The Impact of Collective Bargaining on the Nature of Industrial Relations
The prevailing trends in the international business environment during the recent decades has contributed to greater openness in trade, investment, finance and technology resulting in increased international integration and interdependence in business and between states. Further, the growing culture of globalization and its perceivable effects in several areas of the world overlay the contemporary changes in the existing world economy and standards ( 2003). Globalization is currently the tag for the promises as well as risks facing humanity in the modern era ( 1999; 2000; and 2000; and 2000). As a result, there is global cooperation among independent states directed to improved socio-political, economic, and cultural progression.
Meanwhile, a considerable number of companies have developed into an essential part of the period of global competition, increasing development, improved business paradigms, and corporate reorganization. The continuing conversion from the traditional industrial framework – with its hierarchical companies – to a contemporary worldwide, knowledge-founded financial system, and intelligent corporations altered the ideas regarding the social contract involving employers and employees. With this fact, it requires human resource (HR) purposes to realign and relocate itself in the surrounding area of these affecting drivers ( and 2005). Human resources are the most important drivers of organizational performance and productivity. The working principle behind HR that people are the best assets of a business organization remains true up to now. The achievement of corporate success can only be accomplished by people ( 1998; and 1996). Hence, there is a significant need for upper management personnel to maintain harmonious relationship between the employees.
Among the most important factors that constitute an effective human resource and industrial relations is collective bargaining. This paper argues that the structure of collective bargaining can have an important impact on the nature of industrial relations. In particular, it applies to the perspectives of various countries such as the USA, UK, Germany, and Japan.
Collective Bargaining and Industrial Relations
Collective bargaining, according to and (1999) is the process and practice of negotiations among the management and union representatives to come up with considerably fair and acceptable wage and employment conditions for the workforce. The ever changing dynamics of business necessitates the development of collective bargaining systems among countries so as to deal with the emerging trends and challenges of the global business setting. , , and (1979) identified the strong establishment of collective bargaining among nations covered. According to them, the important role of collective bargaining is seen on its function in maintaining harmonious working relationships among the companies and their employees especially in managing differing interests in employment relations. The ( 1997) reports that the there are significant changes in the collective bargaining institutions among countries. Various literatures supports that these changes are driven by some comparative economic merits of varied bargaining systems ( and 1996; 1993. In European countries, and (1996) and and (1995) documented the emerging changes and development. Such changes may initiate major alterations not only in union structure but also in the particular goals that are set and the approach employed in collective bargaining processes.
In employment or industrial relations, the theory of liberalism, which is about protection of personal rights over government intervention is applied on probing the growth of workforce as it provides clues to better understanding the changing concept of work. Industrial relations analysts, according to and (2006) have long been interested in employment conditions as minima and as rules or regulations which may limit labour market inequalities in various ways. The ( 1997) also states that “there is a fairly robust relation between cross-country differences in earnings inequality and bargaining structures”. With this fact, the welfare of employees as well as employers in a global environment must be the ultimate focus and that regulations in industrial relations are deliberately implemented.
The current belief that the general tendency will be toward an upgrading of the employment structure is supported by recent trends in the skill or functional distribution of the labor force. On this aspect, worldwide collective bargaining systems and structure affects the development of the existing industrial relations philosophies. For example, conflict management requires bargaining strategies that will uphold the principles of industrial relations as it pertains to fair employment welfare. There are several ways for two parties to negotiate their sides; these methods are most often used for labor relations especially when unions are attempting to discuss with the other parties concerning their wants and needs to be applied in their work. These bargaining strategies are extremely helpful especially in the organizational setting; as such discussions can lead to the overall improvement of the industrial relations regulations and policies. However, at the same time, these negotiations may also be disadvantageous when used in the inappropriate setting, especially when it has the potential to become a major battle between the parties, with several groups of people being directly and indirectly affected by their conflicts ( 1998).
On this paper, the evaluation of the structures of collective bargaining among four (4) countries namely United States of America (USA), United Kingdom of Great Britain (UK), Germany, and Japan supports the argument that collective bargaining systems affects the nature of industrial relations. Collective bargaining mechanisms are identified to be an important determinant of national economic capabilities and conditions in relation to international industrial relations regulations as well as the organizational or corporate initiatives. The succeeding discussion presents an overview of the structure of collective bargaining of the countries mentioned. All facts are gathered from an assortment of literatures that directly and indirectly tackles the subject matter. also, they are properly acknowledge.
- United States of America
The collective bargaining efforts of private sector in US are covered by the principles of the National Labor Relations Act. It is often characterized as decentralized in nature ( 1993). and (1979) reported that American collective bargaining structure serves as the primary solution in protecting the interests of the labor group. For instance, American unions depend on collective bargaining particularly when it comes to the advancement the welfare of their members. To quote and (1979), “The strength of American collective bargaining lies to a great extent in the fact that, because most contracts involve only one employer or even one plant, collective agreements tend to be very specific about a wide range of issues”. and (1988 cited in 1991) added that information sharing was also associated with the increasing bargaining powers of union.
- United Kingdom
(1993) and and (1992) reported that UK’s collective bargaining structure is decentralized as similar to USA. It started in the 1960s and eventually accelerated in the 1980s. This is among the most notable decentralization that has taken place in the industrial relations history ( and 2002). In UK, and (1979) categorized collective bargaining systems through joint consultative committees which often become the pre-bargaining forms. Additionally, managers have been keen partners of shop stewards in allowing several of these committees to become lighter in nature. For instance, basic financial rewards and conditions of service in UK are determined by national bargaining or government minimum wage legislation or by collective bargaining with labor unions. Details of conditions of service are often more important than the basics ( 2002, ). The European Union, commonly known as EU, is a popular communal organization of European democratic countries dedicated to increasing economic prosperity, lasting peace, and strengthening cooperation among its members and is perhaps the most important agent of change in contemporary government and policy-making in Western Europe ( and 2000, ). Today, UK’s collective bargaining structure greatly reflects the goals of EU, thus, it affects industrial relations especially in the national level of application.
- GERMANY
Germany’s collective bargaining structure is described as moderately centralized ( 1993). It also take place mainly in the form of regional industry-level bargaining ( and 2003). All collective bargaining systems among German organizations are directly communicated by the Ministry for Labour and Social Affairs. In the analysis of (1999), present courses of change that affects the German system of industrial relations are attributed to the co-determination and collective bargaining systems. Accordingly, bargaining is confined within the boundaries of the German Basic Law and executes the following functions of:
a) peace – by creating social and industrial reconciliation among the conflicting interests of both employers and employees;
b) order – by presenting an arrangement for the labour market; and
c) protective – by defending employees in opposition to the employers’ independent regulation of work ( 1997).
- JAPAN
Japan’s collective bargaining system, as similar to the Germany is very applicable in addressing the needs of the competitive international economy. and (1979) stated that collective bargaining occurs in enterprise level, but it is also “coordinated by federations at a higher level”. In relation to the industrial relations structure of Japan, joint consultation system was developed and widely institutionalized labor-management information sharing technique ( 1991). added that the process of collective bargaining in Japan is a result of integration of various regulatory bodies and conditions such as “constitutional guarantees, the Trade Union Act, the obligation to bargain in good faith and the right to strike” ( 1996).
ANALYSIS
Collective bargaining structure affects the nature of industrial relations as collective bargaining systems are dependent on the existing industrial relations regulations and vice versa. Among the four (4) countries discussed, the difference in terms of collective bargaining structure is a result of national economic considerations as well as organizational or corporate applications. In general, a newsletter article published by the (2004) states that “collective bargaining coverage is on average almost four times higher in the European Union than in the USA and three times higher than in Japan”. Nevertheless it is also important to not that the centralization and decentralization of collective bargaining structures is the main determinants of protecting the welfare of both employers and employees. Although in most countries, the percentages of workers who are covered by collective agreements are higher than those who belong to trade unions, it is still practical to evaluate the coverage of industrial relations. There are many different employment and economic factors that differ in every country and can possibly affect the nature industrial relations. These unobserved differences are important indicators of overall condition of the global workplace and its immediate environments. The ( 1997) recognized the presence of institutional factors and policy instruments that affect the labour market performance. It is also vital to see that some collective bargaining systems are independent to the existing policies and regulations of the government or any governing body or maybe collective bargaining systems interacts in various ways – easy or complex – and includes bargaining variables. From the viewpoint of the collective bargaining relationship, human work force must be treated in the most objective ways possible – without sacrificing any aspect of industrial relations. Procedures for hiring, layoff, transfer, and reassignment as well as wage and remuneration packages must established in terms of incremental effects of identified changes on the size and composition of the work.
Because human labour force is considered to be fuels of the national economy, it is very primary to take care of their rights and welfare. The effects of any collective bargaining procedures to the performance of their duties and responsibilities can be reflected to economic productivity. Thus, it is recognized that institutional capacity among players of any bargaining agreement must see to it that bargaining considers macro-economic implications at hand. the classification of the collective bargaining structure and practice is also crucial in nation decision making and taking. according to (1992), critics contend that The understanding of collective bargaining for more than a half-century indicates that the economic and social costs of people’s actions by now be more important than the benefits. Henceforth, all industrial relations practitioners and experts should keep an eye to the growing needs of both employers and employees.
Like any other conditions, the industrial relations and collective bargaining structures are subject to emerging trends that affects the global marketplace. With the era of globalization, stiff competition and technology revolution, it is expected that aspect and conditions of employment are directly or indirectly affected. The welfare of the international human labour force is the main consideration of many countries in devising their national collective bargaining structures that is associated with the globally acceptable principles of industrial relations.
References
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