Collective bargaining – history, definitions, analyses and criticisms HR Management

The term ‘collective bargaining’ was first utilised by Sidney and Beatrice Webb (Webb and Webb, 1902) who believed that this activity was the collective equivalent to individual bargaining, where the prime aim was to achieve economic advantage. So, bargaining had an economic function and was undertaken between trade unions and employers or employers’ organisations. This ‘classical’ definition of collective bargaining has been subject to a number of critical analyses.

In the late 1960s, Flanders (1968) argued that this view was erroneous; rather, collective bargaining should be understood as a rulemaking process which established the rules under which the economic purchase of abour could initially take place. By establishing rules, collective bargaining outlines a framework for future negotiations regarding the buying and selling of labour. So, it is not a collective equivalent of individual bargaining, as nothing is actually bought or sold; only the rules under which the commodity of labour can be bought or sold are established.

Flanders argued that collective bargaining also entails a power relationship; the imbalance of economic power, status and security between the single employee and that of the management can, to some degree, be addressed by collective pressure such that agreements are compromise settlements of power conflicts. Fox (1975) disputes Flanders’ argument that an individual bargain is an economic exchange which always concludes with an agreement, whereas collective bargaining is essentially a process to establish rules for exchange.

In fact, Fox argues that there is no assurance that either process will achieve agreement on terms acceptable to the parties involved in negotiation. Moreover, he believes that the economic function of collective bargaining has not been afforded sufficient attention by Flanders in his analysis. Drawing from these arguments, it is useful to recognise that Flanders moves the discussion forward with the emphasis on regulation but the contrast between collective regulation and individual bargaining is debatable, as Fox notes.

Rather than isolating one major function of collective bargaining, Chamberlain and Kuhn (1965) offer an analysis which outlines three distinct activities which interact to form the bargaining process:

  • Market or economic function. This determines the price of labour to the employer, thus the collective agreement forms the ‘contract’ for the terms under which employees will work for the employer, i.e. the substantive terms (see below) of employment.
  • Decision-making function. In this role, collective bargaining offers employees the opportunity, if they wish, to ‘participate in the determination of the policies which guide and rule their working lives’ (Chamberlain and Kuhn, 1965: 130).
  • Governmental function. Collective bargaining establishes rules by which the employment relationship is governed. Thus, bargaining is a political process as it establishes a ‘constitution’ (Salamon, 1992).
    From the above points it is clear that collective bargaining is concerned with the establishment of:
  • Substantive rules. These regulate all aspects of pay agreements and hours of work.
  • Procedural rules. These establish the rules under which negotiation over the terms and conditions of employment can take place and establish grievance and dispute procedures.
  • Bargaining principles

The aim of collective bargaining is to reach negotiated agreements upon a range of issues pertaining to the employment relationship. From this range of issues, some will hold the potential for a conflict situation where the distribution and division of scarce resources are under negotiation (for example, division of profit as dividends or wages increase). Others, however, will have mutual benefit for employees and management, with the major debate focusing upon the most beneficial manner in which to implement change (for example, introduction of health and safety procedures).

These differences were noted by Walton and McKersie (1965) who outlined two approaches to collective bargaining:

  • Distributive bargaining. One party will seek to achieve gains at the expense of the other; the aim is the division of a limited resource between groups, both of whom wish to maximise their share. Pay bargaining is distributive bargaining as one party’s gain is the other’s loss.
  • Integrative bargaining. This approach seeks mutual gains in areas of common interest, with a problem-solving approach from the parties involved. Successful integrative bargaining depends upon a relatively high level of trust between parties and a willingness to share information.
  • Summary

Collective bargaining remains an important part of the contemporary employment relationship, although since the early 1980s, it has been subject to contraction and decline. Recently however, due to limited political support and new statutory rights, this decline in influence would appear to have halted (Bach, 2002). There has been considerable debate regarding the fundamental nature and purpose of the bargaining process, but any definition of collective bargaining must take account of historical and contemporary influences which impinge upon those involved in bargaining practices.


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