Managerial prerogative

Managerial prerogatives are also referred to as the functions and rights of management,[1] is considered as the discretion of the employer or manager on how to manage its business, not bound by collective bargaining.[2] It is a term that easily leads to widespread misunderstanding. Different circles have different interpretations of this term. When it is used in the trade unions circles, is perceived as a user's support for unilateral management power and can cause protests.When used by the management circle, It is considered as exclusive right and control right without interference.[1] Managerial prerogatives give employers or managers the power to control the direction in which their businesses are heading. Employees basically do not have this power.[3]

Managerial prerogative content

Managerial prerogative is that employers and managers can freely supervise according to their own judgments. Its effective exercise includes recruitment, employment, job distribution, job supervision, working methods, working hours, employee rules and regulations, employee supervision, employee transfer, employee sanctions, layoffs, employee dismissals, employee recalls, and other employment matters.[4] Its limitation lies in the policies, rules and regulations of different countries so that managerial prerogative must be fair and reasonable.[5]

Manager's right to manage

The rights of managers include abiding by professional ethics, complying with company regulations and industry laws, communicating organizational values, setting goals, implementing strategies, and conducting risk management. For employees, managers have the right to manage recruitment, performance evaluation, task allocation, punishment, dismissal. Managers are also responsible for providing a safe and healthy workplace for employees, actively communicating with employees, ensuring that employees are treated fairly, and providing training and professional development opportunities for employees.[6]

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.[7]

Both views center on the idea that more efficient work will occur if managers are allowed to use their prerogatives.[8]

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.[7] The function of trade unions is to place limits on managerial prerogatives.[9] 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.[8]

Practice of managerial prerogatives in different countries

Australia

In Australia, the industrial relations policies of the Howard government 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.[10]

United Kingdom

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.[11]

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.[12]

Finland

In Finland, there is a clear reciprocation of trust between employers and employees.[13] 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.[14]

Malaysia

In Malaysia, employers have the right to terminate employment under three circumstances. First, the employer has or intends to reduce or discontinue the business of the company in which the employee is employed; second, the employer has or intends to eliminate the business in the area in which the employee is employed; third, The employer has or intends to reduce or discontinue the business requirements in which the employee is engaged. In addition to the above three cases, the employer itself has the inherent right to restructure the enterprise, and no arbitration court will intervene unless the reorganization is proved to be conducted in bad faith or without reason.[15]

Unfair dismissal and managerial prerogative

Unfair dismissal occurs when employers or managers use their prerogatives to fire employees for reasons specified by them, and these reasons are improper or insufficient to justify the dismissal. Managerial prerogatives give employers and managers the right to dismiss employees. The Unfair Dismissal Law gives employees the right to protect themselves and to claim compensation if they are unfairly dismissed. The specific prerogatives and laws vary according to the national conditions and relevant regulations of each country.[16]

References

Storey, Dr John (1976). "Workplace collective bargaining and managerial prerogatives". Industrial Relations Journal. 7 (4): 40–55. doi:10.1111/j.1468-2338.1976.tb00197.x. ISSN 1468-2338.
Heery, Edmund (2017). A dictionary of human resource management. Mike Noon. Oxford: Oxford University Press. ISBN 978-0-19-182782-2. OCLC 991851463.
"What is MANAGEMENT PREROGATIVE? definition of MANAGEMENT PREROGATIVE (Black's Law Dictionary)". The Law Dictionary. 2012-10-19. Retrieved 2021-04-24.
Richard, Marshall, Shelley Mitchell (2006). Enterprise bargaining, managerial prerogative and the protection of workers' rights : an argument on the role of law and regulatory strategy in Australia under the Workplace Relations Act 1996 (Cth). Kluwer Law International. OCLC 696499641.{{cite book}}: CS1 maint: multiple names: authors list (link)
Clapp, Richard (1953-01-01). "Management's Prerogatives vs. Labor's Rights". Case Western Reserve Law Review. 4 (2): 169. ISSN 0008-7262.
Spanner, Robert Alan. Who owns innovation? : the rights and obligations of employers and employees. ISBN 0-87094-440-1. OCLC 11486472.
Storey, J (1983). Managerial Prerogative and the Question of Control. London: Routledge & Kegan Paul Plc.
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).
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.{{cite web}}: CS1 maint: archived copy as title (link) (Accessed: October 16, 2014).
European industrial relations glossaries (2009) Employer's Managerial Prerogative, available at "Employer's Managerial Prerogative". Archived from the original on 2014-10-22. Retrieved 2014-10-17. (Accessed: 14 October 2014).
Employer's Managerial Prerogative. 2014. [Online] Available at "Employer's Managerial Prerogative". Archived from the original on 2014-10-22. Retrieved 2014-10-17.. [Accessed 15 October 2014].
Rejab, Hassan, Mumtaj Hussain, Mohammad Azam Md Desa, Md (2016). The managerial prerogative on retrenchment in Malaysia. OCLC 1025320320.{{cite book}}: CS1 maint: multiple names: authors list (link)
Bowers, John; Clarke, Andrew (1981). "Unfair Dismissal and Managerial Prerogative: A Study of "Other Substantial Reason"". Industrial Law Journal. 10 (1): 34–44. doi:10.1093/ilj/10.1.34. ISSN 0305-9332.

Managerial prerogative