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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
 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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Collective Bargaining
 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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
 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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Collective Bargaining
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 game
A rational process where
conflicting interests are reconciled
A forum where unions go to
“collect” and Management goes to
“bargain”

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

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Collective Bargaining
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 security
Problems like retrenchment and promotions
are dealt with jointly and one party does not
impose its view on the other party
Both parties identify and recognise the
problem and search for solutions through
exploring alternatives

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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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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Collective Bargaining
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.

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