Managerial prerogatives are considered natural or intrinsic organic rights or put another way an unqualified authority which allow employers to manage their employees. They are the discretionary powers left at any moment in the hands of managers. They are generally considered to be powers which are beyond the control of industrial tribunals such as the Fair Work Commission, on the contrary they are an area where management has sole and exclusive rights of determination. In support of the existence of the power, or right, or function, depending upon how pejorative you may want to be, it is often justified at a fundamental economic level on the basis of an argument to the effect that neither employees nor an independent umpire are be able to determine how management’s capital is best allocated ie “it is management’s job to manage” or put another way “carries with it the implication that there are actions or areas for action so essential to management that these must remain unilaterally the property of management if management is itself to continue to exist “.
In that sense the concept arises from the historic tension between industrial capital and labour, with all of the idealogical, sociological and political conflict which comes with that. I will endeavour in a post soon to distinguish between the legal status of managerial prerogative and lawful and reasonable instructions.