Collective bargaining

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A Collective agreement is a labor contract between an employer and one or more unions. Collective bargaining consists of the process of negotiation between representatives of a union and employers (represented by management, in some countries by employers' organization) in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions and grievance-procedures, and about the rights and responsibilities of trade unions. The parties often refer to the result of the negotiation as a Collective Bargaining Agreement (CBA) or as a Collective Employment Agreement (CEA).


[edit] Economic Theory of Collective Bargaining

Economic Theory provides many models which are able to explain Collective Bargaining: the first is the so-called Monopoly Union Model (Dunlop, 1944), according to which the monopoly union has the power to maximize the wage rate after that the firm has chosen the level of employment. This model seems to be unrealistic and is being abandoned by the recent literature. The second is the Right-to-Manage model which was developed by the British school during the 1980s (Nickell); here the labour union and the firm bargain over the wage rate according to a typical Nash Bargaining Maximin can be written as Ώ = UβΠ1-β, where U is the utility function of the labour union, Π the profit of the firm and β represents the bargaining power of the labour unions. The third model is called the efficient bargaining (McDonald and Solow, 1981) where the union and the firm bargain over both wages and employment (or, more realistically, hours of work).

[edit] United Kingdom

The British academic Beatrice Webb reputedly coined the term "collective bargaining" in the late 19th century: the OED quotes her use of it in 1891 in Cooperative Movement. Webb aimed to characterise a process alternative to that of individual bargaining between an employer and individual employees. Other writers have emphasised the conflict-resolution aspects of collective bargaining, but in Britain the most important refinement in usage came from Allan Flanders, who defined collective bargaining as a process of rule-making leading to joint regulation in industry. Most commentators see the process of collective bargaining as necessarily containing an element of negotiation and hence as distinct from processes of consultation, which lack the element of negotiation and where employers determine outcomes unilaterally.

In the United Kingdom collective bargaining has become, and has received endorsement for many years as, the dominant and most appropriate means of regulating workers' terms and conditions of employment, in line with ILO Convention No. 84. However, the importance of collective bargaining in the United Kingdom and elsewhere in the industrialized world has declined considerably since the early 1980s. Its decline in the public sector stems in part from the growth of Review-Body arrangements provided through the Office of Manpower Economics for groups of workers, including for the majority of National Health Service staff.

Despite its significance, in the United Kingdom there remains no statutory basis for collective bargaining in the fields of learning and training, a situation that has attracted the attention of both the Trades Union Congress and members of the Royal College of Nursing. A coalition has formed which actively seeks to remedy this situation by expanding the scope of collective bargaining to encompass learning and training.

[edit] United States

In the United States, the National Labor Relations Act covers most collective agreements in the private sector.

Many notable collective bargaining agreements (CBAs) in the United States involve major professional sports leagues. Because of a history of poor relations between the players' unions and owners of all the various major leagues, as well as because of the tremendous amounts of money involved, it has become difficult in recent years to work out agreements. A total breakdown in talks between the sides wiped out the entire 2004 2005 NHL hockey season, making the NHL the first major North American sports league to lose an entire season to labor issues (the relevant parties reached an agreement in time to play the 2005-06 season). The NHL has historically had poor labour relations, resulting in numerous lockouts of players and the shortening of many seasons.

The National Football League (NFL) had fears that disagreements over revenue allocation might force teams in 2006 to cut numerous star players in order to stay under the agreed-upon salary cap. Beyond this year, without an agreement for 2007, the salary cap provisions would have sunset. This could have caused players and owners both to seek substantially disparate compensation guidelines in their next CBA (e.g., sizes of pay increases year-to-year, the effect of signing bonuses on a team's cap, etc), raising the spectre of a strike in 2008. However, on March 8, 2006 the owners agreed in a 30-2 vote (the Buffalo Bills and Cincinnati Bengals voting against it) to accept the National Football League Players' Association's proposal, and also settled the revenue-sharing controversy, forestalling the above scenario.

The National Basketball Association's CBA also expired in summer 2005, and though the two sides ultimately reached an agreement, its last expiration caused the cancellation of one-half of the 1998-99 NBA season due to lockout.

Major League Baseball has had numerous disagreements between team owners and the MLBPA. There have been 3 strikes led by players in the 1972, 1981, and 1994 seasons. The 1994 World Series was canceled because of a strike. This was the first time that a major professional team sport had their championship canceled.

[edit] European experience

Many contintental European countries, like Austria, the Netherlands and Sweden, have a social market economy where collective bargaining over wages, is done on the national level between national federations of labor unions and employers' organizations. In Finland, a Comprehensive Income Policy Agreement can be reached in some years. It is collective bargaining taken to its logical maximum, setting a single percentage raise for virtually all wage-earners.

For the trade unions, several sectoral federations are in charge of the collective bargaining for their affiliates emf-fem for the metal workers

In some countries, such as Finland, collective agreements with enough support are universally applicable, in a particular field, regardless of union membership. Effectively, the universal collective agreement sets the minimum wages and other benefits, under which no employer may go with any employee, union member or not. Personal benefits can be given regardless. Contrast this with the U.S. practise where all members are forced to join the union and then cannot anything but the union wage.

In France, collective bargaing became legal with the Matignon agreements passed in 1936 by the Popular Front government.

[edit] See also

[edit] References

  • Buidens, Wayne, and others. "Collective Gaining: A Bargaining Alternative." PHI DELTA KAPPAN 63 (1981): 244-245.
  • DeGennaro, William, and Kay Michelfeld. "Joint Committees Take the Rancor out of Bargaining with Our Teachers." THE AMERICAN SCHOOL BOARD JOURNAL 173 (1986): 38-39.
  • Herman, Jerry J. "With Collaborative Bargaining, You Work WITH the Union--Not Against It." THE AMERICAN SCHOOL BOARD JOURNAL 172 (1985): 41-42, 47.
  • Huber, Joe; and Jay Hennies. "Fix on These Five Guiding Lights, and Emerge from the Bargaining Fog." THE AMERICAN SCHOOL BOARD JOURNAL 174 (1987): 31.
  • Liontos, Demetri. COLLABORATIVE BARGAINING: CASE STUDIES AND RECOMMENDATIONS. Eugene: Oregon School Study Council, University of Oregon, September 1987. OSSC Bulletin Series. 27 pages. ED number not yet assigned.
  • McMahon, Dennis O. "GETTING TO YES." Paper presented at the annual conference of the American Association of School Administrators, New Orleans, LA, February 20-23, 1987. ED 280 188.
  • Namit, Chuck; and Larry Swift. "Prescription for Labor Pains: Combine Bargaining with Problem Solving." THE AMERICAN SCHOOL BOARD JOURNAL 174 (1987): 24.
  • Nyland, Larry. "Win/Win Bargaining Takes Perseverance." THE EXECUTIVE EDUCATOR 9 (1987): 24.
  • Smith, Patricia; and Russell Baker. "An Alternative Form of Collective Bargaining." PHI DELTA KAPPAN 67 (1986): 605-607.

[edit] External links