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What is Collective Bargaining? 

The history collective bargaining culminates from trade Union activities in the early stages of the emergency of capitalist. “Great Britain was the starting point of the labour union movement in Western Europe” The trade union role was to primarily protect workers from being exploited by capitalists. whilst promoting social security and civil rights. The trade Union popularity spread to the near-by European countries, a case with Germany whose labour movement which had close links with the emergency of social democracy. The Germany labour movement forged ties politically, by securing long terms contacts with politicians, consequently acting as a bridge between the citizens and the government. In the US and the UK, there the absence of an independent employee representative organisation, there by decentralising the processes of collective bargaining.  Ideologically, in the US, the trade Union movement is viewed as an interest group rather an institution to promote democracy (Heins, 2004)


Collective bargaining has been defined as “a process of decision-making between parties representing employer and employee interests” (Adams, 2000).

In  the networked nature of the global economy, the impact on the bargaining power of employees within a nation is limited. This is because the nature of a networked organisation is costly for workers to attain improved benefits and working conditions as they now must pay a higher share of such costs themselves. The implication of this development is that the nation-state becomes less useful as a unit of analysis for international trade and research will have to move to the level of the firm, and its global pattern of production, innovation and work organization (Milberg and Houston, 1997). In addition, employers may purposely structure their organisation to separate joint workplace governance from collective bargaining. This choice by employers is to solicit more cooperative behaviour from employees, rather than engaging in workplace negotiations. Should the trade unions’ role fade in organisational governance, a new form of governance may emerge. A case is with the U.S where most organisations are run by “ a shared capitalist” form,  and where employers and employees share financial risk, including rewards and decision-making authority (Regini, 2002).


The government could also choose to regulate collective bargaining, given its environment. One should be care careful in drawing up causal relationships between neoliberal best practices of the  global political economy and choice taken by governments to regulate or limit collective bargaining. For example, in German,  the extension of collective bargaining systems to the East, created changes in the collective bargaining policies. However, it would be difficult to establish to the extent to which such changes may have been caused by globalisation or other factors (Wergin, 2003).


Choices in the nature of collective bargaining have consequences on the economic performance (with indicators such as more wage restraint, lower unemployment and inflation). For example,  in highly centralized bargaining arrangements, unions internalize the negative effects of large wage increases and show wage restraint. In highly decentralized systems, unions are simply too weak to achieve gains that might raise unemployment or lower international competitiveness (Wergin, 2003)

The use of teams in organisations undermine the concept of  “ organic worker led teams”,  which is derived from trade unionism. Team leaders are fellow employee rather than supervisors in the world class manufacturing practice, a case with lean. Although such world class practices interfere with Union organisations, they offer opportunities to labour. Teamwork based on lean is dependant on the accumulated knowledge of workers  coupled with their subjective abilities, which may directly or indirectly enhance union workplace strategies. In addition, the success of flexible inter-firm relations and new forms of work organization is best achieved through union involvement, especially through negotiated involvements. Issues that have an impact on the workers’ wages such as those related to productivity, and performance would cover the basis of bargaining on a plant level.  A negotiated involvement on such matters is aimed at achieving greater internal flexibility. Further a negotiated involvement would cover a whole range of workplace matters, such as reorganization of work, flexible working hours, and pay for performance and skills.  Developing trust relations is crucial for such involvements (Rutherford, &  and Gertler, 2002; Bruun, 2002).


Other choices that exist in other countries or continents  are outlined as below;


In corporatist systems, economic performance is typically related positively with the degree of centralization of the wage bargain, higher union density and more participatory work environments, and macroeconomic and policy environment of more job security. Non-corporatist systems are often understood to be characterized by a negative relation between economic performance and such indicators as labour union strength and government spending on social protection (Wergin, 2003). Neo-liberalists would ague that collective bargaining tends to create rigidities in the market economies. However Ram  (2010) argues that if managed well, Collective bargaining structures can be responsive and adaptable to the changing circumstances, Collective agreements concluded may contain clause that allow for flexibility given changes in the  employment climate or size of enterprise. For example adjusted flexible forms of employment have been concluded in Japan and Korea, a case with temporary and fixed-term employment.

A neoliberal approach to labour relations in the industrialized world is evident with ;

the use of more part-time workers in France, cuts in health benefits in Germany, the          reduction in Canadian unemployment benefits to U.S. levels, the decentralization of wage           bargaining in Italy, Spain and Sweden, and the tightening of limits for unemployment benefits      in the U.K. and the Netherlands. The dismantling of the welfare state, which began in the U.S.           and U.K. for political reasons in the early 1980s, continued in continental Europe in the 1980s         with calls for greater labor market flexibility. Governments in the U.K.,Sweden, the        Netherlands and Germany all tightened their eligibility criteria for unemployment benefits”        (Milberg and Houston, 1997)

Whereas some countries (especially Anglo-Saxon countries) have moved towards a single employer bargaining or even individual contracting, others have adapted the multi-employer bargaining at both a central level and industry level, alongside a decentralised kind of bargaining (Taxler, 2003; Traxler 1998 in Wergin, 2003).

As climate changes occur, so do the employee. This is where employees who were previously employed in manufacturing have moved to the service and white collar jobs of the economy (Ram, 2010). Union density in developed has had a positive correlation with employment levels. At the time when unemployment levels were low in the post-mid -1980s, trade union membership also declined.  Exception in increased trade union membership after the 1980s was in developing nations experiencing major democratic reforms (Bruun, 2002)

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