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Collective Bargaining





In some industries, rates of pay are decided nationally by collective

bargaining between employers and trade unions. The employers are rep-

resented by their trade associations and the trade unions by representa-

tives of all the unions involved. These representatives decide a minimum

rate of pay for workers in the industry. In a few industries, they decide

the actual rates of pay. In addition, they usually decide the length of the

working week overtime rates and the minimum length of holiday. There

may also be talks on working conditions and other matters, including:

· sick pay

· maternity leave

· fringe benefits

· changes in working practices

· training

· recruitment

· health and safety

· pensions.

National bargaining is also used in much of the public sector to set

salary scales and other working conditions for employees throughout the

country.

In the private sector, the working conditions in firms vary so much

than it has long been common to hold local talks on pay and condi-

tions in addition to the national discussions. This collective bargaining

between management and unions goes on at both company and factory

level. For example, the managers and unions at plant level might agree

that shop-flora workers should be paid 50p an hour extra for working

evening shifts and 140p an hour extra for night shifts. Extra payments for

white-collar workers might also be decided at the local level. There can

be a lot of hard bargaining over pay at local level. Very often, the unions

are forced to accept a productivity deal, which means that higher wages

have to be paid for by greater productivity or efficiency.

Other matters that might be decided locally include:

· redundancy policies

· productivity agreements

· appraisal systems.

In recent years, there has been a great decline in collective bargai-

ning. It now covers less than half of all employees. In the private sector,

many employees, particularly white-collar workers, have been taken out

of collective bargaining. They now have personal contracts of employ-

ment with their employers. The Trade Union Reform and Employment

Rights Act of 1993 encouraged the change by allowing employers to of-


 

 

fer pay rises or other inducements to employees who opted out of col-

lective bargaining.

As the Study Points have shown, pay is often decided by some form

of job evaluation. Many firms have switched from set salary scales to

performance-related pay rises. Employees’ performance during the

year might be judged by a manager. Or they might be given pay rises for

achieving certain targets. For example, bank employees might have to

sell a certain number of insurance policies to customers to get a pay rise.

There has also been a change to performance-related pay in some parts

of the public sector. It has been introduced in parts of the Civil Service

and in National Health Service trusts. From 1996, all government de-

partments and agencies became responsible for their own pay negotia-

tions with staff below the senior level.

Some Far Eastern companies with factories in Britain and trade

unions have introduced ‘new style’ agreements which depend on much

closer co-operation between managers and unions. Some of the main

features of these ‘new style’ agreements are:

· Recognition of only one union. It is easier for management to make

deals with only one union than with a number of unions. It also strength-

ens the union if no other union is allowed to join in the talks.

· Single-status employment. The traditional differences between man-

agers and workers, between ‘them’ and ‘us’, is ended. Manual workers

have the same hours of work, holidays, canteens and car parking as

white- collar workers.

· Labour flexibility. All workers do any job which they are capable of

doing.

· Teamwork. There is a greater emphasis on teamwork and co-opera-

tion between all grades of employees.

· No-strike agreements. The union agrees not to strike. Both manage-

ment and union agree to accept the decision of an arbitrator, or inde-

pendent judge, in any dispute. Pendulum arbitration is often used.

In pendulum arbitration, the arbitrator makes a straight choice be-

tween the views of the management and the union. For example, if the

management has offered a pay rise of Ј1 an hour and the union wants Ј2

an hour, the arbitrator cannot say that the rise should be Ј1.50 or Ј1.75.

He or she has to say ‘yes’ to either the managers or the unions: the pay

rise has to be either Ј1 an hour or Ј2 an hour. This kind of arbitration

encourages both sides to be moderate in their demands. They know that

if their case is extreme it is likely to be rejected outright.

Some trade unionists see these ‘new style’ agreements as the way for-

ward into a new era of co-operation between management and workers.

Others believe it a sacrifice of their basic rights.

 


 

 

To increase worker participation, or Works councils share, in the

running of businesses, the European Union (EU) has decided that ‘Eu-

ropean Committees’, or works councils, should be set up in all multina-

tional firms in the EU. This will apply to all firms with more than 1,000

employees that have branches employing at least 100 workers in two or

more EU countries. The works councils have the right to be informed

and consulted on all matters that affect the interests of the workers.

 

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