Collective bargaining is the foundation stone for the whole industrial relations system. It involves an employer, or group of employers, negotiating the terms and conditions of employment with representatives of one or more employee representatives with a view to reaching agreement. That is, the contract of employment with all its features is determined collectively not individually. The terms and conditions of employment are offered to employees in standard form (for example, pay, hours, holidays, benefits), and accepted or rejected accordingly. In the main, the terms and conditions of an employment contract cannot be individually negotiated. Exceptions include the terms and conditions attached to very senior jobs where individual executives may be free to negotiate on various aspects of their contract.
Collective bargaining harnesses the numerical strength of the workforce vis-à-vis employers, who in principle has prerogative to run the business in any way they see fit. As such collective bargaining procedures achieve a greater balance of power in the employer–employee relationship. It also ensures fairness among employees insofar as their terms and conditions are systematically determined.
Two prerequisite conditions for effective collective bargaining can be identified: (1) the freedom to associate; and (2) the recognition of unions by employers. The freedom to associate was established formally in 1906, when legislation was passed that enabled trade unions to operate without threat of legal action. The process of trade union recognition began in the 1850s. Initially, employers resisted trade unionism on ideological grounds – that is, perceiving trade unions to be a threat to their powers of prerogative. Gradually, employers were forced to recognize the trade unions and their power to effect industrial action, such that by the 1890s, ‘collective bargaining’ became seen as the ‘legitimate’ means by which employers and employees could negotiate the terms and conditions of employment. It was not until 1975 that recognition was formalized, however. Up until then, union recognition was voluntary on the part of the employer.
The Employment Protection Act 1975 introduced a procedure whereby union recognition could be imposed on an employer. The potential for ‘imposition’ coupled with the power of unions to effect industrial action, was sufficient to ensure union recognition among employers who might not otherwise have conceded to their existence. However, the act was repealed in 1980 due to conflict generated by ‘imposition’ procedures, such that union recognition became an entirely voluntary affair. This did not appear to undermine union recognition among employers.
Despite the fact that union membership is not 100 percent within any one particular employment scenario, collective bargaining procedures are the means by which the terms and conditions of all employees (union and non-union) are determined. This is something that unions use in arguing for 100 percent membership (that is, closed shop).
Collective bargaining enables:
· a balance of power to be effected between employer and employee,
· whereby the price of labour (wages, hours, and other terms) are determined,
· via a standard framework of industrial relations rules and procedures.
In some cases, there is constraint on negotiations imposed by government (that is, statutory backing) and thus pressure to work within stated limits.
There are few aspects of an employee’s contract that are left untouched by bargaining procedures. Initially, bargaining procedures were concerned with issues such as pay and hours of work, with all other terms and conditions determined unilaterally. Nowadays the scope of bargaining is all inclusive (Green, 1994: 88–89):
Pay – salary, basic rates, grading, lay-off pay, method of pay, interval of pay. Independent pay review bodies may be set up to examine the pay and conditions of a particular employee sector and to make recommendations to government. Various pay formulae can be applied to ensure that the jobs of a particular group of employees is equivalent to a comparable set of workers.
Premiums – overtime, shifts, week-ends/holidays, call-in pay.
· Bonuses – piecework schemes and payment, profit sharing, group bonuses.
· Allowances – working conditions, travel, equipment.
· Hours – basic working week, guaranteed hours, shift working and patterns, start and finish times, flexi-time, breaks.
Holidays – basic entitlement.
Safety – protective clothing, safe working procedures, injury benefits.
Welfare – medical checks, canteen facilities.
Pensions – benefits, insurance, early retirement.
Notice – arrangements/procedures.
Redundancy – procedures for consultation and selection, redeployment, training and redundancy payments.
Job description – main functions and responsibilities.
Staffing – levels, flexibility, mobility, cover.
Training – entitlement, educational release and payment.
Equal opportunities – in all aspects of HRM.
Industrial relations procedures – grievances, disputes, negotiations.
Collective bargaining is pursued at several levels from small work groups (in a private firm) to national agreements pertaining to thousands of employees. Multi-union membership within an organization can introduce much complexity to the bargaining process often leading to disunity among unions. This was a reason why single-union agreements have been instigated and is also instrumental in the move towards local rather than national bargaining.
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