Page 170 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes As between unions and their members, collective bargaining tends to enhance the stability
of union membership. Employees, who perceive that their union is able to secure collective
bargaining agreements, or obtain concessions through collective bargaining, are less likely
to frequently change their union affiliations.
Current Collective Bargaining Trends

In no country can it be said that collective bargaining has been entirely at the industry or
enterprise level, since each system has a mix of both, even though not in equal measure.
However, industrialized market economies have generally practiced bargaining at the industry
level, except in the USA where there has been more bargaining at the plant or enterprise
level. Industry level bargaining in the USA has mainly been in specific sectors such as coal,
steel, trucking and construction.
During the last decade there has been a move towards more enterprise level bargaining in
many countries due to numerous reasons. There has been a decline in union membership
in several countries such as the USA, Britain, France, Netherlands and Australia. Increasing
unemployment and difficult business conditions have made employers reluctant to commit
to wage policies at the industry or national level. The emergence of governments in some
industrialized countries more favourably disposed towards private enterprise has resulted
in allowing market forces to operate, thus weakening negotiations at the national level.
Many employers view centralized bargaining as facilitating a more equal distribution of
incomes (which is one reason why many unions prefer centralized bargaining), but as
depriving employers of the ability to use pay as an instrument for productivity improvement
and to compensate for skills and performance. Strategic compensation systems are workable
only if introduced at the enterprise level to match the goals sought to be achieved. In
Sweden, which has been an extreme case of centralized bargaining, one of the strategies of
the Swedish employers during the last ten years has been to decentralize collective bargaining.
Germany, another country well-known for centralized bargaining, is displaying a tendency
towards decentralized bargaining. The push by employers for flexibility in the context of
increasing global competition has resulted in many flexibility issues such as new working
time arrangements, atypical contracts and pay systems being needed to be dealt with largely
at the enterprise level.
Compared with industrialized countries, collective bargaining in Asia has been minimal.
There has been an increasing tendency towards bargaining on wages and terms and conditions,
which has sometimes resulted in some form of arrangements among governments, employers
and unions which lay down certain guidelines as in Singapore, and the Accords from 1983
onwards in Australia. Asia has had a mixture of industry and enterprise level bargaining,
with the latter predominating. Apart from low unionization rates in several Asian countries
which militate against industry level bargaining, increased competition and the need for
flexibility does not make industry level bargaining popular in Asia. The Japanese have
demonstrated how a combination of enterprise level bargaining and shopfloor level
mechanisms enable enterprises to adapt to rapidly changing business conditions and also to
increase productivity.
In most countries, therefore, the tendency is to see the enterprise as the centre of gravity
of industrial relations. It is likely that some of the main concerns of employers such as
productivity, quality, performance, skills development, the need to be competitive and to
make rapid changes to adapt to the global marketplace, will eventually result in less
centralized collective bargaining.

7.3.6 Labour Courts
The agents of change in industrial relations are usually trade unions, employers and their
organizations, governments through legislation and administrative action, and the system
of courts which may be a combination of the normal courts and special courts or tribunals

164 LOVELY PROFESSIONAL UNIVERSITY