- To define collective bargaining
- To examine the stages in collective bargaining
What is Collective Bargaining
Collective bargaining is a process whereby trade unions, representing
workers, and employers through their representatives, treat and negotiate
with a view to the conclusion of a collective agreement or renewal thereof
or the resolution of disputes.
A collective agreement is usually an agreement in writing between an
employer and a union, on behalf of workers employed by the employer. It
contains provisions reflecting terms and conditions of employment of the
workers, and conferring to them their rights, privileges and
Sometimes the terms “bargaining” and “negotiating” are used to describe the
same process. Theoretically, the term bargaining is probably better used to
describe the economic interaction between an employer and an employee which
is finalized in the individual contract, whether written or unwritten. When
an employer hires a worker, he can demand labour, and agree on a price for
that labour. The offer, acceptance, consideration, and intention to create a
legal relationship constitutes a bargain to which compliance can be sought
When trade unions negotiate a collective agreement with employers, the
process and the outcome are somewhat different. In the first place, trade
unions do not sell labour to employers, unlike individual workers. Likewise,
employers do not pay trade unions for work done. Trade unions use collective
bargaining as a means of setting the rules by which labour in the workplace
will be regulated and remunerated.
The process of collective bargaining is in reality a series of negotiations,
diplomatic and political manoeuvres, with the influence of economics. The
ILO Convention No. 154
The Promotion of Collective Bargaining
For the purposes of this Convention, the term “collective bargaining”
extends to all negotiations which take place between an employer, a group
of employers or one or more employers’ organizations on the one hand, and
one or more workers’ organizations, on the other, for
- determining working conditions and terms of employment; and/ or
- regulating relations between employers and workers; and/or
- regulating relations between employers or their organizations and a
workers’ organization or workers’ organizations.
trade union negotiator has to negotiate with his or her principals, the
general membership, as well as with the union’s negotiating teams, even as
the negatiator negotiates with the employers. The employers’ negotiator is
often in a similar situation.
Voluntaristic vs. legal industrial relations systems
In an industrial relations’ system that is predominantly voluntaristic,
collective bargaining processes such as recognition, the collective
agreement and industrial action are likely to be based on a gentleman’s
agreement made acceptable by custom and practice. Gradually voluntarism has
lost ground in the Caribbean and most industrial relations system have
legislation covering recognition, the collective agreement, the formation
and structure of bargaining units and the management of industrial action.
In countries such as Trinidad and Tobago and Antigua and Barbuda, Industrial
Courts play a major role in industrial relations. In Jamaica, the Industrial
Disputes Tribunal is very influential. Barbados is still unusual in that
there is little or no regulation relating to core collective bargaining
Over time, Caribbean States have ratified the main International Labour
Organization’s Conventions on collective bargaining. These include:
- Convention No. 87, concerning Freedom of Association and Protection of
the Right to Organize;
- Convention No. 98, concerning the Application of the Principles of the
Right to Organize and Bargain Collectively; and
- Convention No. 151, concerning the Protection of the Right to Organize
and Procedures for determining conditions of Employment in the Public
All Caribbean countries have developed a legislative and institutional
framework supportive of collective bargaining.
2.2 Stages in Collective Bargaining
The first step in the collective bargaining process is that of
organizing a group of workers, gaining recognition and developing a body of
proposals to submit to the employer as the basis of a collective agreement.
The development of proposals to be submitted on behalf of workers is a
delicate process over which great care has to be taken.
Trade union leaders are required to meet with the general membership and
seek a clear understanding of the changes in their contracts which they
require. Such a meeting may demonstrate differences among the members on
serious issues, such as levels of remuneration. The submission of many
issues, including levels of compensation and conditions, will have to be
examined against market considerations. The role of a research facility
within a union is thus very important.
Elements of submissions
Negotiators recognize that the submission must encompass various elements.
Industrial relations existed at the workplace before the entry of the union.
A pattern of benefits, conditions, rules and regulations is usually in
place. The negotiator must make an assessment of those provisions that are
already adequate and those where improvements can be made.
In terms of wages/salaries and other areas of remuneration, the first
agreement is for setting a schedule in place, and must not be confused with
a revision. In a situation where wages/salaries are very far below the
market value in circumstances that cannot be justified, trade unions can
sometimes achieve significant improvements for workers. In some cases,
wages/salaries may already be competitive in the market and the union may
focus on conditions and other benefits.
Traditionally, the trade union submits a list of changes which forms the
agenda for negotiations. In recent times, the list may be enclosed in a
draft collective agreement which helps to ensure that a collective agreement
is signed early after the closure of negotiations.
With recognition agreed, and proposals submitted, the union will usually
inform the employer of the names of the shop stewards at the workplace, and
request the extension of courtesies in the performance of their functions.
Composition of negotiating team
In some instances, union negotiations are led by paid professional staff
members and in others, by shop stewards from the workplace. In many
instances, the manager, the human resources manager, and the financial
officer or accountant may lead the management’s team.
Many trade union negotiating teams are led by generalists who have to
develop expertise on a wide area of subjects such as compensation practices,
benefit schemes, pensions and safety and health conditions. They must also
have some legal training for drafting language in agreements.
There is a growing tendency for specialists to sit on negotiating teams.
Thus one person will deal with pension issues, another with health care and
In large companies with Human Resource Management Structures, there are
officers who specialize in different areas of industrial relations such as
counselling, training, safety and health, negotiations, benefits, management
and personnel matters.
An Eight (8) Step Approach to Collective Bargaining or Negotiating
With the proposals submitted, and the team selected, the chief negotiator/
leader may recognize the importance of the following phases of negotiations:
Negotiation has already been described as a process involving diplomacy.
Some claim that the negotiations forum is a ‘contested terrain’, that the
process is akin to an act of war, where words, wit and logic take the place
of lethal weapons.
A simple definition of negotiating is a process through which parties
move from their divergent positions to a point where agreement may be
This model suggests that the union will submit a set of proposals which it
considers as an ideal. However, it may be willing to settle for less than
the ideal. At some point between the ideal submission and the settlement,
the union will resist any pressures by the employer to go below the
resistance point. The employers are in a similar position. Ideally, they may
not wish to make any improvements, but they will establish a mandate for
settlement, and also have a resistance point.
This model can be problematic. If the ideal positions of the two sides, and
the likely settlement position diverge greatly, the chances of an impasse,
breakdown and subsequent industrial action looms.
Clearly also, no negotiator wants his position to be known by those on the
other side! In the case of the trade unionist, his members may feel that
they have the right to set his target, and that he cannot settle other than
at the mandate they have given. Such an inflexible position may be difficult
to maintain, as the more persons who are aware of the mandate, the more
likely it is that it may reach the ‘other side’.
Trade union negotiators must be adept at handling meetings and at
communicating with the membership to ensure that their goals and objectives
Preparation for any serious negotiations would be incomplete without a
thorough examination of factors external and internal to the workplace which
has a bearing on the negotiations.
Examining external factors - the macro-economic environment
Part of the ‘mental’ preparation of the negotiator is to be in tune with the
environment impacting on industrial relations. The formation of a Caribbean
Single Market and Economy, the existence of trading blocs, the imminent
formation of the Free Trade Area of the Americas and the Cotonou Agreement
all have implications for areas of economic and industrial life in the
Caribbean, and for the Caribbean workplace and the Caribbean worker.
Trade unionists are very aware that productivity and competitiveness are key
issues at the workplace. Workplaces are in competition with each other
within territories, across territories, and indeed, across the globe. Those
which compete successfully will survive, those which fall behind will
disappear. Labour productivity is an important factor in competition and
part of the negotiator’s task is to examine the productivity of the
Preparation for negotiations will include an examination of macro-economic
factors such as employment levels, the rate of inflation, the foreign
reserves, investment, interest rates, and growth in the economy, among other
things. Where the macro-economic situation appears stable and there are
signs of prosperity, employers are more likely to make reasonable
settlements. A major difficulty in the Caribbean is that there is a great
divergence in macro-economic performance. Some countries have also performed
in such a way that even in years of solid growth, the benefits have not
accrued to the mass of workers.
Examining internal factors - enterprise performance
An examination of the internal performance of the business enterprise is
even more important than information on the macro-economic environment. The
sharing of business information is critically important for effective
negotiations. In too many instances management refuses to provide vital
information to trade unions. This is especially so where there are single
owner proprietorships, partnership, and private limited liability companies.
Branch plant operations of foreign-owned companies also often refuse to
Trade unions should be aware of the profit and loss statements, balance
sheets, notes and other information provided in the Financial Reports of
companies with whom they are negotiating. They also benefit from awareness
of the companies’ budgets and strategic plans.
Analysis of financial information can be useful in providing information on
the company’s history and its present status, but will not necessarily point
accurately to its future performance.
The profitability, liquidity, leverage and activity ratios shown in Table 1
are useful in examining the performance of a company. The ratios are best
applied to a manufacturing plant but some have relevance to other business
Such information, along with intelligence provided by the workforce on
recruitments, expansions, purchases, investments and other details can
assist in the type of settlements one can realistically expect from an
enterprise based on its capacity to pay.
Another aspect of preparation for the negotiations relates to physical
arrangements including ensuring that meeting rooms are adequate, with room
for the occasional caucus, and that seating arrangements are adequate.
Negotiators are expected to argue effectively in support of their
submissions. Negotiations are not discussions, and they are not
consultations. They are about persuasive arguments that can win over a case.
Negotiators are expected to argue rationally, reasonably, and to use
reliable information in support of a claim. Negotiators use a blend of
logic, emotional appeals,
Table 1. How to Calculate Profitability, Liquidity, Leverage and Activity
|Net profit margin
||Profits after taxes / Sales
||After tax profits per dollar
|Returns on total assets
||Profits after taxes / Total
||Returns on Total Investment
||Current Assets /Current
||Cash coverage of short-term
||Coverage of short term
without selling inventory
|Debts to Assets
||Total Debt / Total Assets
||Use of borrowed ratio
funds for financing
|Debt to Equity ratio
||Total Debt / Total
|| Funds created by owners
to handle debt
||Sales / Inventory of Finished Goods
||Is inventory over or under stocked?
|Average Collection Period
||(Accounts Receivable / Total Sales) *365
||Time after making a sale to
receive a payment
persuasion, humour, analogies and pleadings in furtherance of their
claims. Argument can become heated, and may even become acrimonious and
hostile. This is usually a clear sign of the need for a break or for
Negotiating is interactive and dynamic. Active listening is a skill
which has to be developed. Also, negotiators have to be able to ask
questions to elicit useful responses. Negotiators send signals through
words, some plain and easily apprehended, others are more obtuse.
Negotiators also send signals through body language. For those who are adept
at receiving signals, the process of moving negotiations onward becomes less
onerous. It is through signals that a negotiator begins to perceive:
- proposals that will meet with little resistance;
- those that can be accepted with some modification; and
- those that have low chances of success in the current round of
Armed with the reading of signals, a negotiator will then know which
proposals can be prioritized with almost certain chances of success.
The negotiator may then decide to package proposals, making concessions
and linking strong winners with others with less chances of success. A total
package proposal is placed on the table with an agreement of all elements
crucial for settlement.
At this stage, it is likely that both sides will be proposing packages,
each with a core that signifies ‘the irreducible’ that is required by each
for settlement. At this stage, negotiators might be suggesting that their
proposals are the ‘last, last’ that they will be making.
At this stage, each negotiator is searching for an advantage, while helping
the opponent to feel a winner. It is often wise to break out of formal
negotiations and engage in creative scenario building on a menu of options
that may provide a settlement. Negotiators talk about taking “pens off the
table”, instructing the takers of minutes not be record the creative
exercise in problem-solving. In case the creative efforts fail, the
negotiators can return to formal discussions at the level of their last
formal submissions. Bargaining in earnest can be a painstaking and lengthy
exercise with all of the features of an Olympic exercise between formidable
Expert negotiators develop a sense of when it is best to close
negotiations. Closing too early or too late can lead to the loss of the
strategic moment when greatest success can be reached. In assessing the best
time to close, consideration must be given to issues such as the mood of the
workers and the prevailing economic climate.
At the end of the bargaining session, negotiators should be able to walk
back over the negotiations and summarize all of the positions. They should
note the agreements reached, issues that are withdrawn and others that are
Ambiguities should be cleared up and joint language discussed.
The final stage in the formal negotiation process is reached when the
draft agreement has been vetted, and has been produced in a formal form by
Discussions are then held about issues such as the starting date for the
payment of new salaries/wages; issues related to retroactive pay, where
relevant; the timing of the introduction of new benefits; and indeed, areas
of housekeeping and tidying up the business of the table. The discussions
are then closed with appropriate addresses, bringing a civilized end
to a round of negotiations.
Communicating with the union membership
Mention has already been made of the fact that negotiation leaders must
always keep their principals informed and seek their support in reaching
acceptable settlements. To this end, they should hold a general meeting to
get workers to vote for the settlement they propose to close on.
A negotiator can receive a shock if his tentative agreement at the table is
met by a refusal from his principals, and this can happen if they have not
been included throughout the various stages of the process.
Meetings, circulation of minutes and the use of position summaries can all
help to ensure the smooth process of collective bargaining.
A skilled negotiator has little difficulty in having a vote at the end of
the negotiation process and getting majority support for his agreement. He
should not however, be unduly concerned if support is not unanimous. He
should be wary, nevertheless, if there is resistance from a substantial
minority of his principals.
Breakdown in Collective Bargaining
Trade unions have traditionally recognized the value and importance of
industrial action when there is a failure to reach agreement through the
established procedures. Industrial action can take many forms:
- go slow
In some countries the strike is highly regulated through statutory
In most countries Essential Services are clearly defined and industrial
action in these areas is circumscribed.
- Why would trade unions prefer voluntaristic, rather than regulated
- Is a skilled negotiator born, or can he/she be trained?
- Suggest reasons why negotiations breakdown.
- Should trade union negotiators be considered as ‘experts’?
- Discuss the sick-out as a form of industrial action.
- What are the essential services in your country?
- Under what circumstances can industrial action be legally conducted in
- Can industrial action take place in the essential services in your