Collective Bargaining

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Collective Bargaining

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Definition

Beatrice and Sidney Webb defined collective bargaining as: one method whereby trade unions could

maintain and improve their members’ terms of employment

Accordingly collective bargaining is a trade union initiated process

If employees didn’t form unions and make demands the bargaining process would not have happened

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Definition

Definition The prime aim for unions is to improve

wages & conditions of employment This definition however fails to discuss

the interactive nature of the process and its central position in labour relations

Collective bargaining is a two way process and the pressure to negotiate comes from both sides

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Definition

Collective bargaining is the principle method whereby employers and employees establish and continue a relationship

This is an important means of communication which Allows the two sides to get together and talk about problems, needs, goals and to settle differences

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Definition

An alternative definition: “ a method of determining the terms and conditions of employment and regulating the employment relationship between representatives of management and employees with the intention to reach an agreement which may be applied to a group of workers.

This definition is used by Salamon.

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Commonality of interest as a basis for bargaining: Bargaining would not take place if there was no

common interest to bargaining Parties work together to produce goods and

services Together they work for the long term future of

the of the company Bargaining is based on pluralism Both parties recognise each others right to exist

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The role of conflict in bargaining: Bargaining would not occur if there was no

conflict Parties have different needs, goals,

interests, attitudes, values and perceptions These goals are pursued at the costs of the

other party If parties have sufficient power then they

use collective bargaining as a way forward

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Role of conflict: The agreement to bargain does not

negate or eliminate conflict Conflict should not be seen as

dysfunctional leading to destruction Instead many see conflict as leading

to innovation and change to bring about improvement in an organisation

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Sources of conflict are: Scarcity of resources: availability of

money Incompatibility of goals, needs and

interests Different attitudes to work Ambiguity in responsibilities and roles Poor organisational structure Poor communication

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Sources of conflict Most important over: wages and salaries Management has to see to shareholder

profits and workers want more money Productivity needs may force the firm to

operate different work practices and the unions might resist this

Companies might want to dismiss inefficient workers and the union would resist this, demanding job security

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Employees might demand shorter working hours, longer vacation leave and more time off for training

Employees might insist on stricter health and safety controls which would be expensive for the company

Employers demand loyalty to the firm whereas employees see it as the individual right to change jobs when the opportunity arises

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These are the issues that are brought to the bargaining table

Both parties realise the need to handle conflict effectively

These include the day to day activities of the organisations

Conflict is thus not confined to the bargaining table

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Power regulated the bargaining process: If one party has more power it will

override the interest of the other party

Historically management has had more power than the workers

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Power: Management's sources of power is their

ownership and/or control over the firm Workers power comes from their ability

to withhold labour collectively - strikes On an individual level workers hold very

little power and its only in trade unions that they have power

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Power: The law defines the parameter of power The legality of the use of the strike can

ensure that workers have power, making strikes illegal takes power away from workers

Having the power of the collective makes trade unions powerful since they can stop the production process

Power somewhat weakened by no work no pay

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Once a bargaining relationship has been established both parties will bring their power to the bargaining table

Employers can withhold work opportunity by locking out workers and this way they do not receive any wages

The ability to hire casual labour during strike action can give employers power

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Establishing a bargaining relationship: Employment contract, whereby employer

and employee agree on wages and conditions of employment

Unions then demand recognition from management. This formalises management union relationship

A bargaining relationship is established when management and union formally agree to enter into negotiations

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Nature of C.B

A power gameA rational process where conflicting interests are reconciledA forum where unions go to “collect” and Management goes to “bargain”

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Bargaining styles: Distributive bargaining: this is the most

common type Management and unions are in opposing

positions and gain for one is a loss for another

Antagonism dominates the bargaining items

These would be around wages and conditions of employment

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In distributive bargaining power is used as part of the strategy and tactics on both sideEach party strives towards an outcome that is favourable to its own sideBoth parties are thus assessing strengths and weaknesses on both sidesBoth parties are looking to how much they can push the other partyEach party assesses its ability to withstand being pushed

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Bargaining styles: Integrative Bargaining: This is when both

parties want a successful outcome and there is a genuine desire to solve a problem

In integrative bargaining items are seen as problems that need resolving

Integrative bargaining strives for a win –win situation

Conflict is minimised

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Bargaining Styles

Matters dealt with include: job security, procedures, promotions, benefits and institutional securityProblems like retrenchment and promotions are dealt with jointly and one party does not impose its view on the other partyBoth parties identify and recognise the problem and search for solutions through exploring alternatives

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Bargaining Structure: Refers to bargaining units and bargaining

levels Bargaining unit is the employees that will be

covered by the agreement Bargaining level refers to whether

bargaining will take place on a decentralised or a more centralised level

Bargaining structure determines which employees are covered by an agreement

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Types of bargaining structures Narrow decentralised units: when a

union represents the interest of one group of workers at a particular plant

Broad decentralised units: Unions of several unions combine to form one bargaining unit represent different sets of employees

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Bargaining structures: Narrow centralised units:when a union or

several unions representing a particular sector at a company or industry, or different industries bargain centrally

Broad decentralised units: a union or a number of unions represent diverse interests bargain with a number of employees in an industry

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Outcomes: The outcome of a collective bargaining

process is an agreement There is usually an agreement to bargain

regularly over wages and other conditions of employment

Agreement can stipulate a time factor to the agreement, for e.g. wage increase for one year only or for a number of years

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Outcomes

All agreement are enforceable by law.All parties are bound to the terms and conditions set out in the agreement.While parties cannot withdraw from and agreement, clauses can be inserted to allow for conditional withdrawal.

Documents

Collective Bargaining