ABSTRACT
Industrial relations are inherently a bipartite relationship between union and management, representing workers and the employer. Similar to other relationship, the union management relationship is also highly fragile and complex. Collective bargaining typically refers to the negotiation, administration and interpretation of a written agreement between two parties that covers a specific period of time. this agreement or contract lay out in a specific terms the condition of employment, puts some limits on employees and sets limits on managements authority. ILO has defined collective bargaining as negotiations about working conditions and terms of employment between an employer, a group of employers or one or more employees organization on the other with a view to reaching agreement where in the terms of an agreement serve as a pc defining the rights and obligations each party in their – employment relates with one another, it fixes a large number of detailed conditions of employment and during its validity more of the matters it deals with can in normal circumstances give grounds for dispute concerning an individual worker”. The unpalatable side of industrial relations and one which the public often associates unions is the strike. The strike indicates a break down of cordial relationships between labor and management and is usually the most negative commentary. To achieve this, case study approach was adopted and subsequently, questionnaire and personal interview methods were accepted as an important instrument to dispute resolution. Also we found out that dispute is both functional and dysfunctional and that the effect of it is born by the individual organization and the economy. The concept of management labor relations has attracted attention from academicians and practicing managers during the past decades. The economic interest of the union is matched by the sensitivity of the employer to market considerations particularly in situations where competition is very keen. Employers in this position are more likely to consolidate into one bargaining entity. In any event that each party has a defined interest in variable economic factors sets the basis for conflict with respect to wages and salaries. It is important to note that in resolving the conflicting economic interests of the union and management of the agreement that emerges is somewhere within the original offer by management and the original demand by the union. The interest and the formation of bargaining structure outlined in this project have been influenced by such factors as the economic and organizational environment, in the private sector thereby leaving room for further research especially in the public sector and or other tertiary institutions.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The encyclopedia of social sciences defines collective bargaining as a “process of discussion and negotiation between two parties, one or both of whom is a group of k6*s acting in concert. The resulting bargain is an understanding as to terms or conditions under which a continuing service is to be performed. More especially, collective bargaining is the procedure by which an employer or employers and a group of employees agree upon the conditions of work”. The Webb described collective bargaining as an economic institution, with trade unionism acting as a labor cartel by controlling entry into the trade. Professor Allan Flander argues that collective bargaining is primarily a political rather than an economic process. It is power relationship between a trade union organization and the management organization. The agreement arrived at is a compromise settlement of power conflicts. According to Harbinson, collective bargaining is “a process of accommodation between two institutions which have both common and conflict interests”.
The process is “collective” because representatives of employees in groups rather as individuals solve issues relating to terms and conditions of employment The term” bargaining “refers to evolving an agreement using methods like
negotiations, discussions, exchange of facts and ideas, rather than confrontation. The process of collective bargaining is bipartite in nature, I .e. the negotiations are between the employers and the employees, without a third party intervention. Divergent view points are put forth by the parties concerned, and through negotiations, a settlement is reached. The objective is to arrive in agreement. Collective bargaining serves as a number of important functions.
It is a rule making or legislative process in the sense that it formulates terms and conditions under which labor and management may cooperate and work together over a certain stated period, It is also a judicial process for every collective agreement there is a provision or clause regarding the interpretation of the agreement and how many difference of opinion about the intention or scope of a particular clause is to be resolved, it is also an executive process for both management and union undertake to implement the agreement signed.
Salient features of collective barraging are:
1. It is a “group” process wherein one group represents the employers and the other represents employees. They sit together to negotiate terms of employment.
2. The collective bargaining process follows a number of steps. It begins with the presentation of the chapter of demands and the reaching of an agreement.
3. Negotiations form an important aspect of the process of collective bargaining deliberations rather than confrontation.
4. It is a bipartite process involving the employers and the employees.
The ILO convention No. 98 (1949) relating to the right organize and to bargain collectively describes collective bargaining as:
“Voluntary negotiation between employers and employers” organizations and workers organizations, with a view to the regulation of terms and conditions of employment by collective agreements”.
There are several essential features of collective bargaining, all of which cannot reflect in a single definition or description. They are as follows:
i. It is not equivalent to collective agreements because collective bargaining refers to the process or means, and collective agreements to the possible result, of
bargaining. There may therefore be collective bargaining without a collective agreement.
ii. It is a method used by trade unions to improve the terms and conditions of employment of their members, often on the basis of equalizing them across industries.
iii. It is a method that restores the unequal bargaining position as between employer employee.
iv. Where it leads to an agreement it modifies, rather than replaces, the individual contract of employment, because it does not create the employer-employee relationship.
v. The process is bipartite, but in some developing countries the state plays a role in the form of a conciliator where disagreements occur, or may intervene more directly (e.g., by setting wage guidelines) where collective bargaining impinges on government policy.
vi. Employers have in the past used collective bargaining to reduce competitive edge based on labor costs.
There has been wide spread belief within the industrial circle that prior to 1968, industrial relation policy in Nigerian had the unique characteristics of volunteerism. This rather amorphous concept describes a policy by which the government plays the primary role of prescribing minimum
standards of practices, while leaving day by day practices to both sides of industry. This view is correct only if the only yard- stick for regulating labour laws of the period is regarded as the only yard-stick for regulating labour management relations. But there is overwhelming evidence of a substantial state invention and control in the actual practice of labour-management relations, both during and after the colonial period and much of that amended from outside the legal framework.
In 1968, the civil war has started and the government was resolved to prevent labour unions from any distraction capable of undermining the task of the military government to maintain the unity of the country. Subsequent policies, starting with Trade Disputes (Emergency provisions) decree of that year, marked the end of voluntarism and the beginning of state limited intervention relations. This new policy officially referred to as limited intervention and guided democracy has had profound consequences on the state of labour-management relations. This new policy by and large had produced contradictory results which are advantageous and disadvantageous to the union and management with government introduction of restrictive legislation, such as the Trade Dispute (Essential Services) Decree of 1976 which
outlawed the strike, raising questions about the purposeful role of government. The unions on the other hand have violated the non-strike injunction, thus exposing the impotence of the policy. This is a clear manifest that unresolved problems abound.
As mentioned by Elanders (1958) whether Trade Union structure is under debate or the organization of employers association, or the prospect of an income policy, or the frequency of unofficial strikes, or the relaxing of restrictive practices or failure of joint consultation to realize the earlier hope that were placed in it, no one is any longer disputing that pressing largely unresolved problems abound:-
It is these desires of the parties that are more or less unlimited, inspite of the wish to co-exist that gives rise to in Damachi’s words latent antagonism within themselves.
But as pointed out by kilby (1973) despite the careful constructed institutional framework and avoided commitment of all parties concerned, voluntary collective bargaining has failed to function as a significant mechanism for fixing wages. But in Nigeria private sector skill claims that they operate collective bargaining, but what makes Kilby’s argument valid, is that because the Nigerian management negotiate on a much stronger power position than the union the agreement from
such negotiation tend in effect to be largely dictated by management rather than being a product of bargain.
The role of the state in industrial relating in this respect becomes very important not so much because government policy had produced contradictory results and consequences but primarily because it expresses the value and priorities in the industrial relation system.
What Is Collective Bargaining?
Collective bargaining has been defined as the process by which the antithetical interest of supply and demand or buyers and sellers, are fully adjusted so to end in the act of exchange, Flanders (1970).
The whole idea of collective bargaining was the work of the Webb. i.e. Sydney and Beatrice Webbs (1920). They argued that collective bargaining is an economic activity where workers offer their services for sale to their employer. To the Webbs, collective bargaining satisfied the macro-economic functions of demand and supply. They also implied in their work that collective bargaining is the equivalent of individual bargaining.
Flanders (1970) saw the works of the Webbs as a kind of economic recipe. He did not disagree completely with the Webbs in the importance of economic factors in the bargaining process, is the fact that bargaining process is a rule making process and also involves power relationship between the employers and employees. This aspect according to Flanders is the most important aspect of the bargaining process.
In my own summation, when two or more individual grounds or organizations experience a conflicts of interest; and when they wish to resolve their difference because it would be mutually beneficial to do so. They decide to bargain, such parties come to the bargaining table with a certain power-base with the wherewithal to concede or refuse conditions desired by the opponent, whether the conflicting parties are nations, corporation or unions.
Collective bargaining could therefore be said to be a process of social interaction which each party uses various tactics to accomplish its goal, to manipulate the other party in the desired direction. These tactics may include bluffing, argumentation, concession, threats strikes etc.
1.2 OBJECTIVES OF THE STUDY
In Nigeria today, the rate at which trade disputes occur, is so alarming. Though no precise figure exist as to provide an actual and certain grand total of loses sustained annually by the workers, the industry and nation. Almost all the workers in electricity, water and gas service sector of the economy were on strike at one time or the other in 1982 and 1993 courtesy of PENGAASSAN. As stated earlier, this is not an encouraging picture.
The conclusion that one is led to draw is multi- dimensional. That the collective barging process is ineffective and required re-organization to meet the pressure and demands of modern industry and finally that the arbitration machinery needs an overhaul from lethargy and re-ordering of its methodology to assume its operation as part of and within the collective bargaining process.
Thus it is necessary to examine critically the following:
1. What collective bargaining is really about and some of its relevant theories.
2. The processes of collective bargaining and some labour policies of government, both past and present.
3. The consequences of the negotiation. (a) Agreement
(b) Trade Dispute
4. The causes and effect of Trade Dispute.
This is because the objective of collective bargaining is to agree upon a contract acceptable to union representatives, union members and management. The bargaining agreement reflects the problem of the particular workplace and industry in which the agreement is negotiated. The agreement may have no bearing on another. This is widely reflected in the demands unions place on management and in the subject and terms of the agreement finally negotiated. Leaving aside the specific issues contained in various contracts, four issues that commonly appear in all labour contracts include wages, hours of work. Terms and conditions of employment and the grievance procedure.
There are three procedural and practice, they are:
1. Contents of procedural agreements
Except for minor differences of detail, most procedural agreements have common characteristics. They stipulate subjects for negotiation or discussion at each level (i.e national, enterprise or branch) and the residual issues for individual enterprises or plants. In many of such agreements, as in the food industry, issues of
management prerogatives are defined. The agreements also define the bargaining unit in terms of which categories of employees are covered. The machinery for negotiation, commonly known as the National Joint Industrial Council (NJIC), its constitution and the mode of operation are embodied in the procedural agreement. They also specify the grievance procedure, both internal and external, and whether disputes are of the individual or collective nature. Inmost agreements, an undertaking is made that both sides will endeavour to resolve their grievances step by step under the internal procedure, failing which the provisions of the Trade Disputes Act will be followed.
2. Negotiable and non-negotiable issues
The procedural agreement, as noted, contains issues which are negotiable at industry, company and house or plant levels, as well as issues or discussion. Sometimes included are what may be referred to as management issues, which are not negotiable. Over the years, the number of issues on the negotiable list has increased. In the table below, the evolutionary growth of negotiable issues in the banking industry is presented.
In 1967 when the multi-employer bargaining structure was started, the number of negotiable and non- negotiable issues were about the same. Writing in the same year, M. 0. Abiodun listed 11 issues which were commonly negotiated in industry.
For analytical purposes, we can examine the nature of negotiable and non-negotiable issues in the procedural agreement under three distinct categories, viz:
(1) Mandatory or negotiable issues
(2) Voluntary or discussion issues, and(S) Managerial issues.
Evolution and growth of bargaining issues in the banking industry.
1967 Subjects for Negotiation | 1976 subjects | for | 1979 Subjects | for | ||
Negotiation | Negotiation | |||||
1. Salaries and wages | 1. Wages and Salaries | 1. Wages and Salaries | ||||
2. Hours of work | 2. Hours of Work | 2. Hours of Work | ||||
3. Overtime and Rates | 3. Overtime and Overtime Rates | 3. Overtime | and | |||
Overtime Rat | es | |||||
4. Annual Leave & Maternky | 4. Leave | & | Leave | 4. Leave | & | Leave |
Leave | Condition | Condition | ||||
5. Medical Scheme & Sickness | 5. Disciplinary Procedure | 5. Disciplinary Procedure | ||||
Benefits | ||||||
6. Principles of Termination of | 6. Princ | iples | of | 6. Princ | iples | of |
service and Redundancy | Redundancy | Redundancy | ||||
7. Uniforms and Protective | 7. Uniforms | and | 7. Uniforms | and | ||
Clothing | Protective Clothing | Protective Clothing | ||||
Subjects not for Negotiation | 8. Allowances | 8. Allowances | ||||
All Subjects listed above and in | 9. Pension & Gratuity | 9. Pension & Gratuity | ||||
Particular | ||||||
1. Welfare | 10. Thirteenth Month | 10. Thirteenth Month Annual Cash payment | ||||
Annual Cash payment | ||||||
2. Management Methods | 11. Sickness Benefits | 11. Sickness Benefits | ||||
3. Pensions, Provident | 12. Medical Scheme | 12. Medical Scheme | ||||
4. Conditions in Premises | 13. Principles of Loans (Vehicle and House) | 13. Principles of Loans | ||||
5. Nigerianisation, including | 14. Canteen Facilities | 14. Canteen Facilities | ||||
Education & Training | Luncheon Vouchers |
6. Discipline |
Source: Azuka O. Diali, Adapted from “Industrial Relations and Collective Bargaining in Banking and Financial Industries” Lagos, Nigeria Institute of Bankers’ lecture, March, 1985.
1979 Subjects for Negotiation | ||
S/N | Union’s List | Association’s List |
1 | Recognition & procedural matters | Same |
2 | Probationary period of Service | Same |
3 | Principles of Promotion/ Conversion | Same |
4 | Principles of Training | Same |
5 | Disciplinary Procedure | – |
6 | Principles of Redundancy | Same |
7 | Union Levies | Same |
8 | Professional Examinations | Same |
9 | Uniforms and Protective Clothing | – |
10 | Principles of Staff Loans Scheme | L/V or Canteen Facilities |
11 | Pensions & Gratuity Scheme | Same |
12 | Burial Facilities | Same |
13 | Profit Sharing Scheme | Same |
14 | Luncheon Vouchers* | Same |
15 | Salaries and Wages | Same |
16 | Hours of Work | Transfer of Union Officials |
17 | Overtime | Allowances: Leave, Transport, |
18 | Leave | Housing Acting, Inconvenience, |
19 | Transfer | Out-of-Station |
20 | Allowances | Same |
21 | Sickness Benefit | Same |
22 | Medical Scheme | Same |
23 | Staff Transport | Same |
24 | Staff Housing | Same |
25 | Thirteenth Month Annual Cash Payment | Same |
26 | Job Rotation | Securities in Respect of Cash Shortages |
27 | Salaries | – |
28 | New Technology | – |
29 | Work Environment | – |
30 | Occupation Safety/Security | Same |
31 | Grading | – |
32 | Accident Free Award | Accident Free Award (Banking Group only) |
Items 10, 11, 13, & 14 To be negotiated at Company level | All negotiations to be at the national level |
3. Mandatory or negotiable issues
This refers to those issues which management and union he agreed to negotiate upon. While no law explicitly specifies these issues, wage issues and a host of other conditions of employment are recognized by the Labour Act of 1974 as falling within the collective bargaining process. However, through custom and past practice, certain issues have become mandatory for negotiation. Table below provides a listing of such issues. It can be seen that the number of negotiable issues fairly approximate the comparable list in the banking industry, as shown in columns 4 and 5 of the Table.
Mandatory or Negotiable Issues, 1982.
1 | Wages and Salaries |
2 | Hours of Work |
3 | Sick Leave |
4 | Out-of-Station Allowance |
5 | Shift and night allowance |
6 | Leave allowance |
7 | Annual Leave |
8 | Transfer allowance |
9 | Housing allowance |
10 | Redundancy (Principle) |
11 | Acting allowance |
12 | Pension and gratuity |
13 | Disciplinary procedure |
14 | Annual cash payment |
15 | Uniform/protective clothing |
16 | Medical scheme |
17 | Extra duty allowance |
18 | Canteen facilities |
19 | Overtime rates |
20 | Heat allowance |
21 | Maternity leave |
22 | Transport allowance |
23 | Long service award |
24 | Transport facilities |
25 | Car/Motor-cycle allowance |
Source: Tayo Fashoyin, “Emerging Trends in Collective
Bargaining in Nigeria”, Preman, 9, 1 (Jan. – June, 1982)
The progressive increase in the number of negotiable issues is due partly to aggressive union pressure, as they seek to bring as many issues as possible within the orbit of negotiation. Obviously, the more the number of issues in this category, the greater the chances of the union influencing the employment conditions of the employer(s). Naturally, the union drive to increase the number of negotiable issues is faced with management resistance to the inclusion of many items in the category. There is no doubt that the bargaining strategy employed by the respective parties does play a decisive role in these – opposite desires.
1.3 STATEMENT OF PROBLEMS
There have been incessant cases of trade dispute resulting in industrial strike actions could have been prevented at an earlier stage and where loopholes in the control and procedures have been exploited.
This research is going to dwell on the collective bargaining and the effects of trade dispute. If completed will contribute towards the solutions in our private and public institution. This is because, if the word collective bargaining
and its processes are understood properly, there will be no need to contend about strikes or its effects.
The theory lying behind the concept of labor management relations may be stated as:
The workers generally know the problems related to the work more actually than others in the organization. They generally possess some views and suggestions relating to- their work and have a desire to put them before the management. They expect that their suggestions find a due place in the formulation of policies affecting them. The management generally takes decisions on its own and imposes them on the workers. The views and the suggestions of the workers may or may not be relevant but ignoring them creates doubts in minds of workers about the intentions of management. This gives rise to labor-management conflict and makes workers alienated from management.” the application of behavioral science theories to problems of industrial relations and productivity at the shop floor level has indicated the significance of participative management in the reduction of alienation among workers in the modern technological system, increased job satisfaction and morale among employees and achievement of greater efficiency. The philosophy underlying
participative management stresses democratic participation in decision making, maximum employer- employee collaboration, minimum state intervention, realization of a greater measure of social justice, greater industrial efficiency, and higher level of organizational health and effectiveness, participative management echoes the millennial vision of nineteenth century-thinkers while heralding the evolution of new forms of individual organizations under twentieth century pressures (Walker 1973).it has only remained a means through which workers and their organizations’ can put forward their views and influence decisions, but also has developed into a new management strategy (Monat and Sarfati 1986).
Participative management is intended to provide an institutional structure in which interest based conflicts become less bitter through preventive as well as positive ways. This development is perhaps due to the realization that this might be a way to suppress conflicts, achieve a harmonious and qualitative development and also carry out the political programs of the most progressive forces in a society.
Various factors, such as socio-economic and political changes, the views of social thinkers, the theoretical orientations and the Marginal’s philosophies have contributed a
lot in its development. Participation in the political context is an influencing process, so also the plant level, it affects employee terms and conditions of employment. Yet at the same time, the dynamics of an enterprises viability and hence mutuality helps in establishing greater involvement rather than creating a feeling of alienation. Workers should feel in their work they are evaluated and respected as free persons of equal value within framework of rules and natural order and discipline needed in a well regulated industry. In an atmosphere of cooperation, mutual respect and tolerance, they should have to influence conditions and measures that affect them directly and whole community inside the undertaking” (Aspengren 1979). In an organizational system participative management may be considered as a philosophy, principle and a practice of ensuring industrial democracy through mutual consolation, communication and understanding by establishing faith, mutual trust and cooperation of workers and management. This will help to attain a whole hearted involvement of an organizations own workforce, each involving. Initiating and infusing with the organization in the area of his competence and concern, resulting in the achievement of organizational goals, individual well-being and industrial peace and harmony(Michael 1996).the
international; institute for labor studies defined participative management as ‘the participation resulting from practices which increase the scope for employees share of influence in decision making at different tiers of organizational hierarchy with concomitant assumption of responsibility”. In its broad sense, employee participation means associating representatives of workers at every stage of decision making, as Ibdone in former West Germany and Yugoslavia process by which the workers share in decision making extends beyond the decisions that are implicit in the specific contents of the job they do. This, in actual practice, amounts to the workers having a share in the reaching of final managerial decisions in an enterprise (Virmani 1978). Thus, participative management may be taken to cover all terms of association of workers and their representative with the decision making process, ranging from exchange of information, consultations, decisions and negotiations to more institutionalized forms, such as the presence of workers” members on management or supervisory boards or even management by workers themselves as practiced in Yugoslavia.
1.4 RESEARCH QUESTIONS
In order to assist the researcher do a good job certain question were formulated:
a. What is the essence of collective bargaining?
b. What is the origin of collective bargaining?
c. How will collective bargaining affect management labour relationship?
d. What is the best and fastest way to resolve any dispute?
e. How can frequent management labour dispute be avoided?
1.5 HYPOTHESES
As a way to ascertain the role of collective bargaining on management labour relationship certain hypothesis were formulated:
Ho Collective bargaining as it affects management labour relationship need to be reviewed
H1 Collective bargaining as it affects management labour relationship need not to be reviewed.
Ho The compliance of management in keeping to agreements is satisfactory.
H1 The compliance of management in keeping to agreement is not satisfactory.
Ho Enough strategy is employed to improve management labour relations.
1.6 SIGNIFICANCE OF THE STUDY
The importance of the study is not far-fetched. The study could expose to the management and the entire society to the collective bargaining process and the incidence, causes and effect of labour/management dispute.
This study will also open a new vista in the area of labour/industrial relations and arouse new ways, formula and weapons for setting inputs rather than incessant strike and lock-outs.
More so, that collective bargaining establishes what is generally referred to as industrial jurisprudence in the workplace. This represents a set of work rules jointly made by the employer and workers representative. These rules specify the rights and obligations of workers individually and collectively, as well as those of management. Also by this collective rule making the employer and the union undertake that the day to day interaction between them shall be guided by rules that have already been agreed upon. The employees contribution to rule making comes generally through his elected
representatives, through whom he influences the industrial policy of management.
1.7 SCOPE OF STUDY
We cannot say that collective bargaining is a panacea for all the ills of management labour relations.
Effective collective bargaining contributes to solving strategic problems of management labour relations at the enterprise and industry level. It enables the parties to arrive at a joint compromise to common problems. Management may lose their unilateral discretion on essential issues that affect the workers on the one hand, while they can take the, workers into their confidence regarding the problem that affect both of them, on the other. This would help avoid and avert undesirable situations and direct actions, while it stimulates productivity.
Thus a peaceful working environment is essential for establishing cordial relations, since both the employers and employees arrive at a mutual agreement that can create progress. They come closer that help them to maintain more cordial relations. ILO observes, collective agreements provide the climate for smooth progress. The agreement spell out the working relationship between employers and workers
organization in which a synthesis between the demand for one side and concessions for the other can be given practical shape. The trade unions and the workers are better off since they are able to take the workers into their confidence, which would lead to good employer-employee relations, industrial peace and prosperity.
Collective bargaining ensures a give and take policy leading to better industrial democracy and trade union management co- operation.
1.8 LIMITATION OF THE STUDY
This is only focused on the role of collective bargaining on management labour relations that brings about industrial disharmony and logjam in the utilization of available human and material resources for productivity.
The study covers only two firms in Port Harcourt- First Allumininun Company Limited and West African Glass industry ltd. it also considers the management on one hand and labour (employees) on the other hand. This research study is however limited by time to elicit elaborate responses and material needed, and also resources that would have
enhanced a more thorough research and outcome. There was also the unwillingness of the respondents to give information.
1.9 DEFINITION OF TERMS
! Bargaining Power
In negotiating, capacity of one part to dominating the other due to influence, power size, status or through a combination of different persuasion tactics.
! Collective Bargaining Agreement
A written contractual agreement between an employer and a labour union that governs wages, hours and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. Such an agreement is reached following the process of collective Bargaining.
! Collective Bargaining
Collective Bargaining is the process where wages and other condition of employment are settled through negotiation between employers or association of employers and work’s association.
This material content is developed to serve as a GUIDE for students to conduct academic research
THE ROLE OF COLLECTIVE BARGAINING ON MANAGEMENT AND LABOUR RELATIONS A CASE STUDY OF FIRST ALUMINIUM COMPANY LIMITED AND WEST AFRICAN GLASS INDUSTRY LIMITED PORT HARCOURT>
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