Collective Bargaining

Collective Bargaining

Collective Bargaining

Where trade unions are established, within an employing organisation and/or a wider institutional framework, collective bargaining processes may determine wage structures for a “class” of employees. Management becomes less able to treat labour as individual, replaceable units. Collectively negotiated and regulated wage structures may also apply to the individual who, whilst entering into an employment contract as an individual and indeed not necessarily a trade union member, becomes subject to the terms and conditions of employment agreed between an employer and a trade union for that class of employees e.g. railway workers.

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Some Labour Market Relationships

Collective negotiation will typically involve comparability with other groups (internal and external) not just supply and demand factors. Comparability may lead to one group through their trade union or word of mouth or the media to argue e.g. “nurses were awarded 7.5%, teachers now deserve at least this in their next pay award – and more because of past slippage against inflation”. There is a ratchet effect – always upward from such pay comparability arguments. Dual (external and internal) labour markets Hiring and firing are interactions between organisations, individuals and the external labour market. There are internal labour market effects also.
Employers with a large work forces and organisation structures have internal labour markets characterised by
· rules governing points of entry into jobs, required qualifications and starting salaries
· salary structures and job evaluation
· internal mechanisms for enabling progression
· various modes of training provision