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Collective Bargaining

Collective Bargaining Collective Bargaining: A Great Social Invention? = “There’s strength in numbers” This is a clich, or could even be called a proverb that most of us have heard at some stage in our lives. It also lies at the heart of collective bargaining, and it provides a reasonable, although simplistic reason for the use of collective bargaining, and also gives us an indication of where and for whom it is most useful. Collective bargaining’s origins lie in one of man’s primary instincts; defence. In an industrial relations context this is defence of proper working conditions, secure employment and proper pay. Collective bargaining allowed this by gaining pay increases through the increased power of the workers as a joint force.

In this context I see collective bargaining as more of an economic and political invention which has had an influence on the social aspects of employment and living. Because of this I would have to say that collective bargaining is not a great social invention simply because it was not a social invention. But it does have social benefits, by providing more economic stability for those who partake in it among other things which I will discuss in this essay. Collective bargaining also has its disadvantages which I will also discuss. These advantages and disadvantages fall on both sides of the collective bargaining fence; the employees and employers. But what exactly is collective bargaining? The answer to that depends on ones viewpoint. What are the social benefits of collective bargaining? And who do these benefits affect? These are but a few of the questions I intend to answer in the course of the next 2000 or so words.

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To put this essay in context I must say what I feel collective bargaining is and what its purposes are. I see collective bargaining, in its most basic form, as the process by which an organised group of employees, in the form of trade unions, negotiate with employers, their representatives or their associations in relation to any aspect of employment within the employers organisation. The reason that collective bargaining and trade unions are used is the reason cited in the first paragraph; “There’s strength in numbers”. The individual threat by a single employee to withhold labour is not very great. But when the majority of a workforce in an organisation threaten to strike, or threaten any other form of industrial action this threat becomes altogether more substantial.

Collective bargaining gives redress to the imbalance of power between individual workers and employers (Gunnigle et al, 1995). This is the main purpose that collective bargaining is used in industrial relations, and essentially gives collective bargaining a political purpose; the equalisation of power. Once this extra power is attained, collective bargaining is then used for primarily economic purposes. It is only in recent times that social issues have been included in the negotiations in collective bargaining. As this process tends to lead to equal pay for all workers doing the same work, there is as a consequence a social benefit; equality amongst the workforce. While this can have its downside, namely complacency among the employees as there is little incentive to do better in work, this disadvantage has been partly eroded in recent times with the advent of productivity deals, which I will discuss in more detail later in this essay.

Collective bargaining is also a political institution in that it regulates and defines the interaction between trade unions and management. In a social context, the consequences of this is a system for regulating industrial conflict. This can help ensure that any industrial conflict is kept within reasonable bounds, and that in most cases the more militant elements in trade unions are kept under control by virtue of the fact that the majority of the workforce see an alternative avenue of dealing with disputes. I believe that this consequence of collective bargaining contradicts the optimistic Marxist view that trade unions and collective bargaining are a school for socialism and a potential revolutionary force. It does confirm the pessimistic view that it ensures that trade unions will never be any more than trade unions, and that collective bargaining oils the wheels of capitalism.

But that’s not a bad thing at all, and is one of the great social benefits of collective bargaining. So how exactly does collective bargaining oil the wheels of capitalism? Collective bargaining provides management with a method for dealing with employees in an equitable way. But not only equitable, but also seen to be equitable. If areas of common interest are maximised, and stressed in the collective bargaining process, this can reinforce a an acceptance of common interest by the workforce (Purcell, 1979). The process of collective bargaining also legitimises trade unions within the company or employing organisation.

Purcell also contends that this legitimacy can give trade union members a sense of belonging to the organisation (1979). These three things; the sense of equality, common interest and belonging will make workers more content, minimise conflict and create a feeling of stability within the company. Collective bargaining, when agreements that come from it are for set time periods, can allow management to plan for the future based on those agreements and the knowledge that the unions are likely to cooperate. All of the above oil the wheels of a capitalist society. And as I both live in and believe in a largely capitalist society, this has to be a good social influence. Collective bargaining also has its disadvantages as far as capitalism is concerned.

In cases where radicals have managed to hijack the union’s side of collective bargaining then unreasonable demands can lead to severe conflict. The same can be said of the employer side. Inflexible and uncompromising employers can cause severe disharmony, and possibly cause irreversible damage to the employee-employer relationship. But this will only occur in a minority of situations. The greatest disadvantages of collective bargaining in a capitalist society lie mainly in the financial arena.

Collective bargaining in the form of wage rounds leads to both wage and grade drift. Wage drift leads to higher wage costs for employers and higher inflation within the economy, which in turn leads to higher interest rates and lower investment. Lower investment means that fewer jobs are created, unemployment rises, social welfare payments increase and possibly an increase in the national debt. Following these consequences there would be less money in the economy overall in real terms. Grade drift is a problem for employers which is linked to wage drift.

Grade drift occurs where secure jobs are one of the trade unions aims in collective bargaining. As jobs become more automated with the advance of technology, employers are forced to keep staff to keep to previous agreements. As companies no longer need as many staff the workforce tends to get older, with rising wage costs and mainly static skill levels. In Ireland over the last 25 years, the focus of collective bargaining has been widened to a nation-wide one from localised and industry level, with various degrees of success. This focus on the nation-wide picture has led to 7 national wage agreements, 2 national understandings, and three other agreements or programmes; the Programme for National Recovery (PNR), The Programme for Economic and Social Progress and the Programme for Competitiveness and Work.

It is my opinion that centralised collective bargaining has evolved in much the same manner as collective bargaining itself; focusing on purely economic issues, and then steadily including more social issues. While the national wage agreement secured certain pay increases, the re …


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