Management, Unions and Collective Bargaining

What Is Management?

Management is getting things done with and through other people via planning, organising, leading and controlling. Management is also coping with complexity, and dealing with ambiguity and paradox. To manage is to control the activity of a process and achieve desired results. Knowledge of the process is not required, since management may be "trial and error" until one learns "what works" in certain situations. However, knowledge of the processes and conditions that affect them is a great benefit for effective management. Two factors create great difficulty for effective management: complexity of the system and delays between the managerial action and the appearance of the results.

If you poke a complex system, it responds. But if you poke it again and try to very carefully do it the same as before, you may get similar results at first, but it quickly gives novel results that you wouldn't have expected from the first results. If you poke it again and try very carefully to do it as before, again the early results may be similar but quickly become unique. This results in surprises, more often than not. Predictability is limited to early results. To manage a complex system means that a manager must be able to detect early deviations from expectations quickly, and take actions to correct their undesired trends. If one waits too long, then the deviation is greater, and increasingly going awry which requires a strong action for adjustment. This creates an "overshoot" of the desired condition and an increasingly violent action-reaction cycle is set up. In electronic control systems terminology, there is positive feedback that causes increasing oscillations deviating from the average (desired) state. In a nutshell, the system quickly becomes unmanageable.

Delayed responses after an action compound the difficulty of managing complex systems. The delay in response often means that the response being monitored shows a deviation from expected response after much has changed in other parts of the system, making it more difficult to know the factors that one should adjust to get the desired corrections. This condition also makes it much more difficult to empirically develop skill. Limited by the sophistication of today's science, the needed models are oversimplified and largely irrelevant to this kind of system. This is an extremely difficulty system to manage!

In short management is

What is a Trade Union?

The expression ‘trade union’ means any combination whether temporary or permanent, the principal objects of which under its constitution are the regulation of the relations between workmen and masters, or between workmen and workmen or between masters and masters or the imposing of restrictive conditions on the conduct of any trade or business and also the provision of benefits to members.

A Trade Union as we understand the term is a continuous association of wage earners for the purpose of maintaining or improving the conditions of the working lives.

Aims and objectives of Trade Unions

One of the central aims of the trade union movement in most countries is to extend the control of their members over their working conditions and working lives. In many instances this has led trade unions to support moves towards ‘industrial democracy’. They aim to protect members and other workers from the civil dangers arising from harsh, exploitative areas of employment. Clearly, unions defend and seek to advance the regulation of ethical standards in employment and our range of civil liberties associated with work

A union's mission is to represent its member’s interests in the employer-employee relationship and in particular to "bargain" with employers over the wage-work package and its implementation.

Here I am going to take a typical example of British trade unions because they cover more objectives than others.

Virtually all trade unions aim to provide a variety of friendly society benefits for their members. Many of the larger trade unions aim to provide educational facilities for their members. Most unions, individually, and collectively also aim to represent their members in discussions with government (both central and local) and present their members’ case to inquiries, commissions and the like.

An indication of the breadth of the objectives of British trade unions can be gained by looking at the aims expressed in their rulebooks and constitutions. For example, the National Union of Mine workers includes amongst its objectives the presentation of

The National Union of Boot and Shoe Operatives in their objectives similarly place emphasis on what might be termed ‘political activities’. They state that the union shall make provision

Other unions stress the importance of the provision of benefits for their members. The transport and General Workers’ Union, for example, aims to assist members by providing cash benefits ‘in times of dispute, victimisation, sickness and accident’ and legal aid. The Amalgamated Society of Woodworkers similarly aims to provide assistance to members,

 

In general trade unions

Is trade union necessary?

Questions do arise as the ethics of trade union behaviour - past, current and future - which seek to constrain business practice and managerial behaviour.

What is ethical about:

Only one President in the history of the United States has been a union president; in fact, he is a lifetime member of an AFL-CIO union. Furthermore, he was the president of his union longer than anyone in its history, and in his fifth term as its president he led the first major strike it ever conducted. That president was Ronald Reagan; the union was the Screen Actors Guild; and Reagan took the course he did because of circumstances.

In his biography, An American Life, he notes that joining the union was not something he particularly wanted to do but, as a contract player, it was something he had to do. Then, "as I spoke to some of the older career actors I met at Warners and discovered how much they'd been exploited in the past, I began to change my mind...As far as I was concerned, some of the studio bosses were abusing their power. Throughout my life, I guess there's been one thing that's troubled me more than any other: the abuse of people and the theft of their democratic rights, whether by a totalitarian government, an employer, or anyone else." (Reagan, pp 89-90)

Despite this union background, he became the only United States president directly responsible for the collapse of a union, that of the Air Traffic Controllers, PATCO, one of the few unions to support his candidacy. It was Reagan's view that no president could tolerate an illegal strike by Federal employees and that "you cannot allow a strike to shut down a vital government service", or, in Calvin Coolidge's words while Governor of Massachusetts, "There is no right to strike against the public safety by anybody, anywhere, at any time." (Reagan, p. 282)

Those who wish to reduce, if not eliminate, union influence can best do so by altering conditions so employees do not see the need for such an organisation, and so they can function in a more peaceful and collaborative manner when and where they do exist. This is possible. Non-unionism offers employers more flexibility in their employee relations strategies which may translate also into higher wages and improved working conditions.

What is Collective Bargaining?

The term collective bargaining was used to refer to negotiations concerning pay and conditions of employment between trade unions on the one hand and either an employer or an employers’ association on the other. There are, however, different kinds of collective bargaining. There is for example, nationally based collective bargaining, which results in agreements covering the whole of one or more industries and workplace bargaining, which results in agreements covering a relatively small number of workers, probably only those working in one particular factory or even one particular workgroup. There is also bargaining which produces substantive agreements (that is, agreements which deal with matters such as rates of pay, holidays and hours of work) and that which produces procedural agreements (that is agreements which deal with how discussions on substantive matters should take place and how disagreements should be reconciled).

According to Flanders3, Collective bargaining is a ‘rule making’ activity which regulates but does not replace individual bargaining. It is best seen as a method of job regulation which should be compared to unilateral regulation (by employers, employees or the State) rather than to individual bargaining.

Collective bargaining is like horse trading in a marketplace. The process and outcome of a trade is determined by the extent of:

 

Nature of Collective Bargaining

There are three theories of collective bargaining.

Collective Bargaining:

Difference between individual bargaining and collective bargaining

Flanders highlighted a number of differences between collective and individual bargaining. In an individual bargain the employer may or may not consider it in his interests to bring his full superiority of bargaining power to bear upon the employee - the possibility of his not doing so is explicitly recognised and explained as the occasional employee who finds himself in a strong position may or may not choose to take maximum short-term advantage of it – probably not if he has in mind the desirability of a long-term relationship with his employer.

The difference between the individual and the collective bargain is a difference in the disparity of power. The reason why the individual refusal is associated with the notion of moving on if the employer declines to improve his offer is because the disparity of power is so great that the individual hardly expects any other course to be practicable. The collective refusal, on the other hand, embodies the hope that sufficient power can be deployed to bring the employer to terms. Neither expectation is necessarily realised.

Individual Bargain

Collective Bargain

  • Is about the buying or selling of a particular commodity.

  • Does not involve the buying or selling of anything, it is merely an agreement on the conditions under which buying or selling will take place.

  • Usually Stipulates in detail the terms and conditions of trade.

  • Only the minimum terms and conditions are specified.

  • Is essentially a market activity (it is about buying and selling).

  • Is essentially a political activity (a strike or a lock out is really a diplomatic use of power; neither side intends to break the relationship completely as they both realise that eventually they will have to reach an agreement.

  • Not necessarily undertaken by professional negotiators.

  • Is frequently undertaken by professional negotiators who recognise the need to maintain relationships with the other side and therefore will not necessarily press their advantage to the full.

  • Restricted to a discussion of economic matters.

  • Not restricted to economic matters, but is concerned with other issues; it is concerned with for example, with workers’ rights, the control of industry and so on.

International Comparisons

The British model of collective bargaining probably can be contrasted most vividly with its US counterpart. Traditionally the hallmark of British collective bargaining has been its ‘voluntary nature’; although it has been encouraged by the state generally unions and employers have been left to establish their own bargaining machinery. However, in the USA the bulk of collective bargaining has a legislative base. Perhaps the most important piece of legislation in this context is Wagner Act of 1935, which laid down the procedure for the registration of bargaining units and the recognition of bargaining rights.

Collective bargaining in Britain and the USA is also markedly different in the substantive nature of agreements reached. Two examples might be cited. The first is the difference in terms of the length of the contract. Traditionally in the USA collective agreements have been fixed term, usually for a year or longer; crucially they have all had a definite date on which they have come to an end. Traditionally in Britain agreements have been open-ended. The fixed term contract has never been as widely accepted in Britain as in the USA with the result that British bargaining is not geared, as in the USA, to the annual bargaining round. This difference can be important for it means that in the USA there is a period, known well ahead, when major disputes are likely to occur. On the other hand, in Britain it is far more difficult to predict disputes or to assume that they will fall within a fairly well defined period.

The second example concerns the range of issues covered by collective bargaining. Traditionally trade unions in the USA have sought and been much more successful than their British counterparts in obtaining fringe benefits for their members through collective bargaining. Partly, this has been due to the policy of the National Labour Relations Board in the USA which has insisted, with its legal powers, that employers bargain over a wide range of issues; however it is also the result of a number of other factors, such as the restricted role of the state in the provision of welfare benefits, the relatively weak political links of the unions and so on.

In some ways collective bargaining in Europe reflects a mixture of British and US styles. For example, bargaining is based on national negotiating machinery, as in Britain, rather than local machinery, as in the USA. This is probably most visible in West Germany, where nearly all bargaining is on an industry basis and virtually none is at plant level. It is also broadly true of most other European countries; in particular, in Denmark, the Netherlands and in France. However, while the level of bargaining in most European countries resembles that in Britain, in most cases its legal framework more clearly resembles the US model.

Determinants of Bargaining Machinery

Collective bargaining machinery essentially is a reflection of a particular social and political climate. The bargaining machinery is largely a product of the industrial relations system in which it operates and in turn, the industrial relations itself is crucially influenced by its environment, the wider social system. Thus one would account for variations in bargaining machinery by looking at the differences in the power relations of the actors who make the rules (the unions, employers and government), different market contexts and so on. One cannot look at collective bargaining machinery in isolation; it can only be understood if examined as a part of a wider network of relationships and institutions.

However, the line of reasoning is by no means constrained in this way; it can easily be applied to differences between industries in the same country, between different firms in the same country, between different firms in the same industry and between the same firm at different periods of time. The level of analysis is relatively unimportant; the method, which stresses the importance of viewing collective bargaining machinery as part of a wider system, is applicable to all levels.

Collective bargaining machinery can be best viewed in a historical perspective as the outcome of the interaction of social and economic conditions and the motives and perceptions of individuals. Social and economic conditions limit the action and influence the attitude and perceptions of individuals at any particular point of time. However, the individual retains a degree of ‘non-determinancy’ through which he contributes uniquely to the creation of the social conditions of the future, which will in turn limit but not completely constrain the actions of others.

Effects of collective bargaining on incomes and differentials

There are two questions that need to be asked about the economic and social effects of collective bargaining. The first one is what effect has collective bargaining had on the distribution of national income? The evidence on this question is not as clear. For example, while it appears that the share of national income accruing to labour has increased in Britain and the USA over the last eighty or so years, the reason for this increase is less than clear. There is some evidence that trade unions may have been able to increase the incomes of their members, although the size of the estimated increase in earnings was rather less. However, it is not clear that such higher earnings necessarily have been at the expense of profits rather than other workers, and therefore that unions have been responsible for the increase in the shares of national income gained by labour. It is certainly possible to argue that factors like taxation have been just as important in bringing about changes in the distribution of the national income as trade union action. Of course, if this were the case then it would be important to not that trade union action may have been important in pressing management to improve working methods and thus increasing the size of the national income, in preventing the proportion of the national income accruing to labour from falling and that trade union political activity, in part at least, may have been responsible for persuading governments to take action on items like taxation.

The second question is, what effect trade union action through collective bargaining has had on differentials between groups of workers. Again evidence is less than fully satisfactory or conclusive. It appears, for example, as though there has been a degree of long term stability in wage differentials. Of course, there have been some important shifts; and some which may appear relatively minor when looked as a part of the overall structure, nevertheless may appear extremely important to the workers concerned. Such shifts may form the basis for the framing of a wage claim and industrial action, or for the decision to seek unionisation on the part of a section of the work force.

Social implications of collective bargaining

Collective bargaining is now widely accepted in most industrialised nations. However, this has not always been the case. In the USA, employers, often aided by governments, fought pitched battles to prevent the spread of unionism and deny bargaining rights. Similar examples, although often not as extreme, could be drawn from the history of most other nations. What, then has led to this change of heart and to this general acceptance of collective bargaining?

At one level this change of heart probably represented nothing more than a belief that the fight to prevent the spread of trade unionism and collective bargaining was not worth the effort; in essence to oppose collective bargaining was causing more problems than might be expected if it were accepted. The denial by employers of the right of employees to organise and their refusal to accept the produce of collective bargaining had been the cause of strikes and other manifestations of industrial conflict. From this point of view employers and governments merely ‘learned to live’ with collective bargaining.

However, the more positive reason for accepting collective bargaining is that it can help to regularise and institutionalise industrial conflict.

What I’ve learnt from this subject

Though the incidents that I am going to talk about now happened well before I started this assignment, it makes more sense to me now than it made when I first heard about it. Now that we are at the end of the year, and we are heading towards "millennium", we hear all this news about an extra holiday and people who do work on the New Year day being paid much more than the normal amount. There were four cases that I heard about, I feel were clearly cases of collective bargaining. All four cases were pertaining to four different industries. And the results were different.

The first one was that the taxi drivers in Dublin approached the government through their union asking for 300% increase in the fare. This request was rejected and the government refused to accept it, but the taxis will still ply the roads of Dublin on New Year’s day, though the number of taxis will be lesser than the normal amount. It was a clear case of collective bargaining, though there was no long-term implications for it. The second case was that the barmen in Dublin asked for increased pay for working on New Year’s eve/day. The result is that the government has decided to close all pubs by 1:00am on New Year’s day. The third case was in the company that I work for. To work on New Year’s eve/day, the staff has been asked to volunteer, and have been told that they will be paid 300% for the day that day work. This was done because there was a requirement for people and the Staff association put their terms to the company and this was accepted. And the staff association in this case has insisted that the no person will be forced to work if that person did not want to.

And the fourth case was that of the nurses. This was a different case. All the nurses in Ireland went on an infinite strike because their pay was very less and their working conditions were not good. The strike went on for ten days till the government accepted the terms put down by the nurses union. In this case, the implications were long term unlike that in the first three cases. The strike not only affected the nurses, because they were not paid for the days that they were on strike, but also the doctors who were over worked during that time. The patients had to suffer as most of the hospitals had to close down the out patients unit because they could not handle them without the nurses.

The conclusion is that, collective bargaining should be approached with an attempt to identify a crucial point or points in the development of machinery. If not handled in the right time and right way, it may result in strikes, which result in financial losses, economic dislocation, violence and human misery, not only to those involved in the struggle but also to the general public.

Some definitions - Unions and Collective Bargaining

Appropriate Bargaining Units - groups of employees deemed suitable by the National Labour Relations Board to decide whether or not to have union representation.

Arbitration - the intervention of an impartial third party into a dispute where that party has the power to make a binding resolution of the dispute.

Bargaining Power - a party's ability to move the other party's bargaining position closer to its own.

Blacklist - the circulation to other employers of the name of union sympathisers so that they will be unable to find work.

Business Cycle - the regular expansions and contractions of economic activity.

Capitalism - an economic system based on private property and markets.

Check Off - a part of the collective bargaining agreement which provides for the automatic deduction of union dues from the pay of employees who agree to allow it.

Collective Bargaining - the joint determination of work rules by representatives of labour and management.

Co-operation - an economic enterprise jointly owned by its workers or customers.

Craft Unions - unions that organise workers in a single occupation or set of occupations.

Doctrine of Criminal Conspiracy - the position that for workers to band together is illegal even when their intent is to do things which would be legal if done individually.

Good Faith Bargaining - the requirement that unions and management approach negotiations with a genuine desire to overcome their differences and to reach agreement.

Grievance Procedure - the provision of a collective bargaining agreement, which deals with how, disputes over the application of that agreement will be handled.

Industrial Unions - unions, which organise, workers who produce a single product or set of products.

Injunctions - court orders to a person or persons to do or to cease doing some particular thing. Often used in the past to end strikes.

Matters of Interest - issues, which arise in the negotiation of a collective bargaining agreement.

Matters of Right - issues, which arise in the enforcement of a collective bargaining agreement.

Mediation - the intervention of an impartial third party into a dispute for the purpose of assisting the disputing parties in reaching their own agreement.

Open Shop - arrangements in which in principle employees are hired without regard to union status. In practice, such shops often discriminate against union sympathisers.

Shop Steward - a voluntary part-time union officer at the shop floor level who is the link between members and the local union. This person often is responsible to "police" the application of the collective bargaining agreement.

Sit-down Strikes - industrial action in which the not only employees cease work but also refuse to leave the workplace.

Union Density - the percentage of the labour force or of total employment belonging to unions.

Union Security Agreement - a collective bargaining provision which involves mandatory membership in the union or payments to it.

Voluntarism - the philosophy that the interests of workers are best served not by government assistance but by voluntary collective bargaining with employers through unions.

Yellow Dog Contract - a provision of an employment contract in which the worker agrees that he/she is not a union member and will not become one.

References:

  1. Industrial Relations – Michael P. Jackson.

  2. S. & B. Webb, Industrial Democracy (Longmans, London).

  3. A.Flanders ‘Collective Bargaining: A Theoretical Analysis’, British Journal of Industrial Relations, vol. VI no.I,pp 1-26.

  4. http://www.esb.utexas.edu/drnrm/WhatIs/management.htm