Managerial prerogative

Managerial prerogatives are considered natural rights that allow employers to manage their employees.[1] They are the discretionary powers left at any moment in the hands of managers. Every act which a manager or his subordinates can lawfully do, without the consent of the worker organization, is done by virtue of this prerogative.[2] Consequently, employee’s are unable to negotiate with them on terms and conditions.[3] For this reason, trade unions work to aid employees as well as control and regulate these prerogatives. Managerial prerogatives give managers the power to control the direction in which their businesses are heading. Employees do not have this power. Managers of various types of businesses practice their managerial rights. [4]

Overview

Essentially, it is an area of managerial decision-making where managers believe they have exclusive rights to make decisions, and therefore resist any interference with that control.[2] These decisions include the employer’s right to hire, dismiss, promote, and demote employees as they see fit. This gives employers freedom to run their own business. However, governmental laws surrounding business ethics state that employers are expected to have sound judgment when practicing these rights.[1] Managerial prerogatives have been one of the most divisive factors between labor and management, due to the managed workers making an effort to challenge the authority of the manager, and the manager attempts to maintain control.[5] In the context of most modern employment relationships, there are large, hierarchical, and complex organizations where an element of subordination and discipline exists.[2]

Manager's right to manage

The manager's right to manage is the legitimation in capitalism, or other industrial societies, of the disciplinary powers that managers claim over workers. It is fundamentally related to the property rights of the person claiming to own particular means and tools of production, and their agents to act on their behalf, in directing wage labourers to perform duties. Closely related to the Master and servant relationship in industrial law, the manager's right to manage is often contested by day to day industrial resistance, or organised bodies of workers, such as revolutionary industrial unions.

Management views on prerogative

The two streams of argument from management relate the primacy of market rationality. They are:

Property rights, in that the rights that management has had over their capital assets incurs this level of control and;
Economic efficiency, the argument that it is better to let management manage as they see fit for the benefit of all stakeholders.[2]

Both views center on the idea that more efficient work will occur if managers are allowed to use their prerogatives.[4]

Trade union views on prerogative

Many workers and their representatives do acknowledge part of management’s role to manage. They often do not describe it as a right of management, but as part of the job managers are paid to do. Management use this term to defend their role, but also trade unions use this time to place an element of responsibility upon management.[2] The function of trade unions is to place limits on managerial prerogatives.[6] Trade unions protect employees by referring to their worker’s rights as well as their human rights. Without trade unions, managers have full power to practice their rights. Recent laws are imposing rules that employers have to use their prerogatives with good faith. [4]

Practice of managerial prerogatives in different countries

Australia

The industrial relations policies of the Howard government in Australia during its initial terms increased the exercise of managerial prerogative by reducing the scope and importance of awards, encouraging decentralized enterprise bargaining, and reducing the power of unions and promoting individual contracts.[7]

United Kingdom

Control was the essential managerial function in the time of industrialism in all countries and social systems.[2] In the UK, there are constraints on managerial prerogative rights mainly pertaining to the right of firing employees. In order to successfully dismiss a worker, the manager must provide sufficient evidence that his decision to fire was fair to all parties. This is judged in a court of law.[8]

Johnstone v Bloomsbury: Health Authority

Johnstone v Bloomsbury: Health Authority is an example of managerial prerogatives used in an abusive manner. Dr. Johnstone had been asked to work for a set time per week and also be ready when asked to work for additional hours. This was abused when his manager asked him to work inhumane hours, affecting Johnstone’s health and well-being. His manager was able to impose these hours on Dr. Johnstone but there are human rights in the UK that protect Johnstone and his health.[9]

Finland

In Finland, there is a clear reciprocation of trust between employers and employees.[10] The employees are expected to show a certain level of subordination to the employer as well as respect secondary duties such as following instructions given to them by employers. Loyalty is also seen as an essential part of most businesses in Finland, and it is seen as a secondary duty as well.[11]

Unfair dismissal and managerial prerogative

Managers use their prerogatives to dismiss or fire employees for reasons specified by them. If these reasons are not enough to defend the dismissal, then this situation is considered an unfair dismissal. Managerial prerogatives give managers the ability to dismiss employees. These prerogatives vary from country to country. Manager rights sometimes from company to company within the same country.[8]

References

Management Prerogative Law Law & Legal Definition. 2014. Management Prerogative Law Law & Legal Definition. [Online] Available at http://definitions.uslegal.com/m/management-prerogative-law/. [Accessed 14 October 2014].
Storey, J (1983). Managerial Prerogative and the Question of Control. London: Routledge & Kegan Paul Plc.
Definition of Management Prerogative (Black's Law Dictionary). 2014. [Online] http://thelawdictionary.org/management-prerogative/. [Accessed 15 October 2014].
Ellis, A. (2014) The strain between managerial prerogative and contractual principles in English labour law, Available at http://www.workplacebullying.co.uk/lawyouind/manperog.html (Accessed: October 14, 2014).
Perline, Martin M.; Poynter, David J. "Union and Management Perceptions of Managerial Prerogatives: Some insight into the future of co-operative bargaining in the USA". British Journal of Industrial Relations (Blackwell Publishing / London School of Economics) 28 (2): 179–196. doi:10.1111/j.1467-8543.1990.tb00362.x.
Young, Stanley (1 January 1963). "The Question of Managerial Prerogatives". Industrial and Labor Relations Review. 16 (2): 240–253. doi:10.2307/2520944. JSTOR 2520944.
Bray, Mark; Waring, Peter (2006). "The Rise of Managerial Prerogative under the Howard Government". Australian Bulletin of Labor. 32 (1): 45–61. ISSN 0311-6336.
Bowers, J. and Clarke A. (1981) 'Unfair Dismissal and Managerial Prerogative: A Study of Other Substantial Reason', HeinOnline, 10(), pp. 34 [Online] http://heinonline.org/HOL/LandingPage?handle=hein.journals/indlj10&div=13&id=&page= (Accessed: October 15, 2014).
Tufal, A. (n.d.) 'Cases of employers' liability', Law Teacher, (), pp. 1-18 [Online]. Available at "Archived copy" (PDF). Archived from the original (PDF) on 2012-11-19. Retrieved 2014-10-29.CS1 maint: archived copy as title (link) (Accessed: October 16, 2014).
European industrial relations glossaries (2009) Employer's Managerial Prerogative, available at "Archived copy". Archived from the original on 2014-10-22. Retrieved 2014-10-17.CS1 maint: archived copy as title (link) (Accessed: 14 October, 2014).
Employer's Managerial Prerogative. 2014. [Online] Available at "Archived copy". Archived from the original on 2014-10-22. Retrieved 2014-10-17.CS1 maint: archived copy as title (link). [Accessed 15 October 2014].