and Muffler, S., 2018. The Duty of Loyalty in the Employment
Relationship: Legal Analysis and Recommendations for Employers and Workers.
Journal of Legal, Ethical and Regulatory Issues. 21(3). pp.1-27.
Duan, J., Wong, M. and Yue, Y., 2019. Organizational helping behavior and its relationship with
employee workplace well-being. Career Development International. 24(1). pp.18-36.
Eldor, L. and Vigoda-Gadot, E., 2017. The nature of employee engagement: Rethinking the
employee–organization relationship. The International Journal of Human Resource
Management. 28(3). pp.526-552.
Fields, C.K. and Cheeseman, H.R., 2016. Contemporary Employment Law. Wolters Kluwer Law
& Business.
13

Olsen, K.M and et.al., 2016. Multiple foci of commitment in a professional service firm:
balancing complex employment relations. Human Resource Management Journal.
26(4). pp.390-407.
Power, H.I.H., 2016. Stakeholder Analysis.
Prowse, P., Lopes, A. and Fells, R., 2017. Community and union-led living wage campaigns.
Employee Relations. 39(6). pp.825-839.
Pyc, L.S., Meltzer, D.P. and Liu, C., 2017. Ineffective leadership and employees’ negative
outcomes: The mediating effect of anxiety and depression. International journal of
stress management. 24(2). p.196.
Rosin, A., 2017. Labour Law Protection of Trainees.
Smith, S. and Diedericks, E., 2016. Positive employment relations: A qualitative meta-synthesis
of the evidence. Journal of Psychology in Africa. 26(6). pp.527-534.
Tavits, G., 2018. Tasks and Responsibilities of an Employer in a Digital Age: How to Comply
with Applicable Requirements for Work Conditions. Juridica Int'l. 27. p.79.
Thornthwaite, L., 2016. Chilling times: social media policies, labour law and employment
relations. Asia Pacific Journal of Human Resources. 54(3). pp.332-351.
Online
Stakeholders of Tesco. 2017. [Online]. Available through
<https://www.howandwhat.net/competitors-tesco-tesco-competitors/>.
Rights and Responsibilities of Employers and Employees. 2020. [Online]. Available Through:
<https://www.educaloi.qc.ca/en/capsules/rights-and-responsibilities-employers-and-
employees>.
Equality Act 2010 - discrimination and your rights. 2020. [Online]. Available through:
<https://www.citizensadvice.org.uk/law-and-courts/discrimination/about-
discrimination/equality-act-2010-discrimination-and-your-rights/>.
Employment Rights Act 1996. 2019. [Online]. Available through:
<https://employment.laws.com/employment-rights-act-1996>.
14