Inherent managerial rights: Overview, definition, and example
What are inherent managerial rights?
Inherent managerial rights refer to the fundamental authority and responsibilities that managers or business owners have in overseeing and directing the operations of a company or organization. These rights are typically not explicitly defined in contracts or agreements but are considered inherent in the managerial role. They include the ability to make decisions on staffing, resource allocation, establishing work policies, setting employee expectations, and ensuring that the business operates effectively and efficiently. These rights are assumed as part of a manager’s position, regardless of specific legal agreements or union contracts.
In simpler terms, inherent managerial rights are the basic powers that managers have by virtue of their position to run the business and make important decisions.
Why are inherent managerial rights important?
Inherent managerial rights are important because they enable managers to make quick decisions, set business goals, and respond to changing circumstances without needing approval for every action. These rights ensure that there is a clear line of authority within the organization, promoting order and efficiency. Without these rights, decision-making could become slow, and the business might struggle to adapt or operate effectively.
For SMB owners, understanding inherent managerial rights helps in defining their roles, ensuring smooth decision-making, and navigating issues that may arise in business operations, particularly in situations where there are no explicit agreements in place.
Understanding inherent managerial rights through an example
Let’s say your small business needs to adjust work hours to accommodate a seasonal increase in demand. As the business owner or manager, you have the inherent right to make this decision without needing approval from employees. You simply communicate the change to your staff, explaining the reasons for the shift. This decision is part of your inherent managerial rights, as you are responsible for directing business operations to meet the needs of the company.
In this case, the right to adjust work hours is an example of an inherent managerial right that allows you to make key operational decisions in your business.
Example of inherent managerial rights in a contract
Here’s an example of how inherent managerial rights might be referenced in a business contract or agreement:
“The Employer retains all inherent managerial rights, including the right to direct and manage the workforce, establish work rules, assign duties, and determine staffing needs, subject only to applicable labor laws and collective bargaining agreements.”
Conclusion
Inherent managerial rights are essential for ensuring that managers and business owners have the authority to make necessary decisions for the smooth running of the business. For SMB owners, recognizing and understanding these rights allows them to maintain effective control over their operations, make timely decisions, and address business challenges efficiently. These rights also provide clarity on the roles and responsibilities of management, helping to ensure that the business functions effectively and remains adaptable to changing circumstances.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.