Collective

Bargaining
BSMH5033
INDUSTRIAL
RELATION
Prepared For: Asoc.Prof Dr Kamal Ab Hamid
Prepared by:
Gayathri Ganeson
(818153)
Yashotharan Batumalai (818158)
Harigaren Murugesoo
(818154)

DEFINITION OF COLLECTIVE BARGAINING

Means through which employers and their organizations and

trade unions can establish fair wages and working conditions.

It also provides the basis for sound labor relations
Typical issues on the bargaining agenda include wages,

working time, training, occupational health and safety and

equal treatment.

FUNCTIONS OF COLLECTIVE BARGAINING

It is a rule making or legislative process:
Collective bargaining formulates terms and conditions under which labour

and management will cooperate and work together over a certain period, as
agreed.
It is a judicial process:
In every collective agreement there is a provision regarding the

interpretation of the agreement and how any difference of opinion about

the intention or scope of a particular clause should be resolved. Such
interpretation can be left to a joint committee of workers and management
representatives or to a third party agreed upon by the trade union and the
management.
It is an executive process:
Both the management and the trade unions attempt to implement the agreement

signed, each taking up a series of obligations under the agreement.

FACTORS INFLUENCING COLLECTIVE BARGAINING

Organizational and institutional framework for bargaining

Organizational behavior
Strategic and tactical planning:
Identification of long-term goals
Identification of measurable steps to accomplish goals
Assessment of organizational strengths and weaknesses
Evaluation of external opportunities and threats
Establishing realistic expectations
Setting priorities
Evaluating the results

Factors influencing collective bargaining (cont)

Membership support of and involvement in the bargaining

process
Formulation of demands
Involvement of members in constitution of the committee
Keeping members informed while keeping negotiations private
Ratification or other support of the agreement reached

Building an effective bargaining committee

STRATEGIES OF COLLECTIVE BARGAINING

Be Prepared
Each member of the bargaining team should have a thorough

understanding of the current collective bargaining agreement, and if

possible, the changes that have been made in the recent past.
The team should review grievances that have been filed since the last
agreement and have information on health care costs, as well as data to
support whatever changes the employer may be requesting from the
union.

STRATEGIES OF COLLECTIVE BARGAINING (CONT)

Know the Bargaining Unit

It is helpful to have a good sense of what is important to the bargaining

unit.
Is the union comprised mainly of older workers nearing retirement?
Is the union comprised of younger members whose focus is more on
salary issues?
This basic information will help the team prepare its proposals and can
help target proposals that are more likely to be accepted by the union.

STRATEGIES OF COLLECTIVE BARGAINING (CONT)

Have the Data to Support Your Positions
All of the preparation does no good without the proper data to support

your positions.
Have copies of past bargaining agreements, copies of financial
documents, and any other source of information needed to support your
positions.

PROCEDURES OF COLLECTIVE BARGAINING

Once a union is established in a workplace, discussions begin between the

union and the employer regarding a new labor contract which will govern the
working relationship between the employer and all the workers in the
bargaining unit.
This process is known as "collective bargaining.
The union is the exclusive employee representative; individual workers are
prevented from negotiating their own work arrangements with the employer.
Union representatives instead do the negotiating with the employer, and each
worker is required to abide by the terms of the approved contract

PROCEDURES OF COLLECTIVE BARGAINING (CONT)

The employer is required by law to negotiate with the union over various

terms and conditions of employment, which may range from wage and
benefit issues to work rules that govern how workers are to perform certain
tasks.
The collective bargaining process begins with the union and the employer
presenting their proposals where both parties are required by law to negotiate
in "good faith," and are subject to penalties if they fail to do so
This does not mean that an employer must necessarily agree to any specific
proposal brought forth by the union.34 Rather, the duty to bargain in good
faith is simply a mutual obligation to participate actively in the deliberations,
indicating a present intention to find a basis for agreement.

PROCEDURES OF COLLECTIVE BARGAINING (CONT)

The legal right to collectively bargain is viewed as the employees' unified

voice, through the union, in helping to determine their wages, hours, and
other benefits of employment.
The employer and union discuss the issues, present information to show the
reasonableness of their demands, and try to achieve concessions in which
neither party is required to agree to any provision, only to discuss it in good
faith.
If the parties cannot resolve one or more issues, they have reached what is
called "impasse."

PROCEDURES OF COLLECTIVE BARGAINING (CONT)

At this point the union may call a strike, or the employer may "lock out" the

union workers. In some circumstances, the employer may bring in

replacement workers to continue operations.
At this point the union may call a strike, or the employer may "lock out" the
union workers. In some circumstances, the employer may bring in
replacement workers to continue operations.
During the negotiation, one of the parties may charge that the other has
committed an "unfair labor practice," and if the appropriate government
regulatory agency agrees, the guilty party may be prohibited from engaging
in certain actions.

PROCEDURES OF COLLECTIVE BARGAINING (CONT)

The employer's duty to bargain includes an obligation to supply to the

union, when requested, any information that is "relevant and necessary" for
union agents to bargain intelligently and effectively
The employer's duty to bargain also precludes it from taking any unilateral
action by changing the conditions for which bargaining is first required.
If the parties reach impasse, then the employer is free to make the changes
and the union is free at any time to resort to a strike or picketing to enforce
its demands.

COLLECTIVE AGREEMENT
A collective agreement is defined as: an agreement in writing concluded

between an employer or a trade union of employers on the one hand and a

trade union of workmen on the other relating to the terms and conditions of
employment and work of workmen or concerning relations between such
parties.
A collective agreement therefore:
Must be in writing.
Is a result of negotiations between an employer or a trade union of
employers and a trade union representing employees.
Includes the terms and conditions of employment to be provided to the
employees within the scope of the agreement.
Includes clauses relating to the relationship of the employer and the trade
union of employees.

COLLECTIVE AGREEMENT (CONT)

A collective agreement is a contractual document which binds the parties

involved providing certain conditions are met. These conditions are:

A collective agreement must be signed by the parties to the agreement,
i.e. by persons authorised by these parties.
A collective agreement, once signed, must be jointly deposited with the
Registrar of the Industrial Court within one month. Ten copies are
required for this purpose. The copies of the agreement can be delivered
by hand or by registered mail to the Court.

COLLECTIVE AGREEMENT (CONT)

The collective agreement must include the names of the parties, i.e. the

union and the employer or union of employers; the duration of the

agreement, which must not be less than 3 years; a procedure for modifying
and terminating the agreement; and include a procedure for dealing with
any disputes relating to interpretation of the agreement.
Terms and conditions of employment included in a collective agreement
must not be less favourable than or in conflict with any relevant
employment legislation.
The agreement also must not be less favourable than those in the
Employment Act 1955, Sabah and Sarawak Labour Ordinances or any
other employment-related legislation.

COLLECTIVE AGREEMENT (CONT)

Once a collective agreement has been granted cognizance by the Industrial

Court it has the same status as an award of the Court.

A collective agreement is binding on the parties to the agreement.
Whereby one of the parties is a trade union of employers, the agreement
will bind all members of the union and their successors, assignees or
transferees.
The agreement will also be binding on all employees employed by the
employer as well as those employed at a later date, after the signing of the
agreement.
The terms of a collective agreement are implied into the contracts of
employment of every employee within the scope of the agreement and
cannot be varied until a subsequent agreement is made unless there is a
decision of the Industrial Court that the terms are to be varied.

RELATED LEGISLATION AND IMPLICATION

Restricting collective bargaining

Frustrating new unions
Collective agreements and time-wasting
Long delays
Strike action
Virtually impossible to strike