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 employees. 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 relationship. 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 basis. 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 organisation. 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 intende …
