Collective Bargaining In The Workplace

This essay has a total of 4290 words and 23 pages.

Collective Bargaining in the Workplace

Britain has one of the most developed systems of collective
bargaining in the world, especially amongst manual workers. Its
sophistication is one of the main reasons why British workers traditionally
pressed less for the statutory provision of basic rights in the work place
than their Continental colleagues. Most trade unionists prefer to put a
grievance ‘through procedure' rather than go to an industrial tribunal.
Dubin has described collective bargaining as ‘the great social
invention that has institutionalised industrial conflict' and by the
Donovan Commission as ‘right which is or should be the prerogative of every
worker in a democratic society'. It could be also defined as a method of
determining terms and conditions of employment through the process of
negotiation and agreement between representatives of management and
Collective bargaining does not require a comprehensive collective
agreement for a stated period of time. It requires only the recognition of
the bargaining agency and the principle of action that mutual problems be
jointly considered and jointly decided. The desire of each party to be
assured about the other's future conduct - that is, the desire for
stability and security - makes the comprehensive collective agreement for a
term the normal concomitant of collective bargaining. It requires each
party to think into the future, to anticipate situations and to determine
solutions before situations arise. It requires the making of policy - which,
when agreed upon, becomes the collective agreement.
The heart of the collective agreement - indeed, of collective
bargaining - is the process for continuous joint consideration and
adjustment of plant problems. And it is this feature which indicates the
difference between the collective labour agreement and commercial contracts
generally. Commercial contracts are concerned primarily with ‘end results';
collective agreements, with continuous process. Workers organised into
trade unions and bargaining with employers provides a measure of
countervailing power to the powers of management, and that is fundamental
to industrial relations. The collective bargaining process provides a
formal channel through which the differing interests of management and
employees may be resolved on a collective basis. The collective agreement
is not made between parties who seek each other out for the purpose of
entering into a business transaction and who can shop around among
competitors for the most favourable connection. It is made between parties
who find themselves already in a joint enterprise and who have little or
no choice in selecting each other for the relationship. The union does not
choose the employer and the employer does not choose the union. Both are
dependent on the same enterprise and neither can pull out without
destroying it. Even when a dispute between them results in suspension of
operations, they must strive so to adjust the dispute as to resume their
Whilst undoubtedly the process of collective bargaining has become
more formalised at the organisation level, many arrangements (agreements)
are still made between managers and shop stewards in respect of operational
situations at the departmental or workgroup level.
Collective bargaining through collective agreements places social
constraints upon managerial discretion. One type of constraint consists of
the labour standards or norms established by collective agreements relating
to pay and hours which are translated into the terms and conditions of
employment for employees represented by trade unions. Such standards limit
managerial discretion in setting wage, hours and other substantive terms of
employment. At the same time these standards also offer the advantage to
management of harmonising labour costs throughout the industry.
The second constraint is related to the bargaining over the rules,
which govern the continuing relationship between unions and employers.
These rules are often recorded in procedure agreements or the procedural
clauses of collective agreements: negotiating procedures, bargaining rights
and management rights clauses, shop stewards' facilities, redundancy,
disciplinary and grievance procedures. This is the so-called ‘contractual
function' of collective agreements.
Also collective agreements can provide a joint policy for
redundancies or the introduction of new technology providing consultation
rights for trade union representatives as well as rights governing
seniority, job guarantees and measures to avoid redundancies.
Collective rather than individual bargaining with an employer is
necessary for effective voice at the work place for two reasons. First,
many important aspects of an industrial setting are ‘public goods', which
affect the well being of every employee. As a result the incentive for any
single person to express his preferences, and invest time and money to
change conditions is reduced. Safety conditions, lighting, heating, the
firm's policies on dismissal, work-sharing, promotion, its formal grievance
procedure and pension plan - all obviously affect the entire work force in
the same way that defence, sanitation, and fire protection affect all
citizens of a town. ‘Public goods' at the work place require collective
decision-making. Without a collective organisation, the incentive for the
individual to take into account the effects of his actions on others, or
express his preferences, or invest time and money in changing conditions,
is likely to be very small.
A second reason collective action is necessary is that workers who
are not prepared to exit will be unlikely to reveal their true preferences
to their bosses, for fear of some sort of punishment. The essence of the
employment relationship under capitalism is the exchange of money between
employer and employee in return for the employer's control over a certain
amount of the worker's time. The employer seeks to use his employee's time
in a way that maximises the value of the output the employee produces. As a
result, the way in which the time purchased is utilised must be determined
by some interaction between workers and their boss. Since the employer can
dismiss a protester, individual protest is dangerous.
In a unionised setting, by contrast, the union takes account of the
preferences of all workers to form an average preference that typically
determines its position at the bargaining table. Through collective
bargaining employees can achieve better terms because the employer cannot
take advantage of the individual's differing personal circumstances and
needs. As Harbinson stated, the important difference between individual and
collective bargaining lies in the fact that the latter 'is strictly a
relationship between organisations' and therefore an indirect regulation of
the relationship between management and employee.
There are three basic functions of collective bargaining:

(a) A market or economic function - it determines on what terms
labour will continue to be supplied to a company by its present
employees or will be supplied in the future by newly hired workers.
In this context the collective agreement may be regarded as a
formal contract and the grievance procedure as a non-legal means
for ensuring the employer's compliance with its terms. The process
is primarily concerned with determining the substantive terms on
which people are being employed.

(b) A governmental function in which collective bargaining may
be regarded as principally a political process based on the
mutual dependency of the parties and the power of each to 'veto'
the acts of the other. The content of collective bargaining is
concerned as much with procedural issues and the distribution of
power and authority as it is with substantive issues and the
distribution of money.

(c) A decision making function which allows workers, through
their union representatives, to participate in the determination
of the policies, which rule their working conditions. The
collective agreement is in effect, a formal memorandum of the
decisions that have been reached and is a limitation on
management's freedom and discretion to act unilaterally.

Here is important to note the necessary conditions under which collective
bargaining can exist and function:

(a) the employees themselves are prepared to identify a
commonality of purpose, organise and act in concert; and

(b) management is prepared to recognise their organisation
and accept a change in the employment relationship, which
constrains its ability to deal with employees on an individual

The determinants of conflict between the management and the workers
union in an organisation are easy to see when we consider the objectives of
both sides. Management's objective in collective relations may fall into
four broad categories: first, the preservation and strengthening of the
business enterprise; second, the retention of effective control over the
enterprise; third, the establishment of stable and ‘businesslike'
relationships with the bargaining agents; and fourth, promotion of certain
broad social and economic goals.
The union may threaten the survival and growth of the enterprise in
several ways. It may press demands, which impair the financial health of
the business, or it may undermine management's efforts to build a loyal
On the other hand the of the union leadership fall into the
following categories: first, the preservation and strengthening of the
union as an institution; second, the carrying out of the formal purpose of
the union to get ‘more' for the membership; third, the acquisition of a
greater measure of control over jobs to implement the first two objectives;
and fourth, the pursuit of certain broad social and economic goals.
So, simply placing management's objectives alongside those of the
union gives us a partial explanation of why labour-management relations in
the mass production industries often involve a struggle for power. The
union's quest for ‘more' appears to be in conflict with management's desire
to protect the financial well being of the firm. Management's concern for
retaining its prerogatives must often be in basic conflict with the union's
objectives of acquiring control over jobs. The labour leader's notion of
human welfare often conflicts with management's picture of ‘the economic
facts of life'. Management and union leaders are simply after different
things when they face each other at the bargaining table.
The story of the long period of ‘voluntarism' from the mid-
nineteenth century to the early 1960s and the emergence of fully developed
collective bargaining system without legal support was partly a product of
a strong trade union movement. Trade unions are regarded as a form labour
cartel which function is to redress the imbalance in the labour market
indirectly by restricting employee competition for work through control of
the number of entrants and directly by regulating the price of labour. Some
employers and employers associations, from the early stage, were prepared
to establish systems of collective bargaining first, at district level,
later at industry-wide level and more recently at company-wide level.
However, throughout the formative years of UK labour relations a
significant number of employers were prepared to recognise trade unions and
deal with them on the basis of voluntary joint dispute procedures and
collective agreements.
Those employers and employers' organisations who gave early
recognition to the trade union of skilled craftsmen, were careful to
prevent the right to manage in the structure of collective bargaining.
Collective bargaining was not based on the work shop where management
decisions about workings, the place of work or discipline and dismissal
could be brought into collective negotiation. The evolution of trade union
along occupational lines was favourable to employers because it reinforced
the structure of district bargaining and divided the work force in any firm
or work place. The employers' acceptance of the recommendations of the
Whitely Committee of 1918 for the formal conciliation and negotiating
machinery at industry-wide level which led to the development of industry-
wide collective bargaining in the UK by the 1940s, occurred because
employers saw such structure in their interest. From the employer's
viewpoint ‘voluntarism' had the advantage of limiting the extent of legal
regulation of busine ss activity and managerial decision making.
Despite its role as a central activity of the industrial relations
system, collective bargaining is most noted for its lack of legal
regulation. In the UK, unlike the USA and other countries, there is no
legal requirement on the employer either to recognise a trade union for
collective bargaining, nor have collective agreements been regarded as
contracts capable of legal enforcement between the signatory parties - the
employer and union. It is only through the express or implied incorporation
of the collective agreement into the individual contract of employment that
there is any legal basis for enforcing the terms of a collective agreement.
This lack of external regulation has given rise to the notion of voluntary
collective bargaining.
From 1871 to 1971 the legal status of collective agreements was
unclear. In 1968, the Donovan Commission reported a consensus of opinion
against an assumption of intention for legal enforceability. The consensus
suggested in the Ford case that collective agreements could be presumed not
to be legally binding was first challenged in the Industrial Relations Act
1971. This Act choose to give legal weight to the peace obligation
contained in collective agreements by creating a statutory presumption that
collective agreements were legally binding unless the parties stipulated
otherwise. But there was an almost universal tendency for employers to join
with trade unions to negate the statutory presumption by inserting into the
agreement the phrase ‘This is not a legally enforceable agreement' - (the ‘
Tinalea' section). When the Labour party was returned to power in 1974, s
34 of the 1971 Act was replaced by s 18 of the Trade Union and Labour
Relations Act 1974 which restored the presumption against legal
enforce ability. In its present form, as s 179 of TULR(C)A 1992, it reads
as follows:

(1) Any collective agreement shall be conclusively presumed
not to have been intended by the parties to be a legally
contract unless the agreement -
(a) is in writing, and
(b) contains a provision which (however expressed) states that
the parties intend that the agreement shall be a legally
enforceable contract

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