The increasing significance of employment relations (ER) in the workplace has prompted this study, which explores how leadership positions ER as a strategic role player within the human capital (HC) function. A qualitative research approach was employed to investigate the role of leadership in ER, utilizing grounded theory as the research strategy. Data were collected through purposive sampling from 12 participants using semi-structured interviews, and the findings were analyzed using thematic analysis. The study revealed that integrating functions within the HC environment is crucial for creating strategic value in the workplace. It also highlighted that the strategic positioning of ER requires strategic leadership and creativity to achieve organizational vision and harmonious employment relations. The study proposed an ER strategic positioning model, offering practical guidelines for aligning the ER function with other HC functions to promote harmony and strategic value. This research contributes significantly to the ER field by providing both theoretical and empirical insights into the leadership qualities and strategies required to implement effective employment relations in organizations.