Structure and process of collective bargaining agreements

Table of content

Background information…………………………………………………..3

Introduction………………………………………………………………..3

Literature review…………………………………………………………..4

Collective bargaining process……………………………………………..5

Preparing for bargaining…………………………………………..5

Bargaining style……………………………………………………6

Negotiation kick off……………………………………………….6

Tentative agreement……………………………………………….7

Contract ratification……………………………………………….9

Structure of collective bargaining…………………………………………9

Economic framework…………………………………………….12

Single union framework………………………………………….13

Corporate wide……………………………………………………13

Area wide agreement……………………………………………..14

Pattern bargaining…………………………………………………14

Coordinated bargaining……………………………………………14

Coalition bargaining………………………………………………15

Conclusion…………………………………………………………………15

Reference………………………………………………………………….16

Background information

In the 1960’s, advocacy groups supporting the public sector propagated for a union representative of the public sector employees. The union could legally engage in collective bargaining both in the federal and state level. The “executive order 10988” that provided bargaining rights on a limited scope of issues for federal employees was signed by president John Kennedy in 1962. By 1975, various states had adopted similar laws on collective bargaining over various occupational groups in their government.

In the late 1960’s, teachers began organizing themselves into unions that bargained for fair employee treatment, employment contracts, job security and addressed the issues of abuse. The unions lobbiedfor pay rise and benefits or otherwise address the profound misconducts of the administration such as sexual harassment and mistreatments. To this date, collective bargain agreements have changed into playing a much more significant role. The mandated body now addresses vital issues such as teacher participatory rights over curriculum decisions, teacher per students’ ratio, teacher’s professional development requirements and work-evaluation procedures. With these changes, teachers are now able to directly participate in the policy making process.

Introduction

Collective bargaining is a negotiating process by both the management and labor unions to reach an agreement over various work-related interests. Collective bargaining agreements are therefore legally binding contracts that regulate the employment relationships between union members and schools. Despite the involvement of the federal government in labor agreements, it, through the national labor regulation acts protects and govern only the unions in the private sector, not in the public sector. However, public employees have been granted the rights by their respective state laws to bargain collectively. Since public teachers are employed by their states, they are subjects of state laws that govern collective bargaining agreements. Collective bargain agreements are not influenced by a formal legal system as the laws vary from state to state. Depending on the goals and objectives of the state or political influence, collective bargaining agreement rights are either limited or enhanced by the state officers. Teachers union hold a precarious position in school performance. It is therefore prudent to consider the both the process and structure of collective bargain agreement.

Literature review

Collective bargaining permits workers to achieve a form of workplace democracy and to ensure the rule of law in the workplace (health services and reports, 2007).

The public sector union growth was supported by three theoretical arguments. One of the argument was founded on the inelastic demand for public sector workers. The inelastic demand of public workers resulted from the inability of public employers to shift their activities to other areas or shut down. Therefore, the public sector union would exploit this source of power and wages would inevitably be pushed up beyond those available to private sector workers (Marshall, 1920)

The second argument reflected how collective bargaining worked in the private sector. The private sector was much crippled by strikes which threatened the public sector. According to Taylor, strikes by the public sector employees would not only inappropriate challenge the democratic government, they could also disrupt the flow of essential services and thereby threated public health and safety (Taylor, 1967). Yet the alternatives to strikes-arbitration or bargaining without some final resolution mechanism-would risk overdependence on third parties in shaping the process and outcomes of bargaining (Wirtz, 1963; Northrup, 1966)

The third argument was based on politics where collective bargaining was compatible with the democratic government. Collective bargaining gave unions’ special access to influence decisions of elected leaders some of whom unions helped put in office through their electoral support (wellington and winter, 1971; downs, 1957).

Since 1970, there has been a significant relative compression of the wage distribution in the public sector (Borjas 2002). It has also been known that the public sector earnings show less dispersion than the private sector earnings (Fogel and Lewin 1974). Individual earnings differentials apparently favored public sector employees at the bottom of the earning distribution and private employees at the top of the distribution (bellman and Heywood 2005)

Collective bargaining process

The legal changes in collective bargaining agreements prompted research on its process and structure.This is a process where teachers unions and employer representatives mutually solve concerning issues to reach an agreement, which is written and legally binding. In public education, the collective bargaining process unfolds in systematic procedures.

Preparing for bargaining

This is the first step where both sides, the teacher’s union and representatives of the employers form bargaining teams. The employer representative team, mandated by the employer conducts a survey of the most concerning issues and prioritize them before meeting the union members. As outlined by the union constitution, the union panel also conducts a similar survey of burning issues that are to be settled. Through the union, teachers jointly decide on priorities for bargaining that would later be presented to the management team. Given the bargaining agreements from each side, both teams assess and critically analyze the tabled offers with a clear reflection of interests to consider. A critical interest assessment is done by both teams. Incase of unsatisfactory remarks on either sides, additional changes are made to factor in the concerns if need be.

Bargaining style

In this second step of negotiations, ground rules that are aimed at guiding the negotiations are set.Confidentiality of aspects, secrecy of sessions and frequency of negotiations are also discussed and set.The two parties come to a consensus on what bargaining style is to be used. The two main or common bargaining styles that are likely to pop up, most often are the interest-based bargaining or proposal bargaining style. Regarding the conflict, the most effective bargaining style is selected.

Proposal bargaining style: In the proposal bargaining style, drafts of well written proposals are submitted to the opposite panel. The drafts are then discussed to make adjustments until an agreement is reached.

Interest-based bargaining style: The interest-based bargaining style involves identification of important issues and discussions. An evaluation test on the most significant issues is done and options to resolve them are presented by both parties with all interests factored in. Evaluation procedures of all options are agreed upon a standard scale. Both the teachers union and employer’s representative discuss the given options until an agreement is reached. Once each side is satisfied through a reached agreement, the contract agreement which will be legally binding is drafted.

Negotiation kick-off

In this round of dispute resolution, once the bargaining style has been selected, the two sides agree on ground rules and specify their venue of discussion. After all these precedence has been completed, negotiations will start. In this round, the laws of the state would come into play. The state law compels employers and public officials to bargain with unions regardless of the sensitivity of the proposals or whether their proposals are in the interest of the public. The state law also determining the compulsory subjects of bargaining, prohibiting and permitting some of the provisions.A series of closed-door discussions is done with both representatives negotiating agreements. The agreements would include favorable working conditions of teachers and other support factors that are necessary for effective operations, mostly, social issues like health coverage, wage increase or even work hours. The negotiations are secret to the public and other non-union members. The discrete session is not subjected to the state’s freedom of information act. Once an agreement is reached, that’s when the contents of their agreement will be released for approval.

Reaching a tentative agreement

Once the two teams are satisfied, a tentative agreement is reached. The agreement is presented to the union members by the union team and to the employer’s governing body by its representative for approval. Once it is approved, it will move to the next stage of processing. The two teams may also fail to agree if all their interests are not factored. Once this occurs, they can pursue options set out by the state law regarding a settlement. Depending on the state law, the option may include fact finding, mediation, interest arbitration or possibly, a strike.

Interest arbitration: A neutral arbitratorsummons both parties at the negotiation table, the arbitrator conducts a formal hearing of their grievances, the third party evaluates the information presented to him by the two teams and after considering both interests, he makes a decision that is binding. Olson’s (1988) review of the accumulated evidence in public sector strikes concluded that interest arbitration provided the most effective deterrence of strikes (Olson 1988).

Mediation: A neutral professional mediator, on the basis of good faith is selected to help facilitate some result-oriented dialogue between the two teams to help them resolve their issues and reach an agreement. The mediation process is remarkably effective in agreement reaching particularly in the public education sector.

Fact finding: A third party listens to the two teams and makes recommendations which the teams can either accept or reject. In the case of wage dispute, the neutral party would compare the wages and employment terms relative to the cost of living or other social and economic factors in shaping the agreements.

Strike: The union can decide to engage in a much assertive action where the union members withhold their services or engage in stoppages until a resolution is reached. According to Sylvester petro, collective bargaining unsupported by the strike is a sham institution; government whose employees may strike is no less a sham (Sylvester, 2010). However, In spite of the settlements that are likely to result from a strike, there is fear of disastrous consequences as in case of such an unfortunate event, the political direction to the state is disrupted as focus is directed towards resolution search and restoration of the public service.

Ratifying the contract

Once a tentative contract agreement is reached, a proposal review with respective groups is done. The proposal review is done in a ratification meeting where other union members are allowed to question the agreement and its provisions or offer opinions on unsatisfactory clauses. Using secret balloting, the union members then vote for the agreement. If a majority of the voters support the contract, it is ratified and if not, the tentative agreement is rejected. On the other hand, the employer representative would seek a general approval from the board. Once the tentative agreement has received a vote of confidence from both sides, it becomes a new agreement. If it is not ratified by both parties, the tentative agreement is again taken to the bargaining table for another round of negotiations until a new tentative agreement is structured and presented back to the union members for a vote.

Clarifying or changing the contract

During the term of the contract, revision on the ratified contract can occur. Both teams meet regularly over talks of mutual concerns. A memoranda of understanding can be created over the life of the successor contract. The MOU gives parties the opportunity to settle minor issues and reach temporary agreements.

Structure of collective bargaining

It is necessary to distinguish the means of collective bargaining before examining the structure of collective bargaining in the US. Workers use different means in determining their work conditions, wages and benefits. Collective bargaining unions can either apply political or economic bargaining means. Political unions exercise power on their employers through political actions and processes. Economic unions on the other hand, aim at improving the workers’ conditions through economic process by interacting directly with the employers. Even though most labor unions in the US are economic unions, they have noteworthy political agendas. Nonetheless, efforts to create political movements for employees in the country have failed.

The predominant workers’ union in the US were temporary unions. There were no organizational structure in solving labor disputes. Workers just united to oppose wage cuts and fight for wage increase. Efforts to create permanent labor unions were unsuccessful since the permanent unions created were short lived. Economic cycles hugely affected the labor unions. According to Blanke, Blanpain& Rose (2005)during economic booms and prosperity, workers formed strong unions with strong structures and bargaining power. However,there were numerous destruction of workers’ unions during recessions and panics thus counterbalancing the gains made during economic prosperity. During recession, workers resorted to political unions as opposed to economic unions. Unlike in other countries, efforts to create simultaneously permanent economic and political unions have failed to achieve lasting success in the US(Spineux, 2001).

Another major issue in evaluating the structure of workers’ unions are the beneficiaries of collective bargaining. The intended goal of collective union is critical in classifying collective unions. Under this criterion, labor unions can be either job or class conscious. Job conscious unions are those that aim to advance work security and economic benefits of a certain group of workers. Class-conscious unions in contrast tend to advance working and production class interests of a particular workers’ group. In recent times, workers unions have emerged which are neither class nor job conscious. An example include religious workers unions whose structural models depend on social relations instead of class or job interests. Although most workers unions in the US are job conscious, advancing workers’ benefits and security has not been their dominant goal.

Modern unions vary in determining which workers and jobs to include while developing job conscious bargaining strategies. This is in contrast with class-minded unions that tend to be general and all-inclusive organizations. There have been different conceptualizations of working and class interests among class-minded workers unions. Issues such as skill and occupational differences are not of importance in the class conscious organizations. However, clear distinction emerges between craft and industrial worker unions.Hayter (2011) states that craft-workers union tend to advance the welfare of workers with same skills regardless of the identity of their employers. Industrial workers union organize workers engaged in specific industries that produces similar goods and services irrespective of their individual skills and occupations. Workers unions in the education sector are both industrial and craft unions. ‘The National Tertiary Education Union’ (NTEU) is an example of an industrial union in the education sector. This union represents the interests of teachers in the public education sector irrespective of their skill sets. Craft unions are those that represent teachers in specific levels of education for instance college, high school or kindergarten teachers. A majority of present unions in the US began as either craft or industrial unions but later on developed into multi-craft and industry organizations.

Perhaps the most important issue in analysis the organizational structure of unions is the ultimate objective of the unions(Blanpain & Ameglio, 2004). Workers union may exist because of either pragmatic or philosophical reasons. Unions may choose to accept the current economic structure and work within these current structures to achieve favorable working conditions and employment conditions. Alternatively, unions may seek to change current economic systems and replace it with other systems. The first strategy is the pure or business unionism and is the underlying ideology of most unions in the education sector and in other sectors of the economy. A variety of other union ideologies has existed apart from the pragmatic and revolutionary ideologies in the US. Some unions practiced socialist, collectivist and uplift ideologies though with limited success(Blanke, Blanpain, & Rose, 2005).

Economic framework of collective bargaining

The structure of collective bargaining dominant in the education sector relies on the economic power of the employers and unions to determine wages, work hours and other employment conditions as specified in bargaining agreements. The ‘National Labor and Relations Act’ regulates the bargaining process and structure. However, the market forces and unions’ economic powers determine the content of employees’ contracts. Although the number of workers registered in the unions is steadily declining in the US, collective bargaining is still the main method used to determine employees working conditions and benefits for millions of workers in the education sector and other economic sectors.

The success of the workers union depend on two underlying factors. One factor is the employers’ ability to meet the wage demands of the unions. The second critical factor is the ability of the unions to make the employers pay their wage and benefits demands. In other words, the ability of the unions to direct their resources towards obtaining higher and better wages and benefits. Absence of any of these factors hampers the ability of collective bargaining to result to substantial results(Hayter, 2011).

An appropriate bargaining structure will enable the unions to eradicate wage competition within the unions. This requires transferring some degree of power to the weak local unions in order to assure them that the strong unions do not undermine them. The following are the common bargaining structures in the education sector in the US:

Single union agreements

This involves a local union bargaining directly with a single employer. This leads to bargaining agreement covering a single production facility. This bargaining structure is very common in the education sector where a local union reaches an agreement to improve teachers’ working conditions in a particular school. In this bargaining structure, the need to follow the pattern set within the industry guides the local union in the bargaining position.

Corporate-wide agreements

According to Spineux (2001), this entails a nationwide union negotiating a principal contract covering all plants in the industry. In this case, the local unions’ agreements involve supplementing the national agreement but not negotiating alternative contracts to the national one. A good example is the NTEU that negotiates on the national front on behalf of all workers in the education sector across the country. Another example involves the UAW negotiating with the three US giant automobile manufacturers.

Area-wide agreements

This is common with craft unions where these unions negotiate an agreement on behalf of employees of a particular skill set in a native labor market. This bargaining structure depends on the geographical regions. The craft unions may represent workers of a particular ward, council or state. This structure is common in the education sector where the local unions represent the interests of teachers and other education workers in their geographical locations.

Pattern bargaining

In collective bargaining, broader collective bargaining patterns tend to influence specific contracts negotiated by local unions. The terms of specific contracts always follow the conditions set by national and corporate- wide bargaining agreements. For example, agreements between the state governments and the NTEU are not only corporate agreements but also a pattern in the education sector. As a result, local unions must negotiate in ways consistent with the education sector pattern.

Coordinated bargaining

According to Blanpain & Ameglio (2004), this is common where astate government bargains with different unions. In this case, unions may desire to maintain a consistent bargaining pattern and order. To achieve this, the unions would exchange information, develop coordinated strategies as well as agree on expiration dates of the contracts. The Industrial Union collects data in order to assist these unions to establish consistent and coordinated bargaining pattern especially when dealing with the various state governments across the country.

Coalition bargaining

This involves more than one union representing different sections of workers to one corporate organization or government. Under such circumstances, it is desirable for the unions to sit together with the employer in the separate negotiations. The unions can do this by sending their representatives in these negotiations.

Hayter (2011) state that established bargaining structures may become a problem to the unions because of the rapidly changing corporate structures. Bargaining structures may not change as rapidly as the corporate structures thereby posing a huge challenge to collective bargaining. It is therefore critical to bargaining structures to remain flexible to respond to changes in corporate structures. Corporate mergers, change of investments plans as well as corporate diversification are common in the current business world and therefore flexible bargaining structures would easily respond to these changes.

Conclusion

After a considerable process and structure of the collective bargaining agreement, the ideology of trust is reached to help reach a consensus on both parties. Regarding the dispute resolution process, I can conclude that the process has produced remarkable positive results towards the reduction of teacher strikes and compensation pleas. With this regard, the American educational system has been stabilized resulting to excellence in school performance in the public sector. However, concerns over the settlement timeframes cannot be ignored. A lot of time is wasted over dispute resolution. Time frames and limits have to be set to help mitigate the loss.

References

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Blanpain, R., Ameglio, E. J., &World Congress of Labor Law and Social Security. (2004). The actors of collective bargaining: A world report: XVII World congress of labor law and social security, Montevideo, September 2003. The Hague: Kluwer Law International.

Borjas, George J. (2002). “The Wage Structure and the Sorting of Workers into the Public Sector.” NBER Working Paper Series. Working Paper 9313, October.

Fogel, Walter and David Lewin. (1974). “Wage Determination in the Public Sector,” Industrial and Labor Relations Review 27 (3): 410-431.

Hayter, S. (2011). The Role of Collective Bargaining in the Global Economy: Negotiating for Social Justice. Cheltenham: Edward Elgar Pub.

Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2 S.C.R. 391 (2007).

Marshall, Alfred. (1920). Principles of Economics, 8th Ed. New York: Macmillan, 1920.

Spineux, A. (2001). Employment: The focus of collective bargaining in Europe: themes, procedures and issues. Louvain-la-Neuve: UCL Presses Universities de Louvain.

Taylor, George W. (1967). “Public Employment: Strikes or Procedures,” Industrial and Labor Relations Review, 20 (4): 617-636.

Wellington, Harry H. and Ralph K. Winter, Jr. (1971). The Unions and the Cities. Washington, D.C.: The Brookings Institution.

Wirtz, Willard, (1963). “Address before the National Academy of Arbitrators,” Daily Labor Report, 23, F1-F4.