Using Collective Bargaining - Essay Example

EMPLOYERS, WHY ARE THEY USING COLLECTIVE BARGAINING SOME TIME 2nd DECEMBER, 2008 Collective Bargaining is an effective tool of negotiation between the employee union representatives and the employer to determine issues such as wage , hours of work, employee benefits etc through the method of direct negotiations. In general, collective bargaining is also a means to carry forward a negotiation process between the employer and any group of employees to achieve a certain set of predefined objectives where both of the parties confer for some kind of common interest. The workers attain the collective power by conjoining and working in unison which gives them an edge of withdrawing their services or opting for other actions which might prove negative or hinder the employer’s business performance. Keeping the disadvantage or threats of collective bargaining aside, sometimes employers do support collective bargaining as one of the means of job regulation for their employees.  Collective Bargaining from a wider perspective, gives workers a right to challenge any unfair practices and managerial decisions. Being a part of the process of ‘job regulation’, collective bargaining, helps to put forward the genuine voice by the workers. Collective bargaining in the private sector has noticed an early shift from the multi employer bargaining. Constant efforts have been made on the part of employers to link the pay bargaining in regard to firm productivity levels; on the other hand in the public sector multi employer or centralized bargaining still persists. Government acting as an employer has taken initiatives to work on the same directions as the private sector has been heading for, facing the challenges and weaknesses of the old, traditional system of Whitley model. However the privatization of the public utilities such as the railways etc has been undertaken. Voluntary negotiations are preferred by the employers as it provides a chance to mitigate or lessen the uneven distribution of power within the workers. Management at all times remains an invariable dominant party in making such collective bargains. During the twentieth century, employers readily recognized unions for collective bargaining so as to curb the disruptions and commotions in the business and cultivate order and steadiness in the business. Employers are benefited by institutionalizing dispute settlement methods through dialogue which promotes and facilitates coordination. Collective bargaining may help the employers by realizing industrial peace thereby aiding in improving industrial relations climate on the whole extending extends "social partnership". For employers collective bargaining may be advantageous in realizing market gains whereby the employers could explore or discover the current prevailing rates of labour in a particular industry (Gospel H F, Palmer G, 1993). Negotiations between employer and workers help in predicting the course of agreements which may be beneficial in maneuvering and manipulating outcomes for personal benefits. Especially when bargaining is related on a multi-employment basis, the gains may be manifold as it helps in reduction of competition rates and fixing of wages out of shear contentions among the various firms. Equal labour cost for all competitors of the industry under a common sector agreement is advantageous as no competition prevails atleast on the part of the labour. The process of collective bargaining is nothing but an expression of the HRM function of the firm representing the social climate of the company. Apart from market advantages, economic assistances may also be derived through the custom and practice rules of the agreements which may comprise of starting times, finishing times, tea breaks, entertainment breaks, transfer and wok allocations, which may certainly help in running of efficient and smooth business operations .(Gospel H F, Palmer G, 1993) Employers who have to bear the brunt of multiple organized groups within their workforce, each with its own unique set of demands and requirements, collective bargaining may prove to be the best options available for realizing harmony and unity in the organization. Employers clearly see the advantages of collective bargaining over chaos. By making unions legal and lawful, the government has tried to assure employers that the union representatives they are negotiating with are purely authorized to bind the contract. This creates further legal binding on each and every aspect of the contract which can be beneficial for the employers sometimes. Collective bargaining is another mode on to fixing job regulations which helps in enhancing the productivity of the organization. Effective employee and employer dialogue can help in increasing the motivational and satisfaction levels of the staff making the business climate more adhesive and responsive. Staff retention, lower absenteeism helps the employer to save on the huge cost incurred every year to handling such issues. Whitely Model The role of collective bargaining actually emerged from the Whitley model in the year 1917, when the Whitley committee actually recommended the establishment of collective bargaining in the British industry. In 1919, the government actually adopted the whitely system both at the local and the national level (Corby S, White G, 1999). The Whitley model aimed at the private sector included agreements made in the industries, applicable only for the members companies of the associations. The Whitely council as collective bargaining institutions were set up in the year in 1948. Whitleyism was considered to be all-embracing machinery for collective bargaining of a national scope, covering federal, state and local government employees, thereby forming a centralized system of bargaining (Fashoyin, 1980: 105-106) and creating a systematic framework of collective bargaining. The Whitley approach attempted to be overt and unambiguous regarding the components of collective bargaining constituting the national system and to clarify and lay out their structural interconnections. But the approach was not apt as it overlooked international specialization, related to the innovation-system approach. The Whitley system lays very little emphasis on learning and competence building and over stresses on risk sharing and use of existing competencies. As per the Whitely models, the internal and external al rules of the organization were drafted by the Workplace-level joint consultation group, where unions were allowed to raise up their voices in substantive terms, away from the workplace and promoting managerial relations, where unilateral managerial regulation was expected. The model focused on conflict resolutions by involving procedures of conciliation, arbitrage and inquiry into the matter. Trade boards were established for setting up the minimum wage pay rates. On the whole Whitely Councils established under the Whitley model of collective bargaining was the tool for bipartite wage determination in the United Kingdom (AIYEDE R E, 2002). Donovan Model In the "Donovan model", collective bargaining played a very vital role. During this era industrial relations consisted of the bargaining relationships between unions and employers together along with the equal participation of the parties that were also linked with the bargaining activity or process. The labour government initiated with the Donovan model of collective bargaining at times when the industrial situation was deteriorating . Britain was facing a very slow economic growth, balance of payments problems and soaring inflations. To inquire about the detrimenting industrial scenario, the government had set up a royal commisiion known as the Donovan commission named after Lord Donovan ((Barrow C, Barrow, 2002). The real cause identified for the problem of messy industrial trends was ineffective collective bargaining for which a spli of bargaining between the formal industry-wide system and the informal plant approach was applied. As a consequence, a wage drift was followed whereby local agreement was preffered over national agreement as it provided higher wages. The main role of the Donovan commission was that it instilled central bargaining for effective dispute settlements. Industrial relations commission was recommended for assisting voluntary reforms. The overall impact of the Donovan model was that the regonition of the collective bargaining was widespread in the public sector which overpowered the harmonious industrial relations in comparison to the private sectors. Donovan commission identified that in many of the industries bargaining operated in conflict rather than in co-operation because the power shifted from the center to the periphery causing extreme decentralization (Barrow C, Barrow, 2002). Donovam recommemded a formalized collective bargaining system at the workplace and the development of a written, comprehensive collective agreement as well. However Donovan theory has also been criticized by many theorists as a domination of management thinking is observed under it. Many have drifted away from the theory’s orthodoxy in preference to wider range and styles of industrial relation management Free Market Model Free market model of industrial relations has its own unique characteristics under which the model has moved towards eliminating many of the statuary regulations, the growth of the emerging private sector has ultimately resulted in the weakening of the unions, moreover the enormous rate of investments in the UK by the giant multinationals have also supported the non-unionism movement. In the free era, break up of many multi-employer agreements have left a very narrow scope for collective agreements. The free market model promotes the concept of openness , equality and self regulation where employers and trade unions negotiate among themselves on pay levels and key labour conditions with minimum governmental interference or interventions.the model aims to strengthen economic competitivness and growth. Equal labour conditions for all workers are promoted along with enormous flexibility which helps in active response to the changing market circumstances without having to wait for government agreement or consent. The collective bargaining feature is used to regulate pay rather than the statutory minimum wages. Under this model, once the centralized framework of settlement for different industrial sectord has been set, an individual collective agrrement between the employer and the trade union can be initiated after that. A standard collective system is not binding on the entire industrial sector, thereby enhancing more flexibility in the system. In a free labour market, the price or the wage of a labour is determined for a short term, till the time an equilibrium is maintained between the buyers and the sellers. Collective bargaining in this model emphasises on maintaining a market wage the amount of labour demanded is equal to the amount of labour supplied (Farnham D, 2000). In a free market economy individual contracts replace collective bargaining. Focus on direct relations between worker and employer is prefered. Efficient market solutions are extended and large conflicts on the whole are eliminated. Free market emphasises on individualization but at the same time recognizes managerial domination. Management by fear and work intensification are encouraged and such kind of system prevails in the industry where conflict is supressed (Edwards K P, 2003) . The state on the whole was the cause of operation of free collective bargaining. In the post-Donovan period, starting from the year 1969 to 1979, growth of union strengths both at the shopfloor level and at the national level was given the maximum attention. The free market model focused on the management of labour through formal institutions and the extent of reform and their corresponding effects. There was clear evidence that supported the transformation from the formerly, traditional national systems of bargaining towards the level of the firm . CONCLUSION On the whole it can be said that a remarkable decline in the membership of the unions has been notified in various economies such as UK , US and Europe. In Europe, labor laws have been extended to take up collective bargaining settlements to non-unionized firms. However in America , wage agreements apply to firms where workers are unionized. The current trends are more inclined towards abandonment of the multi employer bargaining. A decline in the collective bargaining has certainly posed up numerous challenges. UK governments do not have any options as such to look at the social patterns for taking up responsibilities for employment regulations which still prevails in the EU member countries, where the framework of sector agreements remains in place. UK governments are in a dire need to set up proper regulations from both the perspectives, internal as well as internal. There have been important variations in the sectors due to shift in the balance of power, reassertion of managerial prerogative and rights.   REFERENCES Gospel H F, Palmer G, British Industrial Relations, Published by Routledge, 1993 Corby S, White G, Employee Relations in the Public Services: Themes and Issues, Published by Routledge, 1999 AIYEDE R E, 2002, DECENTRALIZING PUBLIC SECTOR COLLECTIVE BARGAINING AND THE CONTRADICTIONS OF FEDERAL PRACTICE IN NIGERIA, African Study Monographs, 23(1): 11-29, March 2002 11, http://www.africa.kyoto-u.ac.jp/kiroku/asm_normal/abstracts/pdf/23-1/11-29.pdf Barrow C, Barrow, Industrial Relations Law: Industrial Relations Law 2/E, Published by Routledge, 2002 Farnham D, Employee Relations in Context, Published by CIPD Publishing, 2000 Edwards K P, Industrial Relations: Theory and Practice, Published by Blackwell Publishing, 2003   Read More