Britain has one of the most developed systems of collectivebargaining in the world, especially amongst manual workers. Itssophistication is one of the main reasons why British workers traditionallypressed less for the statutory provision of basic rights in the work placethan their Continental colleagues. Most trade unionists prefer to put agrievance through procedure’ rather than go to an industrial tribunal.
Dubin has described collective bargaining as the great socialinvention that has institutionalised industrial conflict’ and by theDonovan Commission as right which is or should be the prerogative of everyworker in a democratic society’. It could be also defined as a method ofdetermining terms and conditions of employment through the process ofnegotiation and agreement between representatives of management andCollective bargaining does not require a comprehensive collectiveagreement for a stated period of time. It requires only the recognition ofthe bargaining agency and the principle of action that mutual problems bejointly considered and jointly decided. The desire of each party to beassured about the other’s future conduct – that is, the desire forstability and security – makes the comprehensive collective agreement for aterm the normal concomitant of collective bargaining. It requires eachparty to think into the future, to anticipate situations and to determinesolutions 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 collectivebargaining – is the process for continuous joint consideration andadjustment of plant problems. And it is this feature which indicates thedifference between the collective labour agreement and commercial contractsgenerally. Commercial contracts are concerned primarily with end results’;collective agreements, with continuous process. Workers organised intotrade unions and bargaining with employers provides a measure ofcountervailing power to the powers of management, and that is fundamentalto industrial relations.
The collective bargaining process provides aformal channel through which the differing interests of management andemployees may be resolved on a collective basis. The collective agreementis not made between parties who seek each other out for the purpose ofentering into a business transaction and who can shop around amongcompetitors for the most favourable connection. It is made between partieswho find themselves already in a joint enterprise and who have little orno choice in selecting each other for the relationship. The union does notchoose the employer and the employer does not choose the union. Both aredependent on the same enterprise and neither can pull out withoutdestroying it. Even when a dispute between them results in suspension ofoperations, they must strive so to adjust the dispute as to resume theirWhilst undoubtedly the process of collective bargaining has becomemore formalised at the organisation level, many arrangements (agreements)are still made between managers and shop stewards in respect of operationalsituations at the departmental or workgroup level.
Collective bargaining through collective agreements places socialconstraints upon managerial discretion. One type of constraint consists ofthe labour standards or norms established by collective agreements relatingto pay and hours which are translated into the terms and conditions ofemployment for employees represented by trade unions. Such standards limitmanagerial discretion in setting wage, hours and other substantive terms ofemployment. At the same time these standards also offer the advantage tomanagement 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 proceduralclauses of collective agreements: negotiating procedures, bargaining rightsand management rights clauses, shop stewards’ facilities, redundancy,disciplinary and grievance procedures. This is the so-called contractualAlso collective agreements can provide a joint policy forredundancies or the introduction of new technology providing consultationrights for trade union representatives as well as rights governingseniority, job guarantees and measures to avoid redundancies. Collective rather than individual bargaining with an employer isnecessary for effective voice at the work place for two reasons. First,many important aspects of an industrial setting are public goods’, whichaffect the well being of every employee.
As a result the incentive for anysingle person to express his preferences, and invest time and money tochange conditions is reduced. Safety conditions, lighting, heating, thefirm’s policies on dismissal, work-sharing, promotion, its formal grievanceprocedure and pension plan – all obviously affect the entire work force inthe same way that defence, sanitation, and fire protection affect allcitizens of a town. Public goods’ at the work place require collectivedecision-making. Without a collective organisation, the incentive for theindividual to take into account the effects of his actions on others, orexpress his preferences, or invest time and money in changing conditions,A second reason collective action is necessary is that workers whoare not prepared to exit will be unlikely to reveal their true preferencesto their bosses, for fear of some sort of punishment.
The essence of theemployment relationship under capitalism is the exchange of money betweenemployer and employee in return for the employer’s control over a certainamount of the worker’s time. The employer seeks to use his employee’s timein a way that maximises the value of the output the employee produces. As aresult, the way in which the time purchased is utilised must be determinedby some interaction between workers and their boss. Since the employer candismiss a protester, individual protest is dangerous. In a unionised setting, by contrast, the union takes account of thepreferences of all workers to form an average preference that typicallydetermines its position at the bargaining table. Through collectivebargaining employees can achieve better terms because the employer cannottake advantage of the individual’s differing personal circumstances andneeds.
As Harbinson stated, the important difference between individual andcollective bargaining lies in the fact that the latter ‘is strictly arelationship between organisations’ and therefore an indirect regulation ofthe relationship between management and employee. There are three basic functions of collective bargaining:(a) A market or economic function – it determines on what termslabour will continue to be supplied to a company by its presentemployees or will be supplied in the future by newly hired workers. In this context the collective agreement may be regarded as aformal contract and the grievance procedure as a non-legal meansfor ensuring the employer’s compliance with its terms. The processis primarily concerned with determining the substantive terms onwhich people are being employed.
(b) A governmental function in which collective bargaining maybe regarded as principally a political process based on themutual dependency of the parties and the power of each to ‘veto’the acts of the other. The content of collective bargaining isconcerned as much with procedural issues and the distribution ofpower and authority as it is with substantive issues and the(c) A decision making function which allows workers, throughtheir union representatives, to participate in the determinationof the policies, which rule their working conditions. Thecollective agreement is in effect, a formal memorandum of thedecisions that have been reached and is a limitation onmanagement’s freedom and discretion to act unilaterally. Here is important to note the necessary conditions under which collective(a) the employees themselves are prepared to identify acommonality of purpose, organise and act in concert; and(b) management is prepared to recognise their organisationand accept a change in the employment relationship, whichconstrains its ability to deal with employees on an individualThe determinants of conflict between the management and the workersunion in an organisation are easy to see when we consider the objectives ofboth sides. Management’s objective in collective relations may fall intofour broad categories: first, the preservation and strengthening of thebusiness enterprise; second, the retention of effective control over theenterprise; third, the establishment of stable and businesslike’relationships with the bargaining agents; and fourth, promotion of certainThe union may threaten the survival and growth of the enterprise inseveral ways. It may press demands, which impair the financial health ofthe business, or it may undermine management’s efforts to build a loyalOn the other hand the of the union leadership fall into thefollowing categories: first, the preservation and strengthening of theunion as an institution; second, the carrying out of the formal purpose ofthe union to get more’ for the membership; third, the acquisition of agreater 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 theunion gives us a partial explanation of why labour-management relations inthe mass production industries often involve a struggle for power. Theunion’s quest for more’ appears to be in conflict with management’s desireto protect the financial well being of the firm. Management’s concern forretaining its prerogatives must often be in basic conflict with the union’sobjectives of acquiring control over jobs. The labour leader’s notion ofhuman welfare often conflicts with management’s picture of the economicfacts of life’. Management and union leaders are simply after differentthings 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 developedcollective bargaining system without legal support was partly a product ofa strong trade union movement. Trade unions are regarded as a form labourcartel which function is to redress the imbalance in the labour marketindirectly by restricting employee competition for work through control ofthe number of entrants and directly by regulating the price of labour. Someemployers and employers associations, from the early stage, were preparedto 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 asignificant number of employers were prepared to recognise trade unions anddeal with them on the basis of voluntary joint dispute procedures andThose employers and employers’ organisations who gave earlyrecognition to the trade union of skilled craftsmen, were careful toprevent the right to manage in the structure of collective bargaining.
Collective bargaining was not based on the work shop where managementdecisions about workings, the place of work or discipline and dismissalcould be brought into collective negotiation. The evolution of trade unionalong occupational lines was favourable to employers because it reinforcedthe structure of district bargaining and divided the work force in any firmor work place. The employers’ acceptance of the recommendations of theWhitely Committee of 1918 for the formal conciliation and negotiatingmachinery at industry-wide level which led to the development of industry-wide collective bargaining in the UK by the 1940s, occurred becauseemployers saw such structure in their interest. From the employer’sviewpoint voluntarism’ had the advantage of limiting the extent of legalregulation of busine ss activity and managerial decision making.
Despite its role as a central activity of the industrial relationssystem, collective bargaining is most noted for its lack of legalregulation. In the UK, unlike the USA and other countries, there is nolegal requirement on the employer either to recognise a trade union forcollective bargaining, nor have collective agreements been regarded ascontracts capable of legal enforcement between the signatory parties – theemployer and union. It is only through the express or implied incorporationof the collective agreement into the individual contract of employment thatthere is any legal basis for enforcing the terms of a collective agreement. This lack of external regulation has given rise to the notion of voluntaryFrom 1871 to 1971 the legal status of collective agreements wasunclear.
In 1968, the Donovan Commission reported a consensus of opinionagainst an assumption of intention for legal enforceability. The consensussuggested in the Ford case that collective agreements could be presumed notto be legally binding was first challenged in the Industrial Relations Act1971. This Act choose to give legal weight to the peace obligationcontained in collective agreements by creating a statutory presumption thatcollective agreements were legally binding unless the parties stipulatedotherwise. But there was an almost universal tendency for employers to joinwith trade unions to negate the statutory presumption by inserting into theagreement the phrase This is not a legally enforceable agreement’ – (the Tinalea’ section). When the Labour party was returned to power in 1974, s34 of the 1971 Act was replaced by s 18 of the Trade Union and LabourRelations Act 1974 which restored the presumption against legalenforce ability. In its present form, as s 179 of TULR(C)A 1992, it reads(1)Any collective agreement shall be conclusively presumednot to have been intended by the parties to be a legallycontract unless the agreement -(b) contains a provision which (however expressed) states thatthe parties intend that the agreement shall be a legally(2) Any collective agreement which does satisfy these conditionsin subsection (1)(a) and (b) above shall be conclusively presumedto have been intended by the parties to be a legally enforceableThere are four main advantages claimed for the legal enforcement of(a) collective agreements would have to become both morecomprehensive and more precise in defining the rights andobligations of each party if their meaning and intend is tobe capable of legal interpretation should the need arise;(b) it would put pressure on union officials, as representativesof one of the signatory parties, to use their best endeavoursto ensure that their members complied with the terms of theagreement – particularly the no strike’ clause.
This, it isanticipated, would reduce the incidence of unconstitutional(c) it would allow management to manage the organisation securein the knowledge that once an agreement had been concluded,its terms would be adhered to;(d) it would induce a long-term attitudinal change in industrialrelations, which could result in employees benefiting byincreased wages and greater job security. British employers today continue to be divided in their approach totrade unionism and collective bargaining. Trade union membership as apercentage of the work force is declining in response to changes in thecomposition of the work force. Employers are engaged in derecognitionpolicies in increasing numbers. Recent industrial relations surveysindicate that almost half of all employers who are prepared to reach anaccommodation with trade unions and engage in collective bargaining. Recognition is spread mainly by custom and practice, although increasinglycomprehensive management-union agreements are being drawn up.
These arevaluable in that they specify in detail who the employer would negotiatewith, where, and over what issues, and also questions such as trade unionfacilities on the employer’s premises, and the automatic deduction of unionsubscriptions from the employee’s pay packet. Employers prepared toreach an accommodation with trade unions vary in their approach. Oneminority g roup has been identified as constitutionalists’, such as Ford,who codify rules in the collective bargaining. A majority group consists ofmore informal consultors’, such as large oil companies, in which tradeunions are recognised and collective bargaining is well developed, but themanagement does not codify everything in a collective agreement. Anothergroup consists of firms, which insist on strike free agreements’ withsingle unions or single table bargaining’.
A third group of managers takemore pragmatic approach to trade unions and industrial relations alteringit as circumstances change and making little real attempt to achieveconsistency between different establishments of the firm. What all categories have in common is that they are firms in whichmanagement legitimises the union’s role in certain areas of joint decisionmaking because it sees this role as conductive to its own interests asmeasured by stability, promotion of consent, effective communication, etc. On the other hand, the firms, which oppose trade unions also,display differences in style. One group consists of forceful opposition’,in which directors and senior managers have virtually no contact with tradeunions and are determined to use all legal means to prevent trade unionmembership and activity among the work force. Another group consisting ofUS firms such as IBM, Hewlett Packard and Kodak, and British firms such asMarks and Spencer, adopts a more indirect form of opposition in the form ofsophisticated paternalism’. These companies firmly refuse to recognisetrade unions and take the position that they can best look after theiremployees’ interests but they take great care in recruitment, selection,training, counselling and remuneration to keep employees sufficiently happyRecognition remains the threshold for various new statutory rightsincluding information relevant to collective bargaining, consultation overredundancies and time off for trade union activities.
There are many levels of collective bargaining. The agreements maybe at a national level between either one union or confederation of unionson the workers’ side, and a single employer or an employers’ associationThe purpose of industry-level bargaining has two viewpoints:(a) From the trade union point of view it ensures that a commonrule is applied across as wide area as possible. In the wagessphere it reinforces the concept of a rate for the job’ basedon the inherent nature of the job rather than the financialor productivity position of a particular organisation. (b) From the management point of view it allows organisationsto present a collective response to trade union pressure; itstabilises the wage costs for all organisations at a uniformlevel and prevents unfair’ competition between organisationsbased on differing wage levels. However, the wage rate set atthe national level in many private manufacturing industriestends to be that which can be afforded by the least productiveand profitable within the industry.
The increased emphasis on organisational bargaining in the private sectorfrom the 1960s onwards is a result mainly because of the inability, andinappropriateness of formal industry agreements to regulate the increasingrange of issues which were becoming subject to collective bargaining, suchas changes in working methods and improvements in productivity, which aredifficult to be regulated effectively from the national level, given thediversity of organisational requirements. Organisational bargaining covers a variety of different levels and(a) Company – or group-level bargaining where all employeesof a given type within the organisation, irrespective oftheir place of work, are covered by a single bargaining(b) Plant or site bargaining in multi-site organisations. Thislevel of bargaining is particularly important in thoseorganisations, which are multi-industry as well as multi-siteand therefore the nature of the work, and process involvedwill vary between the sites and require different terms and(c) Departmental or workshop bargaining relating to such issuesas bonus schemes and work arrangements. It is important to say that organisational bargaining is not confined toone or other level but may take place at a combination of levels. Inaddition to any industry-level bargaining, there may be bargaining at thecompany-level (pensions), the site-level (enhancement of nationally agreedterms) and the departmental level (the employees’ actual workingOrganisational bargaining has two important advantages:(a) It encourages management to develop a more positive approachto industrial relations within its organisation – particularlyin respect of wage bargaining.
Industry-level bargaining tendsto weaken management’s control of its wage costs in that thedetermination of wage rates is outside its direct control andmay be inappropriate to its circumstances. Management, bybargaining at the organisational level, is better able to linkwages with changes in work methods and increased productivity. (b) Both management and employee representatives becomeresponsible for, and committed to, the agreement they reach. The terms of the collective agreements are no longer decidedfor them by people outside the organisation and over whomthey have little direct control. However, organisational-level bargaining may also present some problems:(a) In the area of pay bargaining, it may provide greater scopefor comparability’ inflation. The granting of a pay increasein one organisation, because of changes in work methods caneasily give rise to expectations that similar increaseswill be given in the future or in other organisations.
Itprovides the opportunity for the development of a keybargaining’ strategy on the part of trade unions; that is,selecting one organisation which can afford the pay increaseand than trying to achieve the same level of pay in other(b) The existence of too many small bargaining units, each withits own separate agreement, can lead to constant comparabilityclaims between the various groups. (c) Because of the multiplicity of negotiations and agreements,organisational bargaining is less susceptible than industrybargaining to external verification and regulation duringSo far as industry bargaining is concerned it is important todistinguish between three potential roles for industry-level bargaining:(a) It may determine actual rates to be paid – as in the(b) It may act as a floor. Elliot explains this situation asfollows: when national rates rise all workers who currentlyenjoy rates in excess of the nationally agreed rate havetheir rates adjusted upwards either to re-establish somefixed relationship with the nationally agreed rate or becausethe change in the national rate provides the agreed signal fora change in workplace rates. (c) It may act as a safety net.
Elliot states that in thissituation the industry level provides only some agreed minimumbelow which nobody will be allowed to fall’ and therefore anyincrease in the national rate will only affect those who weremarginally above the old national rate but are now below theLegal support for trade union recognition was introduced quite latein Britain. Even as late as the 1960s the TUC could argue that tradeunions in Britain have succeeded through their own efforts in strengtheningtheir organisation and in obtaining recognition, not relying on theassistance of government through legislation’. However, by that time,changes in the labour market away from manual to non-manual employment andthe decrease in employment in industries with high trade union densitiesindicated that the historical base for trade unionism in the private sectorThe repeal of the statutory recognition procedure in 1972 did notdramatically affect the statutory trade union rights to disclosure ofinformation, consultations over redundancies, transfers of the undertaking,health and safety pensions as well as the right to time off for trade unionduties and the right to appoint safety representatives. For while all theserights presuppose that a trade union has been recognised by the employerfor the purposes of collective bargaining, it is not necessary for therecognition to have been granted under the s. 11 procedure.
The Employment Protection Act 1975 also included a statutory tradeunion right to disclosure of information for the purposes of collectivebargaining, which has been retained. Contained now in s 181 of TULR(C)A,this trade union right requires employers to disclose information inconnection with collective bargaining. One reason for this legislation is that it is not simply anadvantage for trade unions in the bargaining process. It is also useful toprompt employers to present information in such a way as to produce morerealistic demands by trade unions by convincing them to take into greateraccount the economic problems of the firm.
Employers do not have to provideoriginal documents, or even copies of original documents, but are entitledto prepare information in a special form to be disclosed to trade unions. A recognised, independent trade union is entitled to allinformation relating to the employer’s undertaking as is in his possession,which applies to any stage of collective bargaining. Another statutory right of trade unions is the right for collectiveconsultation over redundancies. Employers are required to consult withrecognised trade unions to notify the government in advance of redundancies.
Under s 188 of TULR(A) an employer who proposes to make one or moreemployees redundant has an obligation to inform and consult about such adecision with a trade union which has been recognised for collectivebargaining for that grade of employee. In addition to the obligation to consult recognised trade unions,employers are required to notify the DE when they propose to dismiss ten ormore employees for redundancy (s 193). The idea behind this provision is toput the DE in a position to help to place redundant employees in new jobsor in government retraining courses. Section 168(1) of TULR(C)A entitles employees who are officials ofan independent recognised trade union to have reasonable time off with payto carry out any duties, as such an official, which are concerned witheither negotiations with the employer related to collective bargainingmatters for which the trade union has been recognised (s 168(1)(a)) or theperformance of trade union functions agreed with the employer (s 168(1)(b))and to receive training in issues of industrial relations relevant to hisduties concerned with the collective bargaining matters in s 168(1). TheCode of Practice clearly indicates that the purpose of the section is toextend the rights of trade union representatives at work place level withina framework agreed between management and the union. It promotes the ideathat managers should give shop stewards facilities including office spaceand that employers should allow paid time off for a wide range of tradeIn conclusion we may say that legislation still prones obstacles inthe way of trade union renovation in new areas and increasing trade unionmembership.
More precisely, the narrowing of trade union immunities hascreated difficulties for trade unions to use secondary industrial pressure. Moreover, it encourages employer policies of derecognition andWhile the scale of collective bargaining in the 1990s is underthreat owing to the changing attitudes of employers who take inconsideration the centrality and significance of collective bargainingarrangements with their organisation, it is still the case that more than60% of the work force are covered by collective arrangements. Bibliography:
