Collective Bargaining

Bargaining Power Bargaining power - the ability of one side to secure

the other side’s agreement to its terms

The employer’s bargaining power is limited by the size of its inventory, the structure of its operation, its competitiveness, whether the business is seasonal, whether it can operate during a strike, and its labour costs

The union’s bargaining power includes such factors as the strength of commitment, access to strike funds, and the timing and effectiveness of a possible strike

Relationship Between Parties

The relationship between the parties includes the following:

Each side’s motivation to be competitive or cooperative with the other side

Each side’s attitudes and beliefs about the legitimacy of the other side’s leadership

The level of trust each side has in the other

Each side’s feelings of friendliness or hostility toward the other

Stages of Bargaining Pre-negotiation stage Establishing the negotiation range Narrowing the negotiation range Crisis stage Ratification stage

Pre-negotiation Stage

Each side determines its priorities, goals and ultimate proposals for the upcoming negotiations; some proposals are considered essential, while others may be traded or “dropped off the table” once negotiations have begun

Establishing the Bargaining Range – First formal session Both parties introduce their bargaining

team members and present their proposals

The chief negotiator for each side orally presents the rationale for each proposal to the other side

Purposes of oral presentations: Establish the bargaining range Demonstrate each side’s degree of commitment Provide an opportunity for each side to explain the

reasoning behind its proposals and thereby influence the perceptions and expectations of the other side

Narrowing the Bargaining Range

Each team enters negotiations with an initial offer and a bottom line position for each proposed item Initial offer – first proposal given to the other

side Bottom line – absolute minimum the team

would be willing to accept During this stage, both sides start to

retreat from their original positions in an attempt to find a point where a mutually satisfactory resolution can be reached

Narrowing the Bargaining Range

The zone of agreement dictates each side’s decisions in narrowing the bargaining range and, ultimately, whether the parties reach an agreement.

Narrowing the Bargaining Range (Continued)

If there is no zone of agreement, either there will be no settlement or each team will have to adjust its bottom line

The timing of counter-proposals and concessions is crucial during this stage; both sides must exhaust their arguments for their own positions

This is often the longest of all the bargaining stages

The Crisis Stage During the crisis stage, one or both sides

must decide whether to settle or to use economic pressure such as a strike or lockout

This decision can be triggered by disputes over a single issue or over a “package” deal involving several interrelated items

This stage can be short or lengthy, depending on the strength of the parties’ resolve and their resources

Ratification Ratification is necessary once terms are agreed

upon. The teams return to their constituencies and present the negotiated terms for approval

The union will generally conduct a membership vote and management will review the agreement with all relevant stakeholders .

If one side rejects the proposed agreement, the parties must return to the table

Once the agreement is ratified, representatives from both sides sign it to bring it into legal effect

Summary of How Negotiations Proceed At the first joint bargaining meeting the

teams exchange written proposals Each negotiating team then holds its own

private meetings (caucus) to formulate a response

At the second and subsequent joint meetings, each team makes counter-proposals and uses a variety of strategies and tactics to uncover the other team’s goals and priorities

These meetings continue until an agreement is reached or an impasse is declared