Now this may cost the business more, but it will benefit from greater levels of productivity in the long run. If workers are better trained, they are equally going to be more productive. So the business and the unions workers may gain as a result. We can also look at integrative bargaining where both sides lose in order to gain. For example, the unions may be willing to give up yearly bonuses in order to have a higher annual salary.
Or, alternatively, the union would accept a pay freeze in order to accept better working conditions. So the workers would lose out from lower real wages, whilst the employer would have to invest in better conditions. Productivity bargaining involves both parties negotiating around productivity and pay. So unions may suggest that higher salaries would boost productivity. However, this is unknown to the business. So target-orientated bonuses may be suggested, or new ways of improving the process.
Unions may suggest new ways of organising the worker force than may increase productivity and therefore create value to the firm. In turn, employers would look to increase employees wages as a result. Simply put, productivity bargaining is where the two parties look to agree to changes that would boost productivity in return for higher wages or other benefits. Composite bargaining refers to a negotiation that focuses on a number of elements that are not related to pay.
They are generally related to employee welfare and job security. For instance, it covers factors such as working conditions, policies, recruitment, and disciplinary processes. The aim is to ensure a mutually beneficial long-term relationship between the employer and employee.
It does this by highlighting issues that employees may have, which may impact their long-term future at the company. Businesses want to retain talent, particularly if they spend time and money training them up. Factors such as workload and working conditions can impact on this long-term relationship. So it is in the best interest of both parties to ensure that the employees are happy.
Concessionary bargaining is based on unions giving back previous benefits to the employer. For instance, trade unions may agree to lower wages in return for job security. This may come during an economic decline whereby job security is more important to the unions than higher wages. The main aim of concessionary bargaining is to strengthen the business in order to ensure its survival alongside its employees. The NFLPA was the first recognised players union and in they went on strike over pay and pensions.
After eleven days of strikes, an agreement was reached which increased salaries of rookie and veterans, whilst also guaranteeing them a pension. Coordination based on trendsetting is of a more recent vintage in Scandinavia. In each of these countries the changes started in the s, but it took till the early Denmark , mid Norway or late s Sweden before a stable wage leadership was established Scheuer ; Elvander ; Vartiainen ; Kjellberg This might be the case if the internationally exposed sector takes the lead.
The stability of pattern setting, including wage moderation if need be, depends on a degree of centralisation and authority that is perhaps less than central wage bargaining but still formidable. In Germany it is the sheer might of the IG Metall in combination with the size, success and prestige of the car industry.
In Norway and Denmark it is possible to end disputes over the renewal of agreements by means of a single mediation procedure for the entire private sector, empowering the mediator to treat several settlements as one entity in the ballot Elvander This is a strong centralising element in an otherwise decentralised system of wage setting like the Danish one and a method to gag independent unions and out-of-step employers, for instance in the Norwegian oil industry.
Mediation institutions were set up in all four Nordic countries in the early 20th century Elvander , but these institutions have been weaker in Sweden, where a strong doctrine of freedom from state interference in these matters had prevailed Elvander This was addressed in the Industry Agreement between the industrial engineering employers and a cartel of ten unions. The agreement established a private-law mediation institute, a permanent joint structure with impartial chairpersons for negotiations and a sectoral Economic Council with four independent academic economists.
Elvander and Holmlund judge these institutions as prerequisite for decentralized wage formation in a highly organized economy with powerful unions. This came after a challenge during the recession, when some unions pushed hard for the norm to be set by the commercial services sector rather than by a manufacturing sector which was experiencing tremendous difficulties in exports and sales, and was rapidly losing jobs Kjellberg In the bargaining rounds, following some recovery, the industry sector prevailed however, though with the salaried employees rather than the blue-collar unions, settling first and thus establish the pattern.
France is the most prominent case of state-guided coordination Crouch ; Culpepper Setting its level became highly politicized, playing big in presidential elections. State guidance through setting the minimum wage or awards is primordial in France, Australia, the Czech Republic, Bulgaria, Turkey, Israel and, since , in Greece and Portugal. During the recession government control over minimum wage setting has increased through the removal of the social partners from decision making over minimum wage levels Greece, Hungary, Spain, Latvia , or by freezing Ireland, Portugal, Latvia, Lithuania, Czech Republic , partially de-indexing Belgium, Luxembourg or lowering Greece the statutory minimum wage.
Minimum wage setting by the government may have a big knock-on effect on private sector wage bargaining, especially where there is a large low wage sector and where wage bargaining institutions are weak or have weakened, as indicated by low and declining coverage rates, arrears in the renewal of agreements, and arrears in pay.
It is at very low levels of unionization and bargaining coverage that wage bargaining is allowed to go un-coordinated. Collective bargaining and many of its underpinning laws and institutions are the product of major crises, not least the Great Depression of the s, which became the inspiration for multi-employer bargaining and the rules that for half a century and longer ensured wide-ranging coverage of wage agreements.
In the United States these were the founding years of industrial unions organizing across firms in mass production industries. In post-war Western Europe multi-employer bargaining at national and sectoral levels became the cornerstone not only of wage setting but also of labour market regulation more generally. After the labour laws in post-communist Europe made explicitly room for multi-employer bargaining. Although collective bargaining changed in many ways both in content and structure, the multi-employer nature of bargaining remained remarkably stable, at least in continental Western Europe and until the Great Recession.
This is the exact opposite of the lessons and policies with which the industrialised democracies had tried to defeat the economic and political misery and upheavals of the s and s.
Undoubtedly, labour markets changed in these eighty years - more technology, education, women, and probably also more rights and democracy in the workplace, as well as fiercer international competition on a global scale and intensely restless financial movements and interests - but one wonders how strong the evidence against multi-employer bargaining is that the destruction of its supporting institutions is currently taken for granted by so many governments.
In the s the United Kingdom had been the first and only European country with a government determined to end the prevailing system of multi-employer bargaining. These are the policies advocated, with more coercion, by the international institutions IMF, EU, ECB as part of their financial assistance programs during the current recession and souvereign debt crisis.
Apparently, it needs a severe crisis and much international pressure to disembed wage bargaining institutions. As we have seen in the pages before, the Great Recession and its Aftermath intensified rather than changed developments in wage bargaining institutions, like decreasing bargaining coverage, lower unionization levels, and decentralisation of wage bargaining.
This shrinkage of collective representation and bargaining is the expression of, and a contribution to, the observed rise in inequalities in the labour market and in society Jaumotte and Buitron In one aspect - state intervention and the conspicuous absence of social pacts - the Great Recession appears to present a political break with developments since the s, however.
Whereas before the crisis there were signs of less direct state intervention both inside and outside Europe, during the Recession governments in Europe have become more involved in wage-setting. Again, this is especially true for EU Member States receiving external financial support, such as Romania, Greece, Portugal and Spain, where government interventions have reduced the scope for collective bargaining and pushed disorganised decentralisation.
In Italy, under pressure of the European Central Bank, the government tried to force change upon employers and unions, and in Belgium and Luxembourg, over the issue of indexation, governments were under pressure of the European Commission, though in Belgium and Italy the unions were less easily pushed aside.
Considering cases as different as Slovenia, Poland, South Korea and Chile, Fraile and Baccaro find support for the hypothesis that these pacts, while not changing the neo-liberal direction of change moderated its pace, provided compensation for those groups and interests that were losing due to changes and thus made reform more politically sustainable.
During the Great Recession wage setting reform pacts are conspicuous by their absence and international pressure appears to have substituted for the search for domestic consensus. This conclusion is supported by the finding that in the countries hit hardest during the recession and with the largest number of regulatory changes, wage bargaining coordination has more or less disappeared Fig.
I want to thank Tony Atkinson, Georg Fisher, Juan Jimeno, Olivier Blanchard, Prakash Loungani, and the anonymous reviewer of this journal, for their inspiring comments, questions and suggestions.
The construction of the variables in this paper adjusted coverage, extension regimes, dominant level of bargaining, articulation, additional enterprise bargaining, opening clauses, decentralisation, and coordination is explained in the ICTWSS codebook and available with the dataset.
The observed coverage rate includes employees directly covered through their membership of a union or employment in a firm directly bound by collective agreement as well as employees who are bound due to the extension of the agreement to non-organized firms. The separate effect of extension orders are discussed below. Union density and bargaining coverage rate are calculated in the same way, as the proportion of employees who have taken up membership of a union and employees whose terms of employment are covered by a collective agreement.
Besides a few countries were the data are derived from household or labour market surveys, the data are from administrative records. This tends to produce an inflated bargaining coverage rate when agreements have no expiration date, have not been renewed on a regular basis and are treated as valid even when expired. For and explication and example, see the note on Portugal Additional file 1. From to the average length of union recognition elections increased from 54 days to days, with ever fewer cases won by the unions Peters The hostilities produced during these elections was such that it became less and less like that there will be a collective agreement.
Ministerio de Empleo y Seguridad Social. Usually, derogation do not go below the sectoral minimum on pay. Addison JT Incomes policy: the recent european experience. Google Scholar. Ind Relat 53 1 — Article Google Scholar.
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Palgrave-McMillan, London. Chapter Google Scholar. SDU, The Hague. ILO, Geneva, report no. A historical sociological analysis of the Danish system of collective bargaining. EC Industrial Relations in Europe Indust Bezieh — The role of works councils and opening clauses. Elvander N Incomes policies in the Nordic countries. Int Labour Rev — Elvander N The New Swedish Regime for collective bargaining and conflict resolution: a comparative perspective.
Eur J Ind Rel — Elvander N Two labour market regimes in Sweden. Elvander N, Holmlund B The Swedish bargaining system in the melting Pot: institutions, norms and outcomes in the s. Arbetslivsinstitutet, Solna. Erne R European unions after the crisis. A cross-national comparison. North-Holland, Amsterdam, pp 31— Flanagan RJ Macroeconomic performance and collective bargaining: an international perspective.
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Katz HC The decentralization of collective bargaining: a literature review and comparative analysis. Ind Labor Relat Rev — Kenworthy L Wage-setting institutions: a survey and assessment. World Politics — Keune M Decentralizing wage setting in times of crisis? The regulation and use of wage-related derogation clauses in seven European countries. Eur Labour Law J — Evidence from a firm survey. ECB: working paper series, no. A Strategic Choice Perspective.
Transformation and Integration. A comparison of eight new EU member states. ETUI, Brussels. Comp Labor Law Policy J — Kristal T, Cohen Y Decentralization of collective agreements and rising wage inequality in Israel. Ind Relat 46 3 — Palgrave, London, pp 50— Mach A, Oesch D Collective bargaining between decentralization and stability: a sectoral model explaining the Swiss experience during the s.
Mundlak G Fading Corporatism. J Econ Perspect — Organisation for Economic Co-operation and Development, Paris. The Teamsters have a long-established multi-employer bargaining relationship with the Cannery Council, an association of food processors with operations in central California, including Del Monte and Heinz. For example, the Machinists Union has negotiated with both a government contractor and subcontractor at the table and won agreements that cover employees of both employers.
Unions have also been able to win better working terms and conditions for workers through campaigns for local city ordinances. The union then won recognition as the representative of 1, Prospect Airport Services and PrimeFlight Aviation Services employees who work as baggage handlers, wheelchair attendants, cabin cleaners, and more.
The union was able to build on the minimum standards established by the ordinance and, in their first collective bargaining agreement, win provisions that exceed the requirements of the paid sick day ordinance.
Unless they work for an agency, domestic employees such as nannies, house cleaners, and gardeners are not covered by the NLRA, and their employment is dispersed throughout millions of individual households.
Recently, worker advocates in Seattle won passage of a city ordinance that sets a minimum wage, meal breaks, and days off for domestic workers and establishes a Domestic Workers Standards Board, through which employers, domestic workers, and worker organizations meet to discuss other recommendations and standards for domestic workers.
As the examples listed above have demonstrated, when unionized workers have significant density within an industry, occupation, sector, or employer, they can overcome the obstacles to broader-than-single-worksite bargaining and win significant gains at the bargaining table with their employers—gains that not only benefit workers directly covered by the collective bargaining agreement, but also raise wages and set standards for nonunion workers in the area.
The Protecting the Right to Organize PRO Act removes obstacles to workers organizing, curtails employer interference in worker organizing, and establishes meaningful penalties when employers break the law.
It establishes a process for newly formed unions and employers to successfully negotiate a first agreement. The NLRA should be amended to allow workers to designate a multi-employer bargaining unit, or to tie several bargaining units together in multi-employer bargaining, with one or more unions. This bargaining could be either horizontal within an industry or vertical to capture the supply chain.
The voluntary nature of multi-employer bargaining allows employers to pit workers and unions in one location against one another. The law should be changed to give workers and unions the ability to request multi-employer bargaining, with direction given to the NLRB to approve the request unless there are compelling reasons why the approach should not be followed. The NLRA could be amended to add provisions for extending the terms of a collective bargaining agreement to cover a group of workers newly organized by a union that has density in the industry.
Certified unions would then file for individual elections at each worksite, and the collective bargaining agreement negotiated in the sector would automatically be extended to new facilities organized in the sector. Proposals have been advanced for a sectoral bargaining system in the United States, to assure the broadest possible collective bargaining coverage. Policy reforms should be undertaken to facilitate this outcome. The authors gratefully acknowledge the assistance of the following individuals who provided the examples and information outlined in this report:.
Josh Bivens et al. Data are for See Josh Bivens et al. The report describes examples of unions setting standards for an industry or geographic area. The wage estimates are in dollars and look at what wages would have been in had union density the share of workers in similar industries and regions who are union members remained at its levels.
Celine McNicholas et al. Pacific Metals Co. For a discussion of the ways employers legally and illegally work to defeat union organizing and union contract negotiation efforts, see Celine McNicholas et al.
The agreement is binding on all facilities where the union represents workers. Workers can also seek to bargain nationally on a multi-employer basis, but participation by employers is voluntary.
A pattern agreement is a lead agreement with an employer that establishes wages, benefits, and other terms and conditions of employment that the union then takes to other employer s of workers who are represented by the union in order to attempt to persuade the other employer s to follow the pattern. There is no legal obligation on an employer to agree to a pattern agreement, only to bargain in good faith. A master contract is an agreement negotiated between a union and an employer or a group of employers setting wages, benefits, and other terms and conditions of employment for all workers covered by the agreement—workers who may work at many facilities for many different employers for example, construction workers.
Collective bargaining improves the labour relations climate by providing an institutionalised and agreed way of managing conflict. Collective agreements may include peace clauses during the duration of a collective agreement and set out grievance procedures for addressing grievances. This can provide for more stable and sound labour relations. Collective bargaining gives legitimacy to the rules regulating labour relations. Where the terms and conditions of work and of employment have been negotiated, they are more likely to be complied with.
Collective bargaining allows the parties to tailor a collective agreement governing the employment relationship to their particular industry or enterprise. It also allows parties to solve problems that may be specific to their industry or workplace.
Parties are known to negotiate agreements that may facilitate adaptability of the enterprise during a downturn or the introduction of technological and organizational change in a manner that protects workers against risk and delivers the results desired. Question: How does a company give effective recognition to the right to collective bargaining?
Answer: The right of workers to form or join organisations in order to bargain collectively cannot be realised if the employer refuses to recognise the trade union or to engage in collective bargaining.
It is also helpful to provide facilities as may be necessary to assist in the development of collective agreements. Collective bargaining can function effectively only if it is conducted in good faith by both parties.
Answer : Companies can take action at various levels: In the workplace: Provide worker representatives with appropriate facilities to assist in the development of effective collective agreement.
Recognize representative organizations for the purpose of collective bargaining. The right of workers to form or join organisations in order to bargain collectively cannot be realised if the employer refuses to recognise the trade union or to engage in collective bargaining.
Provide information needed for meaningful bargaining. At the bargaining table: Provide trade union representatives with access to real decision makers for collective bargaining. Bargain in good faith. Collective bargaining can only function effectively if it is conducted in good faith by both parties.
Address any problem-solving or other needs of interest to workers and management, including restructuring and training, redundancy procedures, safety and health issues, grievance and dispute settlement procedures, and disciplinary rules.
In the community of operation: Take steps to improve the climate in labour-management relations, especially in those countries without an adequate institutional and legal framework for recognizing trade unions and for collective bargaining. Mature system of industrial relations Question: What are the consequences and impact of respecting freedom of association and the right to collective bargaining?
Industrial relations and productivity: Respecting freedom of association and the right to collective bargaining is important for good industrial relations, and the efficient production of goods and services depends to an extent on the existence of harmonious industrial relations.
Risk management: Predictability is essential to stable and productive business operations. In the case of multinational enterprises that have extensive supply chains, a violation at just one of its business partners can damage brand image and have strong repercussions on profit and stock value. Shareholder concerns: These days an increasing number of investors take into account social criteria when deciding in which business to invest.
These criteria usually include the fundamental principles and rights at work, including freedom of association and the right to collective bargaining.
Each of these areas is further developed below. The importance of recognizing freedom of association and the right to organize Workers employed in enterprises should, without distinction, have the right to establish and join organizations of their own choosing without interference by either the employer or management, nor by any government authorities. The promotion of collective bargaining Consistent with national law and practice, measures should be taken to allow for voluntary negotiation between the representatives of the enterprise and representatives of workers for the regulation of wages and the terms and conditions of employment through collective agreements.
Consultation and communication A mechanism should be agreed between employers and workers and their representatives that provides for regular consultation on matters of mutual concern.
Concerning the content of communication, management should make available information regarding: [15] a general conditions of employment, including engagement, transfer and termination of employment; b job descriptions and the place of particular jobs within the structure of the undertaking; c possibilities of training and prospects of advancement within the undertaking; d general working conditions; e occupational safety and health regulations and instructions for the prevention of accidents and occupational diseases; f procedures for the examination of grievances as well as the rules and practices governing their operation and the conditions for having recourse to them; g personnel welfare services medical care, health, canteens, housing, leisure, savings and banking facilities, etc.
Procedures to examine and resolve grievances. A worker should be able to raise a grievance without suffering any prejudice. Procedures to settle industrial disputes Enterprises should join with representatives of organisations of workers to establish voluntary conciliation and arbitration procedures to assist in the prevention and settlement of industrial disputes between employers and workers.
Scope of collective bargaining Question: Do the International Labour Standards provide guidance on whether wages should be the subject of negotiations? Moreover, restrictions on the right to strike may be applied as far as the following categories of workers are concerned and in the following situations: In case of acute national crisis; For members of the armed and the police forces; For the public servants exercising their authority on behalf of the State; For workers that are employed in the essential public utilities, such as those whose interruption might endanger the life, security and safety of the whole population or part of it.
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