The Arguements For and Against Collective Bargaining - Essay Example

COLLECTIVE BARGAINING: The now popular term 'collective bargaining' was used for the first time by Sidney and Beatrice Webb in their works. It is a product of modern industrial society, and has no place in traditional agricultural society and it mirrors the economic change in the society. "The organization of wage earners into labor unions and the growth of management organization - in a word, the emergence of collective bargaining - is basically a facet of these structural changes in the economy over the past century," says Dunlop and Healy(1953, p. 8). It is a method employed by Unions, mainly while dealing with the management, to improve the working conditions, benefits and wages of their members. It has a noble sense of common purpose. "The American system of free collective bargaining is built on the relatively simple proposition that workers ought to have an uncoerced right to decide whether or not they wish to be represented by a trade union for the purpose of collective bargaining with their employer." Collective Bargaining and Collective Policies (1979, p.140). "The system of collective bargaining by which the terms and conditions of employment of most working people are settled has developed in a way which is largely unregulated by law;" this is said about UK Collective bargaining (Ibid. p.128). Issues vary in collective bargaining from one situation to another with multiple issues at stake; it needs hard negotiation, diplomacy, tact, bargaining power, and persuasion. To a large extent, it is based on conflict; but this should not mean that collective bargaining is on warpath. Talking about the social psychology of bargaining, Morley and Stephenson (1977) argue: "Conflict in formal negotiation groups is thus regarded as a function of the task itself, the attitudinal commitments of a negotiator to a party position, and the role obligation of a negotiator to represent a party," (p.29). Recently collective bargaining had been showing a necessity of combined knowledge from various interconnected disciplines, as industry and well being of workers have connection with many of today's issues like mass communication, law, psychology, journalism, sociology and economics. Employers too interact within a complex legal framework: their actions are influenced and often constrained by economic or political events largely beyond their control; decisions are made by leaders representing complex and often large organizations, diverse interest groups, and individuals with differing needs, expectations, attitudes and abilities," Kochan,(1980, p.2). For effective Collective Bargaining, unions have to possess clear knowledge of government policies. They should be capable of policy evaluation and familiar with frequent amendments and further developments. They also should be in touch with court proceedings that keep amending or improving the policies. The collective bargaining group should be able to understand the total meaning and repercussions of the new policies, trends and laws completely. They have to be aware of the recent legal judgements, Government policies and have knowledge of collective bargaining achieved by other companies. Unions, who are well prepared for the job, would achieve better bargaining for their workforce. Usually, every union proclaims its own values, exalted principles and outlooks. These values and principles give identity and depth to the organisation and clear policy decisions could be the base of any good industrial relations. Social and political attitudes all over the world, towards work and industries have undergone a sea change over the years. Today, Unions responsible for Collective bargaining reflect economic, political, cultural and sometimes even religious changes in the society. Social philosophies prevailing at the time of bargaining in the region too get mirrored in the bargaining process. Labour is treated as a commodity for a long time now. Since the industrial revolution, although the progress had been painfully slow at times, collective bargaining has been increasingly becoming a convenient and effective tool to renew rules, establish precedents, and improve terms and conditions of the workers and their workspace. In maximum number of cases, bargaining takes place mainly between the workers and the management and hence, is always done without much of outside intervention. Having said that, it should be admitted that sometimes lawyers, consultants and political representatives too get involved in the process and though this enhances the sphere of the agreement, it usually ends up sending wrong signals to all concerned. Neither the management would be thrilled to deal with outsiders nor the workers would help being apprehensive, as the outsiders usually are never aware of the ongoing problems. Such agreements tend to end with unsatisfactory results, with a major blame-game in the end. Traditional way of collective bargaining depends on understanding the workers' issues, making a list of it with the connected qualifying laws and policies, and negotiating with management on behalf of the entire workgroup. The outcome of the initial discussions naturally would be unacceptable to all concerned and the bargainers have to refer the outcome back to the larger circle within the union. It is a lengthy and mind-boggling process all the while, trying to adjust the union-management relations while targeting the maximum benefit for workers. At the same time, management is busy with their own game of safeguarding company's interest and not losing too much in the process of satisfying the unions. They also keep in mind the absolute need of not antagonising the workers, as surely that could boomerang on the organisation. After the unavoidable parleys and arguments usually both the parties arrive at a mutually acceptable agreement. Once the bargaining agreement has reached, both parties would have been committed into it and hence, it becomes a standard agreement for wages, benefits, job security, better working conditions, holidays, medical facilities, duties, rights and other terms and conditions. Under normal circumstances, this agreement is arrived at without much conflict and both the parties would have taken care not to strain the relationships. A major advantage of collective bargaining that it takes place between the two parties, who have to work together for the betterment of the same company and thus, unpleasantness is always avoided and disagreements are never allowed to reach a boiling point. Management too would be aware that union is working for a large group and not for personal gain and all the beneficiaries are their own employees. The entire process above could be taken as advantage of collective bargaining. Management could not be displeased with any one individual and persecute him, as it is a group of individuals, who do the hard discussions. Then again, they do so as representatives of a larger organisation and not in their personal capacity and definitely not for personal gain. The satisfaction of workforce would be beneficial for the management too. Decisions taken might be harsh on the management; but again, it is not an individual decision. It is the part of the whole process of bargaining that makes the management to see the logic behind their demands. The crucial part of putting the agreement into practice is usually done with mutual understanding and benefit in mind. Collective bargaining has other advantages too. No doubt, it functions very well when a single company is involved. It could also be effectively used for a number of companies. When more than one party are involved, it resolves many bargaining issues solving many problems with one negotiation. If the companies are of the same trade, or if the unions are affiliated to a particular huge workers' organisation, then negotiations for all companies could be evolved out of the same haggling. Collective bargaining has a healthy, selfless multiple interest perspective and while working for the whole group, has its own clout, because of which management cannot ignore it. If it is a very small group, representing only a fraction of workers, or worse still, if it had been an individual, managements hardly respond. This is another advantage of collective bargaining and its importance that is lacking in individual and smaller group bargaining. Collective bargaining can benefit both management and work force in their quest for a good relationship and smooth functioning. It is a democratic way of functioning with pluralism and freedom of association, representing their common interests and desires. It is also connected with Marxist principles and workers' rights, stemming from recognition of trade unions and freedom of speech. By adhering to agreements, it avoids conflict and confrontation, and issues could be resolved through dialogue and consensus. It institutionalises the agreements. It is a form of individual participation through representation. It also takes the shape of community participation and social involvement. It can create trust and understanding between the two parties. It will stabilise the drifting membership of the unions. It can improve industrial relationships at various levels. Though it mainly addresses the issues of employees, it is also concerned with employer problems like more productivity, efficiency, accountability and responsibility. It balances and levels the influences of both the sides, without causing confrontation. Its main function is resurrection of workers' rights. Unlike in olden days when it dealt with only working hours and wages, now it is covering working environment and stipulation of clear-cut responsibilities, training and professionalism. But it cannot help reflecting the economic environments and the market environment. In the present industrial scene, unions have to make a lot of choices, which are not always palatable. This in turn would affect their bargaining capacity, willingness and power. Experimentation is pervading collective bargaining making it easier to adapt to new demands. Structural changes in the Economy and Labour force too would effect diversely. Frequent mergers, dissolution, formation and reformation without any proper continuity could affect both workers and their unions. A static union, with totally centralised powers too could be equally daunting. Today, they not only have to deal with pay structures at various levels, but also have to manage matters under the backdrop of domestic and international prevailing conditions and unpredictably fluctuating economic situation. But, if the situation is favourable, naturally the workers do get benefited. In collective bargaining there is more flexibility and understanding and the sole purpose is avoiding unpleasant conflicts. It has retained the capacity to adapt itself to new and unforeseen situations and the immense diversity in the group is a complimentary matter. Majority of the working population is covered by collective bargaining. As bargaining structure consists of mostly informal work groups, who are absolutely familiar with the problems of fellow workers, they know that job satisfaction could be achieved by working in better environment for better wages. It can be beneficial for the management too, as the workers' satisfaction is bound to reflect on motivation and performance and higher productivity. Collective bargaining has to please all the dimensions and hence the agreement gets weakened. Most of the labour leaders are politically involved and this gives them better perspective, honesty and integrity so that their political chances are not spoilt. At the same time, workers get a better deal through such leaders. There is an added advantage of revising or modifying the agreements, as they are flexible and legally not binding to the letter. AGAINST COLLECTIVE BARGAINING There is no doubt that Collective bargaining has its own limitations. It always does not succeed in analysing the labour problems and policies. As work is now considered too central to life, one cannot completely rely on collective bargaining to do the best in such a momentous area. After the emergence of industrial sociology leading to equality, collective bargaining has become slightly redundant. Workers sometimes are of the opinion that personal problems and grudges could rule the bargaining process and the previous dedication is missing in today's representatives. "Thus, while an inherent conflict of interests may exist between workers and employers it may not always be perceived or may not cover a wide or important enough array of issues to activate a concerted response by the employees," Kochan (1980,p.18). Conflict of interests can work as a deterrent to collective bargaining. If it is a longstanding one, it could permanently mar the relationships. Collective bargaining stepping into public sector had been a calamity resulting in unending strikes. "Collective bargaining in the public sector is highly decentralized. Almost all bargaining is done on a single-employer basis that is, with a particular government or agency. There are a few isolated examples of formal multiemployer bargaining," say Katz and Kochan (2004, p.338). Free collective bargaining is slightly sliding back now. It is not the most preferred tactic any more. Governments are issuing guidelines and setting up precedents for workers and managements, so that unions look lacklustre. There are many external environments that would affect the bargaining structure. Administration of collective agreements is not a pleasant matter. Even after the bargaining outcome there is no definite promise that it would be put into practice. There cannot be always a perfect environment for collective bargaining. It has to be created by both sides, and it is not very easy. Political, social, economic and sometimes even religious environments could determine the outcome. National bargaining has already declined after Acts for minimum wages have passed by Governments in various countries. Decentralisation of bargaining has come into affect due to new business trends. "However, it is clear that the decentralization of pay bargaining is not simply the result of government exhortation but is also a response to perceived business needs," Jackson et al (1993, p. 22). It is argued that collective bargaining always takes place far from the implementation point of agreement and hence, it might be the perfect answer to the requirements of the people involved, as parties are less influenced by the close proximity of the aggrieved crowd. But this is an arguable point. "Ideally, negotiation should be closely integrated with the administration of contracts. But the larger the bargaining unit, the more removed negotiation becomes from administration," says Weber (1961, p.54). The splinter groups of the unions, if any, may not always agree to collective bargaining, having their own voices and contradictory opinions to be expressed. These groups cause the maximum hindrance to collective bargaining in every industry. This drives the majority-backed union into arm-twisting tactics so that workers are wary of splinter groups and rival unions. In the new trend of globalised business, unions seem to be showing bitter resistance to change in accordance with the altered circumstances. "Since the contention that trade unions have a positive impact on productivity and efficiency is essentially at odds in the longer term with the argument that they prevent or obstruct change, the work of such institutional economists supoorts the instincts of academic researchers into industrial relations to resist simple generalizations about trade union behaviour and its consequences," opines Wilman (1986, p.2). Managerial behaviour has changed quite a lot after globalisation and definitely is not in tune with the bargaining of unions. They might not liked to be 'bullied' even though they are not against granting facilities to workers on their own. They are careful to make an impact that the facilities were granted by the management, and not the result of collective bargaining and hence, unions or bargaining groups need not be credited with such achievements. In every organisation, management is nervous about giving credence or importance to unions. When many parties are involved, it is difficult to give equal attention to all the issues. Collective bargaining is the process and there is no guarantee that it should lead to a collective agreement. Unions could be using it as an attraction for increasing their members. It is also argued that it re-establishes the inferior position of the workers as perpetual demanders, always in need of favour from management and thus, the balance never gets equalled. It fails to create a permanent relationship between employees and employers. "Where it leads to an agreement, it modifies, rather than replaces, the individual contract of employment, because it does not create the employer-employee relationship," says Sriyan de Silva (1996, http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srscbarg.htm Bargaining word gives the picture of haggling, more like a onetime purchase and does not establish the solemnity of unions having important discussions with the management. It requires the help of Labour Administration Authorities to execute the agreements so that the agreements are not breached by defaulting parties. Proper internal communication is absolutely necessary and usually it is lacking, or not in perfect strength. It is mostly done in good faith, but woefully inadequate, as one can foresee the circumstances only in a haze. Leaders in most of the countries have political ambitions and this makes them susceptible while bargaining, as they tend to play for the galleries. Today collective bargaining is at the crossroads. Collective agreement remains legally not binding. External elements affect the bargaining power negotiation process and this means, there will definitely some element of uncertainty to spoil the bargaining's outcome. With the new adjustments in the air, it is even more difficult for unions to be persuasive or obstinate and their unprecedented adjustments sit uncomfortably on their shoulders. It is criticised that with frequent changes, unions hardly could adjust themselves to the fast changing demands, alterations, new vistas and challenges. Hard bargaining seems to have gone out of fashion and this means only polite negotiations and it is told that management usually bulldozes the present, rather weak unions. There are also arguments that some of the union leaders might be sympathising with the management for various reasons, and this makes it extremely difficult for the rest of the members. Experimentations are leading to uncertainty and unprecedented failures. Some of the employees have started avoiding the unions. "There is also evidence that many employers increased their resistance to unions and that, specifically, management became very sophisticated in the tactics employed during election campaigns. Management's tactics include the use of consultants, direct discussions with employees, speeches by executives of the firm during election campaigns, and in some cases, threats," Katz and Kochan (2004, p.127). Organisational factors depend on the type of industry and this point too would affect the bargaining leverage of the unions. Collective bargaining groups without connected political, economical or social knowledge could be more of a hindrance. Cooperation of the management is required for any kind of bargaining and it is not always forthcoming and collective bargaining cannot be done with an unwilling partner. Unions tend to work under the negative feeling that management wants stability and uniformity for its own sake and not really worried about their workers' welfare. Lack of inter-union rivalry under the present circumstances have made the unions really slack in collective bargaining and even in their grip over its members. Prevailing domestic and international conditions and economic conflicts very rarely allow the collective bargaining to function properly. Bargaining is always subject to alteration or modification by the forces in the society and the diversity in the group itself may not be always an additional advantage. As informal groups, unions lack tightness and discipline. Collective bargaining relationships are not static. There is no guarantee that collective bargaining will also provide job satisfaction. Leaders in most of the countries have political ambitions and this makes them susceptible while bargaining, as they tend to concentrate more on their own reputation and future prospectus. Multinational bargaining that had started in right earnest, slowed down facing unforeseen difficulties and today, it does not even exist. "There are formidable obstacles to its development and serious questions whether it would be in the public interest. Nevertheless, there are pressures from various vested interests, particularly international trade union organizations and international government groups, to promote multinational bargaining," says Northrup and Rowan (1979, p.564). Minority workers very rarely get the benefits of collective bargaining and as a rule, they are ignored. As the agreements are not legally binding, they are not taken seriously. Collective bargaining groups, once the bargaining is over, usually disintegrate and workers' side of promises may not materialise. CASES: 1. Three members of Millinery, Blockers Union, were suspended by their local union for acts of misconduct and were charged with the breaking up of local union meetings, rebelling against the union. The accused appealed to General Executive Board and later to Committee on Appeals and Grievances at the 1944 Convention without denying the charges, but explaining that they were upholding freedom of speech. The Grievance Committee, taking the membership oath into consideration, upheld the suspension and the same was sustained by the convention. Unions do not tolerate splintering activities as this would lead to weakening of their bargaining power. (based on Dunlop, 1953) 2. In 1948 Hector Duff was charged by another member for being involved in Communist activities. Even though the Trial Committee did not find him guilty, on a further appeal, International Executive Council deliberated on a newspaper clipping where Duff had admitted that he was a communist. The committee had to order for his expulsion, as he never appeared to show any evidence that he was not a communist. This case might look peculiar today, but it goes to show how the prevailing political and social circumstances and the current theories prevalent in society could affect the collective bargaining. (based on Dunlop, 1953, pp. 225-226). 3. On November 12, 1966, Jerry Smith reported for duty at 11 p.m. on a Saturday by a mistaken assumption and later found that it was his mistake. At midnight, foreman, Donald Smelser walked in and questioned Jerry, and after finding out that it was genuine error, allowed him to complete the shift. As it was his seventh day, he had to be paid double time, according to the rules of the company. But Howard Bell, senior to Smith too claimed double time pay as overtime is paid to workers in accordance with their seniority in the company and this issue was taken to arbitration. Union argued that as the foreman allowed Jerry to complete the shift, he has to be paid according to the precedent. Company argued that it was Jerry's mistake to report for duty erroneously and still the company allowed him to continue to complete the shift, for which the company should be commended and not condemned. This case upholds the union's support to a lone employee even though he had made an obvious mistake. Collective bargaining taking the case of a single employee against the company establishes the employee's representation and rights in the union. Schoen and Hilgert(1969, pp. 157-157). 4. In March 1965 an employee of Food Employer's Council of Los Angeles was vacationing in Oklahoma when he received the news of his father's death in San Diego. According to the stipulated rules of the Company, any employee, who suffers the demise of an immediate family member, would be given three days pay for the absence. The above employee, who came to San Diego for the funeral, continued his holiday after it. When he returned back to work, he claimed the three days' pay. Union fully supported his claim and reiterated that his being on vacation would not make any difference and he had to be paid for those three days as per rule. Company contested this claim saying that the employee was on vacation and it cited the sick leave clause that did not entitle employees to sick leave benefits if they were on vacation. Company was making a technical point, which looks sound; but the union, taking the stand from the point of the employee, supported him to the hilt. Even though Communism never received acceptance in most of the Western World, Marx's workers' unions had been accepted by the entire world and even America could not reject them in any way. Small organisations existed earlier too; but one cannot deny that it was Karl Marx who popularised and institutionalised them. In a way, unions are the victory of Marx's kind of Communism, which is a far cry from the Communism practised by USSR or China. And Unions are here to stay. Unions, effective or ineffective, are needed as long as the industrial scene exists. Only through collective bargaining workers can justify themselves and have their voices heard. "The choice before us is quite clear. We can continue in the direction in which we are now moving: toward a tightly controlled relationship between union, management, and the employees, probably with a good deal of collusion and manipulation through strongly fortified central leaderships, steadily enlarging collective bargaining units, and, inevitably, some form of compulsory arbitration," says Weber (1961, p.140). BIBLIOGRAPHY: Collective Bargaining and Government Policies, (1979), Organisation for Economic Co-operation and Development, Paris. Dunlop, John T. and Healy, James J. (1953), Collective Bargaining, Principles and Cases, (revised edition), Richard D. Irwin, Inc. Homewood, Illinois. de Silva, Sriyan (1996), Collective Bargaining Negotiations, http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srscbarg.htm, accessed on 21.11.2005. Jackson, Michael P., Leopold, John W. and Tuck, Kate (1993), Decentralization of Collective Bargaining, The Macmillan Press Ltd., Hampshire. Kochan, Thomas A. (1980), Collective bargaining and industrial relations, from theory to policy and practice, Homewood, Illinois. Katz, Harry C. and Kochan, Thomas A. (2004), An Introduction to Collective Bargaining and Industrial Relations, 3rd ed., McGraw-Hill Irwin, New York. Morley, Ian and Stephenson, Geoffrey (1977), The Social Psychology of Bargaining, George Allen & Unwin Ltd., London. Northrup, Herbert R. and Rowan, Richard L. (1979), Multinational Collective Bargaining Attempts, University of Pennsylvania, Philadelphia. Schoen, Sterling H. and Hilgert, Raymond L. (1969), Cases in Collective Bargaining and Industrial Relations, Richard D. Irwin, Inc., Illinois. Waddington, Jeremy (1995), The Politics of Bargaining, Mansell, London. Weber, Arnold R., ed. (1961), The Structure of Collective Bargaining, The Free Press of Glencoe, Inc., New York. Willman, Paul (1986), Technological Change Collective Bargaining and Industrial Efficiency, Clarendon Press, Oxford. ONLINE SOURCES: http://www.socialstudieshelp.com/Eco_collective_bargaining.htm http://www.bls.gov/cba/home.htm http://en.wikipedia.org/wiki/Collective_bargaining http://www.ilo.org/public/english/dialogue/actemp/papers/1998/srscbarg.htm http://www.ilr.cornell.edu/library/subjectGuides/collectiveBargaining/default.html Read More