Text 3 Collective Bargaining

In some industries, rates of pay are decided nationally by collective bargaining between employers and trade unions. The employers are represented by their trade associations and the trade unions by representatives 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 conditions 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. For example, managers and unions might agree to give a cost-of-living allowance of £1,500 a year to .3 office staff as the factory is in Greater London, where homes and other things cost more. 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 bargaining. 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 employment with their employers. The Trade Union Reform and Employment Rights Act of 1993 encouraged the change by allowing employers to offer pay rises or other inducements to employees who opted out of collective 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 depart­ments and agencies became responsible for their own pay negotiations 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 strengthens the union if no other union is allowed to join in the talks.

• Single-status employment. The tradi­tional differences between managers 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-operation between all grades of employees.

• No-strike agreements. The union agrees not to strike. Both management and union agree to accept the

decision of an arbitrator, or independent judge, in any dispute. Pendulum arbitration is often used.

In pendulum arbitration, the arbitrator makes a straight choice between the views of the management and the union. For example, if the manage­ment has offered a pay rise of £1 an hour and the union wants £2 an hour, the arbitrator cannot say that the rise should be £1.50 or £1.75. He or she has to say 'yes' to either the managers or the unions: the pay rise has to be either £1 an hour or £2 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 forward 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 'European Committees', or works councils, should be set up in all multi­national 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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