Collective Bargaining: Benefits, Pitfalls and Unions Help
What is Collective Bargaining? It is the process by which representatives of management and the unions meet and negotiate over wages, hours and other terms and conditions of employment in good faith. It is a give and take process which aims to arrive at a conclusion beneficial to both the parties.
One of the most important aspects of collective bargaining is that it is a never ending process. It does not finish after an agreement has been reached. It continues for the life of the agreement and beyond. “Good faith bargaining” is at the center of effective labor-management relations. It means that no party should compel another to agree to a proposal. Nor does it require any of the parties to make any specific concessions.
The right to bargain collectively is recognized through International Human Rights Conventions. Article 23 of the Universal Declaration of Human Rights recognizes the ability to join trade unions as a human right. Item 2(a) of the International Labor Organization’s declaration also identifies the same. Collective bargaining is the last stage in the unionization process.
Collective bargaining according to Kochan, ‘served as the vehicle in providing workers with their most powerful voice'. When introduced it was in the 1990s, it was aimed to allow employers and employees to negotiate above ward pay and conditions in return for for workplace-specific productivity-enhancing trade-offs”. It was argued that workers who were protected by enterprise agreements tned to have higher pay and stronger growth rate than on awards. It was aimed at:
- a shift from a heavily centralised system of wage fixation and bargaining to one that allowed for collective bargaining for different and relevant to each enterprise;
- a desire to improve labour productivity;
- an economic and organisational motives over labour deployment and flexibility.
The Meaning for Employers
For employers, the introduction of entprise bargaining mean that reinvention of the way employers and employees discuss above ward pay and condition negotiations, it was aimed to be a return to “workplace specific productivity enhancing trade offs, and was supposed to benefit employers and employees. Arguments for enterprise bargaining from employers were:
- The removal of thir party involvement in agreement making in enterprise agreemtne would ensure that relationships between employes and employees will strengthen in terms of agreement making and communication
- It would allow for changes and agreements to be shifted from a centralised system to one where its specific to each industry.
- This would, they argued, also improve the quality of employment relationships, by enabling employers to 'get close to our people', building teamwork, trust and an identity of interest between employers and employees.
Challenges and Pitfalls
Bargaining deadlocks can result when there is no dialogue between workers and employers because of reluctance on the part of the parties to compromise. A general precondition of collective bargaining is that it must be done in good faith. However, in most cases each party has to push the other party to get what they want. While collective bargaining has been confrontational historically in some countries, the challenge is to achieve win-win situations. Also, usually there are close connections between trade unions and political parties and as a result the focus of trade unions is not always on collective bargaining. There is a also a lack of definite procedure to determine which trade union should be recognized as a bargaining agent to represent the interests of workers.
Collective Bargaining and the Two Faces of Trade Unions
Collective rather than individual bargaining has become necessary today. A reason why collective bargaining is necessary is that workers who are employed by a firm may not speak out in the fear of being fired. The collectiveness of trade unions alters the way the labor market operates or functions. In a non-unionized setting, the firm is primarily concerned with the needs of the marginal worker- who is usually young and marketable and may be attracted by other firms and may ignore those who are older and less marketable. In short, the desires of those who are unlikely to leave the enterprise are not represented. However, in a unionized setting, the union considers all the workers while representing them at the bargaining table so that the desires of those who are not likely to leave the enterprise are also represented.
It is believed that there are two faces of trade unions:
- Monopoly Face
- Collective voice/ Institutional response face
- Effect on trade unions on efficiency
- Effect of trade unions on distribution of income
- Effect of trade unions socially
- Collective voice
Trade unions help in reducing the labor turnover rate which helps both the employer and the employee. The employee enjoys job stability whereas the employer does not have to bear the high cost of labor turnover. If management uses the collective bargaining process to learn about and improve the operation of the workplace and the production process, unionism can be a significant plus to enterprise efficiency. On the other hand, if management responds negatively to collective bargaining (or is prevented by unions from reacting positively), unionism can significantly harm the performance of the firm. If management listens quietly to unreasonable union wage demands, the organized sector may suffer serious economic decline. If it reaches sensible agreements with labor, all parties may benefit.
Some Examples of Collective Bargaining
In Sports, collective bargaining has a big role to play. If there was no agreement on the terms and conditions that are supplied, there would either be a lock out or strike and there would be no sports for the season. In the past 10 years, the NFL (national football league) has not had a single strike or lockout due to the collective bargaining agreement struck between the NFL and the players’ union in 1993 and it has been renewed five times since then.
Conclusion
The report begins by explaining what trade unions are, why workers join trade unions and the benefits of trade unions to employers, employees and the society. The report then explains what trade unions are and their relevance in the modern workplace. The various collective bargaining issues with examples are highlighted and they have been classified in to three categories. The report also highlights the benefits and challenges of collective bargaining.
