Collective bargaining
Overview
 
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions. Collective agreements usually set out wage scales, working hours, training, health and safety, overtime
Overtime
Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:*by custom ,*by practices of a given trade or profession,*by legislation,...

, grievance
Grievance (labour)
In a trade union, a grievance is a complaint filed by an employee which may be resolved by procedures provided for in a collective agreement or by mechanisms established by an employer...

 mechanisms and rights to participate in workplace or company affairs.

The union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

 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 an industry wide agreement.
Encyclopedia
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions. Collective agreements usually set out wage scales, working hours, training, health and safety, overtime
Overtime
Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:*by custom ,*by practices of a given trade or profession,*by legislation,...

, grievance
Grievance (labour)
In a trade union, a grievance is a complaint filed by an employee which may be resolved by procedures provided for in a collective agreement or by mechanisms established by an employer...

 mechanisms and rights to participate in workplace or company affairs.

The union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

 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 an industry wide agreement. A collective agreement functions as a labor contract between an employer and one or more union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

s. Collective bargaining consists of the process of negotiation
Negotiation
Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy...

 between representatives of a union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

 and employers (generally represented by management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

, in some countries by an employers' organization
Employers' organization
An employers' organization, employers' association or employers' federation is an association of employers. A trade union, which organizes employees is the opposite of an employers' organization...

) in respect of the terms and conditions of employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...

 of employees, such as wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...

s, hours of work, working conditions and grievance
Grievance
A grievance is a wrong or hardship suffered, which is the grounds of a complaint.-History and politics:A grievance may arise from injustice or tyranny, and be cause for rebellion or revolution....

-procedures, and about the rights and responsibilities
Social responsibility
Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the...

 of trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

s. The parties often refer to the result of the negotiation as a collective bargaining agreement (CBA) or as a collective employment agreement (CEA).

History

The term "collective bargaining" was first used in 1891 by economic theorist Sidney Webb. However, collective negotiations and agreements had existed since the rise of trade unions during the nineteenth century.

International protection

The right to collectively bargain is recognized through international human rights conventions. Article 23 of the Universal Declaration of Human Rights
Universal Declaration of Human Rights
The Universal Declaration of Human Rights is a declaration adopted by the United Nations General Assembly . The Declaration arose directly from the experience of the Second World War and represents the first global expression of rights to which all human beings are inherently entitled...

 identifies the ability to organize trade unions as a fundamental human right. Item 2(a) of the International Labour Organization's Declaration on Fundamental Principles and Rights at Work defines the "freedom of association
Freedom of association
Freedom of association is the individual right to come together with other individuals and collectively express, promote, pursue and defend common interests....

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

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 and autonomy 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] is intrinsically valuable as an experience in self-government... Collective bargaining permits workers to achieve a form of workplace democracy
Workplace democracy
Workplace democracy is the application of democracy in all its forms to the workplace....

 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.

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
    John Thomas Dunlop
    John Thomas Dunlop was a U.S. administrator and labor scholar.He was the Secretary of Labor between 1975 and 1976. He was also Director of the U.S. Cost of Living Council from 1973–1974, Chairman of the U.S.Commission on the Future of Worker/Management Relations from 1993–1995 and arbitrator and...

    , 1944) states that the monopoly union has the 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 Nash Bargaining Maximin (written as Ώ = UβΠ1-β, where U is the utility function of the labour union, Π the profit of the firm and β represents the bargaining power
    Bargaining power
    Bargaining power is a concept related to the relative abilities of parties in a situation to exert influence over each other. If both parties are on an equal footing in a debate, then they will have equal bargaining power, such as in a perfectly competitive market, or between an evenly matched...

     of the labour unions).
  3. The efficient bargaining model (McDonald and Solow
    Robert Solow
    Robert Merton Solow is an American economist particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him...

    , 1981) sees the union and the firm bargaining over both wages and employment (or, more realistically, hours of work).

Empirical findings

  • Union members and other workers covered by collective agreement
    Collective agreement
    A collective agreement or collective bargaining agreement is an agreement between employers and employees which regulates the terms and conditions of employees in their workplace, their duties and the duties of the employer...

    s get, on average, a wage markup over their nonunionized (or uncovered) counterparts. Such a markup is typically 5 to 10 percent in industrial countries.
  • Unions tend to equalize the income distribution
    Income distribution
    In economics, income distribution is how a nation’s total economy is distributed amongst its population.Income distribution has always been a central concern of economic theory and economic policy...

    , especially between skilled and unskilled workers.
  • The welfare loss
    Deadweight loss
    In economics, a deadweight loss is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal...

     associated with unions is small, and no more than 0.2 to 0.5 of GDP, which is similar to monopolies
    Monopoly
    A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

     in product markets. 1

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 controversy over submitting public governments to collective bargaining agreements dates back to the 1930s. In the United States, President Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...

, 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
National Federation of Federal Employees
The National Federation of Federal Employees is an American labor union which represents about 100,000 public employees in the federal government.NFFE has about 200 local unions, most of them agency-wide bargaining units...

:

"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."

The laws governing local, regional, and national governments may allow government employees to 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 and some state and local governments in the United States have such rules. Public employee unions 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 fully represent nor bind the voters to rules or procedures that may conflict with existing or subsequently executed laws and regulations. Thus, a collective agreement providing for fixed rights such as salary rates and pension contributions could not be revised by subsequent legislatures elected by the public at large, even if such measures were required to prevent fiscal insolvency.

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. 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. 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. The reality of collective bargaining is that it is essentially a bilateral process, whereas public policymaking is a multilateral process accessible to all taxpayers on equal terms. 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 public administrators and elected officials, to the detriment of taxpayers and other competing groups and interests in the democratic process. This advantage in bargaining power is magnified with respect to certain monopolistic services provided only by the government and which are critical to the welfare and safety of the public at large, such as police and fire protection.

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. In the private sector, constitutional collective bargaining and binding arbitration agreements may deprive shareholders of stock or dividend value. 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). 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 through administrative or judicial appeal.

United States

In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...

 (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
Company union
A company union is a trade union which is located within and run by a company or by the national government, and is not affiliated with an independent trade union. Company unions were outlawed in the United States by the 1935 National Labor Relations Act, due to their use as agents for interference...

, 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. Unions are also exempt from antitrust law in the hope that members may collectively fix a higher price
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...

 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 from termination 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
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...

, which is similar to an informal 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, employees who are working in a unionized shop may be required to contribute 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 south-eastern region of the U.S., have outlawed union security clauses; this can cause controversy, as it allows individuals who benefit from the protection of union contracts to avoid paying their portion of the costs of contract negotiation. Regardless of state, the Supreme Court has held that the 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 go directly toward representation of workers.

The industrial revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 brought a swell of labor organizing in the US. The American Federation of Labor
American Federation of Labor
The American Federation of Labor was one of the first federations of labor unions in the United States. It was founded in 1886 by an alliance of craft unions disaffected from the Knights of Labor, a national labor association. Samuel Gompers was elected president of the Federation at its...

 was formed in 1886, providing unprecedented bargaining powers for a variety of workers.
The Railway Labor Act
Railway Labor Act
The Railway Labor Act is a United States federal law that governs labor relations in the railroad and airline industries. The Act, passed in 1926 and amended in 1934 and 1936, seeks to substitute bargaining, arbitration and mediation for strikes as a means of resolving labor disputes...

 (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. In 1962, President Kennedy
John F. Kennedy
John Fitzgerald "Jack" Kennedy , often referred to by his initials JFK, was the 35th President of the United States, serving from 1961 until his assassination in 1963....

 signed an executive order giving public-employee unions the right to collectively bargain with federal government agencies.

See also

  • Labour law
    Labour law
    Labour law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees...

  • Labour economics
    Labour economics
    Labor economics seeks to understand the functioning and dynamics of the market for labor. Labor markets function through the interaction of workers and employers...

  • UK labour law
  • US labor law
  • Right-to-work law
    Right-to-work law
    Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the federal Taft–Hartley Act, which prohibit agreements between labor unions and employers that make membership, payment of union dues, or fees a condition of...

  • Canadian labour law
  • 2011 Wisconsin protests
    2011 Wisconsin protests
    The 2011 Wisconsin protests were a series of demonstrations in the state of Wisconsin in the United States beginning in February involving at its zenith as many as 100,000 protestors opposing the Wisconsin Budget Repair Bill. Subsequently, anti-tax activists and other conservatives, including tea...

    , related to attempts to reduce or eliminate collective bargaining rights for public employee unions in Wisconsin
  • 2011 United States public employee protests
    2011 United States public employee protests
    In February 2011, a series of public employee protests began in the United States against proposed legislation which would weaken the power of labor unions. By March, eighteen states had proposed legislation which would remove some collective bargaining powers from unions, along with another five...


External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK