7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 1/6

Collective bargaining is a process of negotiations between employers and a group of employees

aimed at reaching agreements that regulate working conditions. The interests of the employees

are commonly presented by representatives of a trade union to which the employees belong. Thecollective agreements reached by these negotiations usually set out wage scales, working hours,

training, health and safety, overtime, grievance mechanisms, and rights to participate in

workplace or company affairs.

[1]

 

The union may negotiate with a single employer (who is typically representing a company's

shareholders) or may negotiate with a group of businesses, depending on the country, to reach anindustry wide agreement. A collective agreement functions as a labor contract  between an

employer  and one or more unions. Collective bargaining consists of the process of  negotiation 

 between representatives of a union and employers (generally represented by management, in

some countries such as Austria, Sweden and the  Netherlands  by an employers' organization) inrespect of the terms and conditions of  employment of  employees, such as wages, hours of work,

working conditions, grievance- procedures, and about the rights and responsibilities of  trade

unions. The parties often refer to the result of the negotiation as a collective bargaining 

agreement (CBA) or as a collective employment agreement (CEA).

Contents

  1 History 

  2 International protection 

  3 Economic theory 

  4 Empirical findings 

  5 Styles 

o  5.1 Continuous 

  6 As applied to public or government employees 

  7 United States   8 See also 

  9 Notes 

  10 References 

  11 External links 

History

The term "collective bargaining" was first used in the middle of 1891 by economic theorist

Beatrice Webb.[2]

 However, collective negotiations and agreements had existed since the rise of trade unions during the 18th century.

The term collective bargaining itself was coined by a British labor historian named Mrs. Sidney

Webb in 1891 (Hoffer). The National Railway Act and soon after the National Labor RelationsAct made it illegal for any employer to deny union rights to an employee. Another step in this

direction came in 1962 when president John F Kennedy issued an executive order granting

Federal employees the right to unionize and collective bargain. Collective bargaining has even

7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 2/6

 been recognized internationally as a basic human right and in 2007 the Canadian Supreme Court

ruled that "The right to bargain collectively with an employer enhances the human dignity,

liberty and autonomy of workers by giving them the opportunity to influence the establishmentof workplace rules and thereby gain some control over a major aspect of their lives, namely their 

work. ... Collective bargaining is not simply an instrument for pursuing external ends ... rather 

[it] is intrinsically valuable as an experience in self-government" (Hoffer). Even the Catholicchurch has asserted that it is imperative to protect workers rights including collective bargaining.It is widely recognized that throughout history unionized employees, both public and private,

enjoy a living wage and benefits that they deserve while not having to worry about unjust

treatment, unfair labor practices, or termination without cause[citation needed ]

.

International protection

...where free unions and collective bargaining are forbidden, freedom is lost.[1] 

Ronald Reagan, Labor Day Speech at Liberty State Park, 1980

The right to collectively bargain is recognized through international human rights conventions.Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade

unions as a fundamental human right.[3]

 Item 2(a) of the International Labour Organization's 

 Declaration on Fundamental Principles and Rights at Work defines the "freedom of association 

and the effective recognition of the right to collective bargaining" as an essential right of 

workers.[4]

 

In June 2007 the Supreme Court of Canada extensively reviewed the rationale for regarding

collective bargaining as a human right. In the case of   Facilities Subsector Bargaining 

 Association v. British Columbia, the Court made the following observations:

The right to bargain collectively with an employer enhances the human dignity, liberty andautonomy of workers by giving them the opportunity to influence the establishment of workplace

rules and thereby gain some control over a major aspect of their lives, namely their work...

Collective bargaining is not simply an instrument for pursuing external ends…rather [it] isintrinsically valuable as an experience in self-government... Collective bargaining permitsworkers to achieve a form of  workplace democracy and to ensure the rule of law in the

workplace. Workers gain a voice to influence the establishment of rules that control a major 

aspect of their lives.[5]

 

Economic theory

Different economic theories provide a number of models intended to explain some aspects of collective bargaining:

1.  The so-called Monopoly Union Model (Dunlop, 1944) states that the monopoly union hasthe power to maximize the wage rate; the firm then chooses the level of employment.

2.  The Right-to-Manage model, developed by the British school during the 1980s ( Nickell),

views the labour union and the firm bargaining over the wage rate according to a typical

7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 3/6

 Nash Bargaining Maximin (written as Ώ = UβΠ

1-β, where U is the utility function of the

labour union, Π the profit of the firm and β represents the  bargaining power  of the labour 

unions).3.  The efficient bargaining model (McDonald and Solow, 1981) sees the union and the firm

 bargaining over both wages and employment (or, more realistically, hours of work).[citation

needed ]

 

Empirical findings

  Union members and other workers covered by collective agreements get, on average, awage markup over their nonunionized (or uncovered) counterparts. Such a markup is

typically 5 to 10 percent in industrial countries.[6]

 

  Unions tend to equalize the income distribution, especially between skilled and unskilled

workers.[6]

 

  The welfare loss associated with unions is small, and no more than 0.2 to 0.5 of  GDP, 

which is similar to monopolies in product markets.[6]

 1

Styles

Continuous

Continuous bargaining is a method of collective bargaining which retains a permanent, rolling

negotiation between management and a permanent committee of union representatives.

As applied to public or government employees

The examples and perspective in this section may not represent a worldwide view of 

the subject. Please improve this article and discuss the issue on the talk page. (November 

2011) 

The neutrality of this section is disputed. Please do not remove this message until thedispute is resolved. (August 2011) 

The controversy over submitting public governments to collective bargaining agreements dates

 back to the 1930s.[7]

 In the United States, President Franklin D. Roosevelt, a supporter of collective bargaining rights for employees in the private sector, indicated his opposition to such

agreements for government or public employee unions in a 1937 letter to the  National Federation

of Federal Employees: 

"The desire of Government employees for fair and adequate pay, reasonable hours of work, safe

and suitable working conditions, development of opportunities for advancement, facilities for 

fair and impartial consideration and review of grievances, and other objectives of a proper employee relations policy, is basically no different from that of employees in private industry.

Organization on their part to present their views on such matters is both natural and logical, but

7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 4/6

meticulous attention should be paid to the special relationships and obligations of public servants

to the public itself and to the Government.

All Government employees should realize that the process of collective bargaining, as usually

understood, cannot be transplanted into the public service. It has its distinct and insurmountable

limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the

employer in mutual discussions with Government employee organizations. The employer is the

whole people, who speak by means of laws enacted by their representatives in Congress.Accordingly, administrative officials and employees alike are governed and guided, and in many

instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the

functions of any organization of Government employees. Upon employees in the Federal service

rests the obligation to serve the whole people, whose interests and welfare require orderliness

and continuity in the conduct of Government activities. This obligation is paramount. Since their 

own services have to do with the functioning of the Government, a strike of public employeesmanifests nothing less than an intent on their part to prevent or obstruct the operations of 

Government until their demands are satisfied."[7]

 

This letter would suggest that the former president believed that "collective bargaining, as

usually understood, cannot be transplanted into the public service" as a result of the possibility of strikes shutting down the government, not that it should not exist at all.

The laws governing local, regional, and national governments may allow government employeesto form unions, yet prohibit them from engaging in collective bargaining over one or more rights

or benefits such as pay, personnel rights, health insurance, or pension contributions, as well as

 preventing them from going on strike against the government. Both the federal government andsome state and local governments in the United States have such rules.[8][9]

 Public employeeunions are usually prohibited from bargaining collectively with respect to pay or other benefits

and/or rights on the grounds that their employer, the general public, is not represented in such

collective bargaining agreements but rather by administrative officials who cannot fullyrepresent nor bind the voters to rules or procedures that may conflict with existing or 

subsequently executed laws and regulations.[7]

 Thus, a collective agreement providing for fixed

rights such as salary rates and pension contributions could not be revised by subsequentlegislatures elected by the public at large, even if such measures were required to prevent fiscal

insolvency.[7]

 

Another reason cited for not granting collective bargaining rights to public employees is the

advantage held by public employee in rights granted under existing civil service or personnel

rules.[10]

 In countries such as the United States, the courts have repeatedly held that public

employees possess a property interest in their jobs, which interest triggers constitutional protections to the employee including due process of law.

[10] In fact, public employees without

collective bargaining rights frequently have more protection against arbitrary and unjust

employer action than do private employees with such rights.[10]

 The reality of collective bargaining is that it is essentially a bilateral process, whereas public policymaking is a

7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 5/6

multilateral process accessible to all taxpayers on equal terms.[11]

 This conflict raises the

 possibility that over time, public employee unions could wield an insurmountable advantage in

 political power when negotiating government wage and personnel policies with publicadministrators and elected officials, to the detriment of taxpayers and other competing groups

and interests in the democratic process.[11]

 This advantage in bargaining power is magnified with

respect to certain monopolistic services provided only by the government and which are criticalto the welfare and safety of the public at large, such as police and fire protection.[11]

 

Collective bargaining agreements with public employee unions also affect taxpayer rights to due process of law, that is, the right to contest deprivations of property or rights without the right of 

individual appeal.[12]

 In the private sector, constitutional collective bargaining and binding

arbitration agreements may deprive shareholders of stock or dividend value.[12]

 Shareholders,

however, always have the option to liquidate their interests in a particular private company if  bargaining or arbitration with unions affects the value of their property (stock).

[12] In contrast,

negotiated increases in the cost of pay, pensions, health insurance and other benefits for public

employees deprive both existing and subsequent taxpayers of their property through reduction of 

their income via increased taxation, without due process and right of redress throughadministrative or judicial appeal.[12]

 

United States

In the United States, the  National Labor Relations Act (1935) covers most collective agreements

in the private sector. This act makes it illegal for employers to discriminate, spy on, harass, or terminate the employment of workers because of their union membership or to retaliate against

them for engaging in organizing campaigns or other "concerted activities," to form company

unions, or to refuse to engage in collective bargaining with the union that represents their 

employees. It is also illegal to require any employee to join a union as a condition of 

employment.[13] Unions are also exempt from antitrust law in the hope that members maycollectively fix a higher price for their labor.

At a workplace where a majority of workers have voted for union representation, a committee of 

employees and union representatives negotiate a contract with the management regarding wages,

hours, benefits, and other terms and conditions of employment, such as protection fromtermination of employment without just cause. Individual negotiation is prohibited. Once the

workers' committee and management have agreed on a contract, it is then put to a vote of all

workers at the workplace. If approved, the contract is usually in force for a fixed term of years,and when that term is up, it is then renegotiated between employees and management.

Sometimes there are disputes over the union contract; this particularly occurs in cases of workers

fired without just cause in a union workplace. These then go to arbitration, which is similar to aninformal court hearing; a neutral arbitrator then rules whether the termination or other contract breach is extant, and if it is, orders that it be corrected.

In 28 U.S. states,[14]

 employees who are working in a unionized shop may be required tocontribute towards the cost of representation (such as at disciplinary hearings) if their fellow

employees have negotiated a union security clause in their contract with management. Dues

usually vary, but are generally 1-2% of pay. Some states, especially in the south-central and

7/29/2019 Collective Bargaining is a Process of Negotiations Between Employers and a Group of Employees Aimed at Reachi…

http://slidepdf.com/reader/full/collective-bargaining-is-a-process-of-negotiations-between-employers-and-a 6/6

south-eastern region of the U.S., have outlawed union security clauses; this can cause

controversy, as it allows some net beneficiaries of the union contract to avoid paying their 

 portion of the costs of contract negotiation. Regardless of state, the Supreme Court has held thatthe Act prevents a person's union dues from being used without consent to fund political causes

that may be opposed to the individual's personal politics. Instead, in states where union security

clauses are permitted, such dissenters may elect to pay only the proportion of dues which godirectly toward representation of workers.[15]

 

The industrial revolution  brought a swell of labor organizing in the US.[citation needed ]

TheAmerican Federation of Labor  was formed in 1886, providing unprecedented bargaining powers

for a variety of workers.[16]

 The Railway Labor Act (1926) required employers to bargain

collectively with unions.

In 1930, the Supreme Court, in the case of Texas & N.O.R. Co. v. Brotherhood of Railway

Clerks, upheld the act's prohibition of employer interference in the selection of bargaining

representatives.[16]

 In 1962, President Kennedy signed an executive order giving public-

employee unions the right to collectively bargain with federal government agency 

n en