How do organisations and their workers manage their relationship, and what happens when it breaks down?
Employee relations: the role of trade unions, methods of resolving disputes (negotiation, ACAS, arbitration, works councils), and the forms of industrial action and their consequences.
An SQA Higher Business Management answer on employee relations, covering the role of trade unions, methods of resolving workplace disputes such as negotiation, ACAS, conciliation and arbitration and works councils, and the forms of industrial action and their consequences.
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What this key area is asking
Employee relations is the relationship between an organisation and its workforce, and how disputes are handled. The SQA wants you to know the role of trade unions, the methods of resolving disputes (negotiation, ACAS conciliation, arbitration, works councils), and the forms of industrial action and their consequences. Higher rewards you for explaining how disputes are resolved and the effects on both sides.
The role of trade unions
A union's main roles are: representation and negotiation (collective bargaining), support and protection of members in grievances and disputes, advice on rights and legislation, and campaigning for better pay, conditions and job security. If negotiations break down, the union may organise industrial action.
Methods of resolving disputes
When employees and the employer disagree (for example over pay or job cuts), several methods can resolve it without, or before, industrial action:
These methods move from the two sides solving it themselves (negotiation), to a third party helping them agree (conciliation), to a third party deciding for them (arbitration). Works councils are preventive, building good relations so disputes are less likely.
Industrial action and its consequences
If a dispute is not resolved, employees (usually through the union) may take industrial action to put pressure on the employer:
- Strike: workers stop work completely, the most serious form.
- Overtime ban: workers refuse to work beyond contracted hours.
- Work-to-rule: workers do only the minimum their contract requires, slowing things down.
- Go-slow: workers deliberately work slowly, cutting output.
Examples in context
Example 1. ACAS helping settle a dispute. When a pay dispute between a company and its union reaches deadlock, ACAS is brought in to conciliate, helping both sides talk and reach their own agreement, avoiding a strike. If they had instead agreed to arbitration, an independent arbitrator would have decided the outcome. This shows the difference between a third party that assists agreement (conciliation) and one that imposes a decision (arbitration), a common SQA distinction.
Example 2. The cost of a strike. When workers at a manufacturer strike over pay, the production line stops, the firm loses output and sales, misses customer orders (some customers switch to rivals), and its reputation suffers, while the striking workers lose pay and the relationship with management is damaged. Because both sides lose so much, both have a strong incentive to resolve disputes through negotiation and ACAS before action, illustrating why industrial action is a last resort.
Try this
Q1. Describe the role of a trade union. [2 marks]
- Cue. A trade union represents workers collectively and negotiates with employers (collective bargaining) over pay, hours and conditions, and supports and advises members in disputes, grievances and disciplinary matters, giving workers more power than as individuals.
Q2. Describe two methods, other than industrial action, of resolving a dispute between employees and an employer. [4 marks]
- Cue. Negotiation/collective bargaining (the two sides bargain directly); conciliation (ACAS helps them reach their own agreement); arbitration (an independent third party decides, binding if agreed); works councils (regular consultation to prevent disputes). Pick two and develop each.
Exam-style practice questions
Practice questions written in the style of SQA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
SQA Higher style4 marksDescribe the role of a trade union.Show worked answer →
Worth 4 marks. Describe what a trade union does for its members.
Representation and negotiation (about 2 marks). A trade union represents its members collectively and negotiates with employers on their behalf (collective bargaining) over pay, hours and working conditions, giving workers more power than they would have as individuals.
Support and protection (about 2 marks). It supports members in disputes, grievances and disciplinary matters, gives advice on employment rights and legislation, and can provide legal help. It campaigns to protect and improve members' jobs, safety and conditions, and may organise industrial action if negotiations fail.
SQA Higher style6 marksDescribe methods that could be used to resolve a dispute between employees and an employer, and the consequences of industrial action.Show worked answer →
Worth 6 marks. Describe methods of resolving disputes and the consequences of action.
Methods of resolving disputes (about 4 marks). Negotiation or collective bargaining between the union and employer to reach agreement; conciliation, where a third party such as ACAS helps the two sides reach their own agreement; arbitration, where an independent third party listens to both sides and makes a decision (binding if agreed in advance); and works councils, where employee and employer representatives meet regularly to consult and prevent disputes.
Consequences of industrial action (about 2 marks). Forms of action include a strike (stopping work), an overtime ban, a work-to-rule (doing only the minimum), or a go-slow. Consequences for the firm are lost production and sales, missed orders, lost customers and damaged reputation; for employees, lost pay and possible job losses; and relations between the two sides are damaged.
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Sources & how we know this
- Higher Business Management Course Specification — SQA (2026)
- Higher Business Management Course Code C810 76 — SQA (2026)