Employer and Employee Relations

Unit 2.7

Negotiations and Collective Bargaining

• A Negotiation is the bargaining process thru which two or more parties attempt to achieve an agreeable outcome. – Individuals who do not wish to directly negotiate may

use ‘agents;’ Collective Bargaining is the process of negotiation between management’s representative and trade union representatives. • Collective Bargaining involves a certain level of compromise,

other wise there would be a stand-off (also known as deadlock.)

• Employees are usually represented by a trade union (also known as a labour union.)

The Three Levels of Negotiation

1 . The day to day negotiations concerning the internal affairs of a business, such as management and their subordinates establishing new production and sales targets, are called Management Negotiations.

2. Negotiations between different organizations are Commercial Negotiations.

3. An extension of commercial negotiations which involve consideration of cross-border cultural and language difference are referred to as International Negotiations.

The Six Stages of NegotiationPart 1

The Six Stages of NegotiationPart 2

The Approaches to the Negotiation Process

1. Avoidance: Advocates suggest that the best way to resolve a dispute is to avoid it in the first place; associated with a lose-lose situation because underlying issues are not dealt with.

2. Level Playing Field: Both parties are seen as equal; there will be no negotiations if the parties are not equal.

3. Winner Takes All: The traditional view that one person’s gain is anther person’s loss; win-lose situation

4. Win-win: The idea that everyone could win from the negotiation process and that it’d yield more successful outcomes than “winner takes all.”

Trade Unions• The primary goal of any labour union is to protect the

interests of its members, done mainly through bargaining on behalf of their members for improved pay and working conditions and/or persuading governments to pass legislation in favor of employees.

• The outcome of the negotiation relies on the bargaining strength of the representatives as a result of:– Their experience and skills as negotiators– Number of members and degree of unity of the union– The state of economy– Demand for labour deriving from the demand for the product or

service the labour will be used to supply.

Main Types of Trade Unions

1. Craft: The original Unions with members sharing a particular skill or craft, such as engineers or printers.

2. Industrial: Accept members from the same industry, irrespective of their skills, qualifications, ranking, or the nature of their work.

3. General: Accept member from any industry, regardless of their skills or qualifications, and tend to have very large numbers of members

4. White-Collar: admit clerical, administrative and professional staff and exist for such professions like teaching and banking.

Achieving Individual and Group Objectives

• Worker demands can range from:– Better working conditions– Training and development opportunities– Improved remuneration (benefits)– Increased Pay

• Most often a result of increased cost of living, comparison to other workers in the same field, or the productivity of labour has been raised.

• Trade unions have steadily declined because fewer people are joining unions, due to:– Automation and mechanization– Range of government and legislative rules weaken union powers

• Hence, many organization have developed Staff Associations, which has similar roles to a trade union except that it operates only within the organization; issues dealt with are now, as a result, more relevant to the workers in specific.

Methods to Achieve Objectives• Negotiation: The workforce unites in its cause, strengthening the ability to

reason with management while also pressuring them to listen• Go-Slows: Employees work the minimum pace allowable under their

employment contract; reduces productivity of the workforce yet employers will find it difficult to discipline the staff who are contractually well-behaved.

• Work-to-Rule: Employees do the absolute minimum required according to the rules set by the employer and workers will not do anymore than is absolutely needed to.

• Overtime bans: Employees’ representatives disallow any of the unions members to engage in any overtime activity; this causes disruptions similar to those of go-slows.

• Strike Action: The refusal of employees to work, commonly a result of a major industrial unrest such as pay disputes or serious grievances.

• Walk-Out: Often in conjunction with strike action, workers collectively leave a meeting place of work as a sign of protest; usually spontaneous.

Achieving Employer Objectives

• Employer Objectives include:– Lower costs of production to remain competitive– Improved levels of productivity– Lower rates of absenteeism and staff turnover

– Staff Turnover means that a pay rise may be needed to recruit and retain the best workers for the business

• An organization that represents the general views and interests of all businesses within a certain industry is referred to as an Employers’ Association.

Employers’ Associations• These associations are likely to consist of highly skilled negotiators who

will use any combination of the following tactics:– Negotiation: Do not require the involvement of a third party; often use

deadlines as a tactic which give the opposition little time to prepare or fight for their case.

– Public Relations: The function of the business that deals with comments, complaints and criticism from the general public.

– Threats of Redundancies: Intimidation used to pressure or threaten employees intended to jolt workers into complying with their demands.

– Changes of Contract: Finite contracts are susceptible to change possible terms and conditions when offering the next contract which gives flexibility in the pay structure.

– Closure: Management closes the business where either the workers receive no wages, or, worst case scenario, the workers are made redundant; intended to persuade a renegotiation or settlement.

– Lock-Outs: The employer stops employees from working after only certain union members decide to strike whilst other employees continue to work; puts pressure on trade union by winning the support of those who are working

Conflict• The main causes for conflict are:

1. Needs and Wants2. Perceptions3. Values4. Power5. Feelings and EmotionsWhich could:

• Hinder productivity since there is less focus• Reduce the level of staff morale• Cause inappropriate conduct• Fuel the internal politics of an organization (incompatible

differences in the workplace)• Hamper opportunities for collaborative team-working

Outcomes of Conflict

• High concern for personal outcome leads people to compete for a win only outcome.

• High concern for others only means surrendering, which leads to a win for the other party.

• Low to no concern for either party’s outcomes simply means there is an avoidance of the conflict.

• High concern for the outcome of both parties leads to collaboration to a find a mutually beneficial solution. Moderate concern for the outcome by both parties leads to some sort of compromise being made.

Conflict Resolution• There are several ways to approach Conflict Resolution, the course of

action taken to resolve conflicts and differences in opinion, including:– Conciliation (also Mediation): the parties involved in a dispute agree to use

the services of an independent mediator.– Arbitration: the external party is used as a form of conflict resolution,

however, the process involves the independent arbitrator deciding on an appropriate outcome.• Pendulum Arbitration requires the arbitrator to decide completely in favor of one party

or the other with no compromise or negotiation.– Employee participation, within Industrial Democracy, where employees are

given responsibilities and authority to complete tasks and involved in the decision-making process.

– No-Strike Agreements & Single Union Agreements– Consultation– Litigation– Expectations– Avoidance

Review Questions & AnswersPart 1

1. Distinguish between ‘negotiations’ and ‘collective bargaining.’2. What are the three levels of negotiation?3. Outline six steps used in the negotiation process.4. Distinguish between ‘winner takes all’ and ‘win-win’ approaches to

negotiation. 5. The outcome of any negotiation or collective bargaining process will

depend on several factors. State five of them. 6. What is a ‘trade (labour) union’ and what is its main purpose?7. Distinguish between ‘go-slow’ and ‘work-to-rule.’8. Differentiate between ‘lock outs’ and ‘closures.’9. What is meant by ‘conflict’ and why does it become a problem if not

managed properly?10. Distinguish between ‘conciliation; and ‘arbitration.’11. Why might employee participation and industrial democracy lead to a

win-win outcome?

Review Questions & AnswersPart 2

12. How might no-strike agreements help to improve the image of a labour union?

13. What is ‘litigation?’14. Outline why avoidance is not often regarded

as an ideal method of conflict resolution. 15. How do management and leadership styles

affect employees-employer relations?

Key TermsPart 1

• Arbitration: a process that involves an independent person, known as the arbitrator, deciding on an appropriate outcome to a dispute, which becomes legally binding.

• Collective Bargaining: a negotiation process whereby trade union representatives and employer representatives discuss issues with the intention of reaching a mutually acceptable agreement.

• Conciliation (also Mediation): a process whereby the two parties involved in a dispute agree to use the services of an independent mediator to help in the negotiation process.

• Conflict: refers to disagreements that result from differences in the attitudes, beliefs, values or needs of people, which can arise from past rivalries and personality clashes.

• Conflict Resolution: the course of action taken to resolve conflict and differences in opinion.

Key TermsPart 2

• Deadlock (also Stand-off): a situation where there has been a failure to reach a satisfactory compromise in the negotiation process, hence they usually lead to industrial disputes.

• Employer’s Associations: organizations that represent the general views and interests of all businesses within a certain industry by influencing government action and negotiating with trade unions.

• Go-Slow: a form of industrial action that involves employees working at the minimum pace allowable under their employment contract.

• Industrial Action: activities taken by employees who are disgruntled by working conditions and practices, such as go-slow, work-to-rule, strike action, and overtime bans, usually a result of bad employee-employer relations.

• Industrial Democracy: employees are given responsibilities and authority to complete tasks, like being part of the decision-making process.

• Negotiation: the bargaining process whereby separate parties attempt to achieve a mutually acceptable outcome.

Key TermsPart 3

• Single-Union Agreement: an organization agreeing to participate in the collective bargaining process beginning with a single trade union that represents the workers.

• Staff Associations: intend to uphold the welfare of their staff members while operating only within an organization.

• Strikes: a form of industrial action that involves employees refusing to work.

• Trade Union (also Labour Union): an organization that consists of worker members who unite to protect their rights and well-being in the workplace.

• Walk-Out: a form of industrial action that happens when employees independently or collectively leave their place of work as a sign of protest or disapproval of management decisions or actions.

• Work-to-Rule: when employees do the absolute minimum required, as stated in their employment contracts; they adhere precisely to all rules and regulations in order to reduce productivity.