Collective Bargaining Role in the Employment Relationship - Essay Example

Collective Bargaining Section March 2007 ‘Collective bargaining is the most appropriate channel to redress the power imbalance within the employment relationship.’ Introduction Whether society likes it or not, employment relationship is bound to take an imbalance turn given that the needs of its manpower foundation is ignored or imparted with less attention. Take the case of Company A who is being asked by its employees to provide free dental insurance or allowance since the latter deemed that the former could very well provide for such simple benefit. On the other hand, Company B is being demanded by its employees to raise their income by 5% in view of the fact that the company administration failed to uphold the yearly income increase of 1% for the last five years. With the cases of Company A and B, such demands can be regarded as a non-issue since it is the right of every employee to be provided with their basic needs. However, the unwillingness of employers to grant the aforementioned requests pose a big problem, and might eventually strain the relationship between the management and its numerous employees. Without a proper venue to hear both parties, a collective decision may render impossible to happen. If this happens, employees would have no other choice but to go to the streets and hold the picket lines until other labour unions or government agencies get hold of their case. Hence, there is a need to emphasise the fact that every company or organisation must acknowledge the rights of their employees. And the only way to meet halfway through the conflict is through a collective bargaining agreement between the two parties involved (Cornell, 2007). Collective Bargaining In the UK alone, collective bargaining has been exercised by at least 15.5 million employees from a manpower population of about 17.5 million since 1945 (Cite filename: Personnel & HRM). British Academic Beatrice Webb was said to have coined such term in her 1891 book entitled ‘Cooperative Movement’ in an effort to provide an alternative movement from individual bargaining between a company and its individual employee. However, it was the definition made by Allan Flanders, as a ‘process of rule-making leading to joint regulation in industry,’ that further refined the meaning of collective bargaining (Wikipedia, 2007). He even expanded the significance of the term as not only limited to determining pay but as well as in the (cite filename: employee relations): …management acceptance of a style of employment relationship which is based on the legitimisation of the expression of the different interest within the organisation (conflict), on joint regulation (constraining the unilateral exercise of managerial authority over employees) and on the principle of employee involvement and influence in a range of organisational decision-making. Recent denotations of collective bargaining have been simplified and defined as (Cite filename: Personnel & HRM): …as the process whereby procedures are jointly agreed and wagers and conditions of employment are settled by negotiations between employers, or associations of employers, and workers’ organizations. On the other hand, Lewis (cite filename employee relations Philip lewis) further implied the meaning of the term as: …a voluntary, formalised process by which employers and independent unions negotiate, for specified groups of employees, terms and conditions of employment and the ways in which certain employment-related issues are regulated at national, organisational and workplace levels. From the word itself, collective bargaining emphasises the move for a ‘collective action’ and not an ‘individual action’ of various key players within the organisation. Furthermore, it is also concerned with developing and establishing rules, as well as the settlement of employment conditions through a compromising agreement to which both parties agree with. Indeed, certain disagreements between the two parties inevitably arise. But what makes collective bargaining distinct from the process of consultation is the fact that the former includes the element of negotiation (Boone & Davis, 1999). On the other hand, the latter settle issues and outcomes in a unilateral basis. Main Functions According to ___ (cite filename: HRM in contemporary approach), the collective bargaining process has three distinct functions such as: market or economic, decision-making and governmental function(s). The market or economic function involves the collective agreement on the price of labour and other related terms of agreement to which the employees will work for the employer. This issue has often been the case for most collective bargaining agreements as employees only hope for and strive for what they think they deserve to attain. On the other hand, the decision-making function offers an opportunity for employees to be able to partake, involve and contribute in policy-making procedures that shall be utilised as a formal work guideline in the organisation. Ideally speaking, this function should always be the case for all collective bargaining agreements. However, in reality, top-down organisations tend to delineate from this type of function as this provision further complicates the original organisational structure. And lastly, the governmental function establishes rules that govern the relationship between the employer and employee. This aspect emphasises that bargaining is a political process that ‘establishes a constitution.’ Realistically speaking, this function may only be true to its form in a continuous process, and not on a single collective bargaining agreement deal. Establishing the so-called constitution between the employer and employee is gradual, depending on how time has changed the needs and wants of its very people. Not unless the human resource arm of the company has already established some guidelines and procedures, connecting the thin line between the two parties is established through time (Miernyk, 1965). Strengths of Collective Bargaining Structurally speaking, collective bargaining is the strongest link that binds the organisation with its loyal employees, particularly in cases where it is registered in a Labour Court (ICTU, 2007). For cases that is not legally bonded, rest is assured that the goodwill and commitment of both parties in honouring the agreement. Furthermore, corporations and organisations would be able to lessen its staffing turnover rate, reduce cost of hiring new employees and further strengthen the loyalty base of its constituents. It is essential to note that a low staffing turnover rate implies that the organisation has a good management base. On the other hand, it also promotes democracy and greater equality among various trade unions and corporations (cite filename: HRM in contemporary approach). It had also been instrumental in implementing the necessary restructuring that is required for the industry to meet today’s modern times. Such restructuring may encompass in the company’s organisational structure, operational activities, production or other pertinent processes involved in resolving interest, enhancing organisational productivity and managing employment contracts. Since its implementation, more workers are now being consulted, informed and are allowed to voice out their opinions in every strategic step that the management will undertake such as performance appraisal, health and safety, staffing, hiring and firing and the like. In cases where management cannot grant the wishes of the trade unions, as previously mentioned in the text, the common venue allows both parties to rationally and objectively discuss the issue at hand. Employees would be able to better understand the current situation of the company, primarily the inability of the organisation to grant their needs, and re-adjust their demands according to the capacity of the management. With such compromising agreement, the company would be able to avoid considerable financial losses while employees are able to attain their needs. This win-win situation is the real essence of what collective bargaining is all about (cite filename employee relations Philip lewis). Criticisms relating to Collective Bargaining Despite the reported effectiveness of collective bargaining, surveys suggest that its utilisation has considerably declined in recent years. In effect, no effective alternative has been devised in order to address collective interest representation (cite filename: dynamic of employee relations 2004). If and when there exists some bargaining initiatives, employees are forced to agree and sign a contract with the following provisions (cite filename: hrm in contemporary approach): (a) that only one trade union would be recognised by the management, particularly in single-union deals; (b) trade unions are forced to fulfil the behavioural expectations of the management so as to attain their goals; (c) employees are also forced to comply with the no-strike clause in the collective bargaining agreement contract, such that union negotiators are denied of a threat of strike action in case of bargaining breakdown and the fact that employees are denied the option of withdrawing their labour independently; and (d) collective bargaining agreements in the UK fail to include a pendulum arbitrator that will act as a third party in settling the issues between management and employees. The Role of Collective Bargaining in Human Resource Management (HRM) Strategies Given the strengths and weaknesses of collective bargaining, the role of the management’s human resource arm has been crucial in developing high commitment between the management and the trade union (cite filename employee relations Philip lewis). With HRM strategies, employees are guided accordingly in the current capabilities of the management and make a compromise agreement based on the needs of the former. Furthermore, it also helps in regulating new working policies within the organisation, as mentioned in the bargaining agreement. For the part of the HRM, it can suggest policies what would improve and enhance the working relations within the organisation. Policy-making is essential in the overall structure of the company as it is in this aspect people rely for solutions in times of conflict or misunderstanding. Conclusion As a conclusion, the move to have a collective bargaining agreement, in accordance with the HRM strategies, would allow and enhance the role of employees in suggesting ways and means to improve current management practices. Through time, there will be less need for employees to join the picket lines as employers are able to make a clear and concise forecast of their needs and wants. Thus, collective bargaining will become only a thing of the past as the role and needs of employees are given the utmost priority within the organisational structure. References Cite all other references mentioned in the text.  Boone, L. E. & Davis, K. L. 1999, Contemporary Business, Tryden Press, Texas. Cornell.edu. ‘Collective Bargaining,’ Retrieved March 2007 from website: . ICTU. 2007, ‘Bargaining,’ Retrieved March 2007 from website: . Miernyk, W. H. 1965, The Economics of Labor and Collective Bargaining, Heath, Boston. Wikipedia: The Free Encyclopedia. 2007, ‘Collective bargaining,’ Wikipedia. Retrieved March 2007 from website: . Read More