3.3 Collective bargaining process

Collective bargaining is a crucial process where unions and employers negotiate employment terms. It involves preparation, negotiation, ratification, and administration of agreements. The process aims to balance the interests of workers and management.

Bargaining strategies can be distributive or integrative, positional or interest-based. Power dynamics, tactics, and legal frameworks shape negotiations. Outcomes include economic and non-economic terms, with public sector bargaining having unique characteristics.

Collective bargaining overview

• Collective bargaining is a process of negotiation between unions and employers regarding the terms and conditions of employment of employees
• The result of collective bargaining procedures is called a collective bargaining agreement (CBA)
• Collective agreements may cover wages, working time, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs

Bargaining process steps

Preparation for bargaining

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• Preparation involves composition of a negotiation team
• Both union and management gather and analyze information to support their bargaining positions
• Involves setting the groundrules for negotiations

Negotiation of agreement

• Negotiation is the core of the bargaining process where the parties discuss their positions and proposals
• Typically proceeds through a series of bargaining sessions until an agreement is reached or an impasse occurs
• Effective negotiations involve both presenting one's own demands and listening and responding to the other side

Ratification of agreement

• Once a tentative agreement is reached, it must usually be ratified by the union membership and/or approved by senior management
• The ratification process is spelled out in the union's constitution and bylaws
• If the agreement is not ratified, the parties return to the bargaining table

Administration of agreement

• After the agreement is finalized, it must be implemented and administered
• This includes interpreting the agreement to resolve disputes that arise during the contract term
• Both union and management have a shared responsibility to ensure the agreement is followed

Bargaining strategies

Distributive vs integrative bargaining

• Distributive bargaining assumes a "fixed pie" that has to be divided between the parties
  • Leads to a focus on claiming value for one's own side
• Integrative bargaining looks for "win-win" solutions that can benefit both parties
  • Focuses on creating value and finding mutual gains

Positional vs interest-based bargaining

• In positional bargaining, each side takes a definite stance and argues for their positions
  • Can lead to an adversarial "us vs. them" approach
• Interest-based bargaining focuses on the underlying concerns of each party
  • Encourages joint problem-solving to find a solution that satisfies each side's interests

Bargaining power dynamics

Sources of union power

• The ability to disrupt production through strikes or slowdowns
• Control of the supply of labor with scarce skills
• Political influence and public support

Sources of management power

• Control over capital resources and investment decisions
• Ability to withstand a strike by using strikebreakers or moving production
• Leverage provided by high unemployment in the external labor market

Relative bargaining power

• The balance of power between union and management depends on their relative strengths and weaknesses
• Power often varies with the business cycle, shifting in management's favor during economic downturns
• Government policy can also affect the balance of power (labor law, regulations, etc.)

Bargaining tactics

Common union tactics

• Threatening or conducting a strike
• Organizing public protests or boycotts to pressure the employer
• Partnering with other unions in solidarity

Common management tactics

• Threatening to close a facility or move production elsewhere
• Communicating directly with workers to discourage support for the union
• Hiring replacement workers to operate during a strike

Impasse resolution methods

• Mediation: A neutral third party facilitates discussions and offers suggestions
• Fact-finding: A neutral party investigates and issues a non-binding report
• Arbitration: A neutral third party makes a final, binding decision to resolve a dispute

Collective bargaining outcomes

Economic contract terms

• Wages and salaries
• Bonuses and incentive pay
• Benefits (health insurance, retirement plans, paid leave, etc.)

Non-economic contract terms

• Job security provisions
• Seniority rights (for layoffs, promotions, shift assignments, etc.)
• Grievance and arbitration procedures
• Health and safety protections

Contract duration

• CBAs typically last for a defined period (e.g., three years)
• Gives both parties a period of stability
• May include provisions for reopening negotiations if specific issues arise

Legal framework for bargaining

Duty to bargain in good faith

• Under U.S. labor law, unions and employers must bargain "in good faith"
• Requires meeting at reasonable times and places and exchanging relevant information
• Does not require reaching an agreement or making concessions

Mandatory vs permissive subjects

• Mandatory subjects (wages, hours, working conditions) must be bargained if raised
• Permissive subjects (most business decisions) may be bargained but are not required
• Parties cannot take unilateral action on mandatory subjects without bargaining

Prohibited bargaining conduct

• Certain practices ("unfair labor practices") are prohibited
  • Refusal to bargain, discrimination against union supporters, bargaining in bad faith
• Violations can lead to legal sanctions through the National Labor Relations Board (NLRB)

Bargaining in the public sector

Differences from private sector

• Public sector unions often have more limited bargaining rights
  • Subjects of bargaining may be restricted by law
  • Right to strike is often prohibited
• Political factors play a larger role (budgets, elected officials, public opinion)

Limitations on bargaining rights

• State laws vary widely in the scope of public sector bargaining
  • Some states prohibit it entirely; others allow broad negotiations
• Federal employees have more limited bargaining rights than private sector
  • Wages are set by Congress, not negotiated

International perspectives on bargaining

Bargaining systems in other countries

• Collective bargaining institutions vary across countries
  • Centralized bargaining (Sweden): National agreements set standards for whole industries
  • Sectoral bargaining (Germany): Negotiations at industry level, with local flexibility
  • Decentralized bargaining (Canada): Negotiations at company or workplace level
• Level of bargaining has implications for wage inequality, macro flexibility

Impact of globalization on bargaining

• Increased capital mobility and trade put pressure on bargaining systems
  • Threat of production shifts weakens union bargaining power
  • Pressure for decentralization and flexibility
• Rise of multinational companies poses challenges
  • Mismatch between globalized firms and national unions/laws
• Some unions seeking to coordinate across borders to boost leverage