What Are Labor Relations and What Types Exist?
Within the field of human resources, what is referred to as labor relations is becoming increasingly important. This term is used to describe the interactions and bonds that exist between companies, organizations, and their employees. Do you want to know why labor relations are so important in the realm of HR and what trends are currently emerging? All the details are here!
Explaining what labor relations are involves referencing human resources within companies and organizations. This department has become essential in any business and is a key part of any business intelligence strategy, as it manages what is most valuable in a company: its people. Within HR, there are various areas of great interest, one of which is called labor relations.
The reader has probably heard of them, but do they really know what labor relations are and what their functions are within an organization?
What Are Labor Relations (LR)?
The concept of “labor relations” is based on three key units: the company and the work itself; the professional and the activity they carry out; and thirdly, the compensation, how that person is remunerated. Between these three, various interactions take place, and attention must also be paid to how relationships develop among employees within the same company, regarding works councils, if any, unions, etc.
Labor relations are therefore an essential part of human resources, and those entering this field should be trained in specific subjects, as offered in postgraduate and specialized HR programs. At EAE, we offer several training options, including two master’s programs that provide students with essential tools for performing this work.
- Master in Human Resources, a comprehensive program covering topics ranging from psychology to financial, legal, and marketing aspects. All these areas are “vital for efficient management” of the department, according to the EAE faculty.
- Master’s in Human Resources and Talent Management. More specialized and aimed at those aspiring to managerial positions.
Both programs address what LR is and the difference between human resources and labor relations, among other topics.
What Are Labor Relations For?
The functions of labor relations within a company or organization are varied. As mentioned, managing LR is key to the effective functioning of the company or institution. In response to the question 'what are labor relations for?', the following points can be highlighted:
- They regulate the legal relationship established between employers and employees:
- Working hours
- Salary
- Other aspects: geographic mobility, incentives/flexible compensation, workplace location, etc.
- They ensure that the rights and obligations established by contract are fulfilled by both parties.
When discussing what labor relations are and how they differ from human resources, it is essential to remember that the proper management of both, HR and labor relations, directly impacts the functioning of any company or organization. Effective management leads to higher employee satisfaction, which typically translates into increased business productivity.
Types of Labor Relations
There are different classifications when it comes to types of labor relations.
- Based on the employment contract governing the employer-employee relationship: permanent contract, work- and service-specific contract, temporary contract, apprenticeship contract, internship-based contract, full-time/part-time contract, etc.
- Depending on the location of the work: remote, from home, on-site, hybrid mode.
- Special labor relations. The Workers’ Statute includes certain professional roles regulated by specific legislation. For example:
- Domestic workers
- Senior executives
- Artists
- Professional athletes
- Employees with disabilities
- Port workers
- Prison inmates employed within correctional facilities
This last type of labor relation refers to the Workers’ Statute, knowledge essential for anyone pursuing a career in human resources and especially for those aiming to become labor relations experts. Mastery of this statute as well as special statutes is crucial. Collective agreements and agreements reached between works councils and unions are also of great importance.
Difference Between Human Resources and Labor Relations
HR and LR are closely related and interconnected in many aspects. Sometimes they are used interchangeably, but there is more than one difference between human resources and labor relations.
- Human resources primarily focus on managing and directing teams from a strategic perspective.
- Labor relations focus on legal and regulatory aspects, governing the terms that define the relationship between employer and employee, and company and hired worker.
- Human resources address the more “human” needs of employees: training programs, talent management, workplace well-being, etc.
- Labor relations specifically address compliance with contractual terms.
As noted, both areas are interconnected because proper management of each ensures employee well-being. Companies are increasingly dedicating resources and attention to this, which has led to a rise in job openings in these fields. A recent study by People Analytics Trends 2022 shows that the number of companies expanding their HR and LR teams has grown by 65%, with the trend continuing upward.
This data supports the idea that training in human resources and personnel management is an excellent decision. Organizations recognize the value of well-integrated teams with a strong sense of well-being and belonging. In this sense, labor relations is a field of high interest for those seeking to redirect their professional careers.
