Managerial prerogatives are also referred to as the functions and rights of management, is considered as the discretion of the employer or manager on how to manage its business, not bound by collective bargaining. 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 A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits (s ...

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. 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.

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. Its limitation lies in the policies, rules and regulations of different countries so that managerial prerogative must be fair and reasonable.

Manager's right to manage

The rights of managers include abiding by

professional ethics Professional ethics encompass the personal and corporate standards of behavior expected of professionals. The word professionalism originally applied to vows of a religious order. By no later than the year 1675, the term had seen secular appli ...

, 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.

Management views on prerogative

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

Property rights The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...

, in that the rights that management has had over their

capital asset A capital asset is defined as property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or i ...

s incurs this level of control and; #

Economic efficiency In microeconomics, economic efficiency, depending on the context, is usually one of the following two related concepts: * Allocative or Pareto efficiency: any changes made to assist one person would harm another. * Productive efficiency: no ad ...

, the argument that it is better to let management manage as they see fit for the benefit of all stakeholders. Both views center on the idea that more efficient work will occur if managers are allowed to use their prerogatives.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).

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. The function of trade unions is to place limits on managerial prerogatives. 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.

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.

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.Bowers, J. and Clarke A. (1981) 'Unfair Dismissal and Managerial Prerogative: A Study of Other Substantial Reason', HeinOnline, 10(), pp. 34 nlinehttp://heinonline.org/HOL/LandingPage?handle=hein.journals/indlj10&div=13&id=&page= (Accessed: October 15, 2014).

''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.Tufal, A. (n.d.) 'Cases of employers' liability', Law Teacher, (), pp. 1-18 nline Available at (Accessed: October 16, 2014).

Finland

In Finland, there is a clear reciprocation of trust between employers and employees.European industrial relations glossaries (2009) Employer's Managerial Prerogative, available at (Accessed: 14 October 2014). 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.Employer's Managerial Prerogative. 2014. nlineAvailable at . ccessed 15 October 2014

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.

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.

References

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