Human Resource Management and Union Relations in a State Owned Bank

Introduction

In a government bank environment, Human Resource Management (HRM) plays a vital role in balancing the needs of both employees and management. When employees are unionised—as is common in state‑owned banks in Sri Lanka—the relationship between HRM and trade unions becomes especially important. This relationship influences morale, productivity and organisational harmony.

HRM’s Role in a Unionised Bank

    In a government bank setting, HR tasks include recruitment, training, performance evaluations, promotions, rotations, and grievance handling—all while maintaining stable relations with unions. For example, HR departments in Sri Lankan public banks often coordinate directly with union representatives to ensure that both seniority rules and merit, as well as union agreements, are respected (Sawithri, Nishanthi & Amarasinghe, 2017).

    Trade unions act as the collective voice of employees. They often negotiate salaries, benefits and working conditions for thousands of members. In this pluralist environment, where unions have strong influence, HRM must adopt a fair and transparent approach that recognises both management interests and employee rights (Dhammika, 2010).

The Strategic Importance of HR‑Union Relations

    The quality of the HRM‑union relationship significantly impacts organisational commitment and productivity. A Sri Lankan study found that stronger line‑manager relationships and higher trust in senior management were significantly associated with higher employee commitment among unionised workers (Sawithri et al., 2017).

However, HRM in a unionised government bank must handle specific challenges:

• Aligning union demands (for higher salary or benefits) with the bank’s financial constraints and regulatory environment.
• Ensuring HR practices are fair, consistent, and transparent so that both union and non‑union members feel equally treated.
• Managing grievances proactively and maintaining frequent communication with union representatives to avoid conflict or disruption.Best practice recommendations for HR managers include: establishing an open‑door policy with regular communication, developing clear performance management systems so employees see how effort links to rewards, and collaborating with unions on training and change initiatives.

Conclusion

    In a government bank context, the HRM‑union relationship is a key component of organisational success. When HR and unions are seen as partners rather than adversaries, the result is higher employee commitment, better service performance and more stable operations. If HR neglects union relations or treats them only as constraints, the outcome may be low morale, disputes and lost productivity. HR managers in government banks must therefore engage unions strategically—not merely for compliance, but for long‑term value.

References

1. Sawithri, L. D., Nishanthi, H. M., & Amarasinghe, K. G. (2017). “The Impact of Employer‑Employee Relations on Employee Commitment: A Case from Sri Lanka.” Kelaniya Journal of Human Resource Management, 12(2), 174‑192. 
2. Dhammika, K. A. S. (2010). “Leadership Effectiveness in Unionized Work Environment: A Study on Public Sector Organisations in Sri Lanka.” International Proceedings of Business & Social Science, 2(2), 47‑73. 
3. Gamage, P. N. (2013). “Multiplicity of Trade Unions: Issues & Challenges in Sri Lanka.” Indian Journal of Industrial Relations, 49(3), 437‑456.