The practices are significant in the enhancement of employee satisfaction. There are many factors that may affect might affect employment relations, such as political influences, changing technology, cultural issues, social and economic factors, business cycle as well as psychological factors. The government plays a significant role in employment relations and is recognized by many employers in many states including the UK, US, and Australia among other thriving economies. Each state has its own regulations regarding collective bargaining, which are influenced by policies. The labor law has a strong influence on employment contracts and the behavior of employers in regards to their relationship with employees. The government, being the sole institution mandated to develop new laws and to discard the ones that seem inappropriate, has the capacity to determine how the employer-employee relationship should be. The changes in regimes governing the state greatly influence the manner in which organizations operate. Trade unions are applied as the tools for strengthening the employees’ collective bargaining Hollinshead et al (2003). However, they are met with resistance from different circles especially when the government promotes non-collective mechanisms in industrial relations. The unions are sometimes viewed as the major drawbacks in the efforts to encourage investors to create employment opportunities. They are viewed as hindrances towards the maintenance of a free labor market. For example as Dundon Rollinson (2004) observe, the unions were considered to be the cause of rampant unemployment in Britain since 1979. This made the government make efforts that are geared towards increasing the freedom of managers, reduction of government influence on formal structures of organizations, and increasing the management’s capacity to control the human resources.Government policy usually has a significant influence on the outlook and the anticipation of employers.