The collective agreement HR Management

At the end of the negotiating and bargaining process, collective agreements are reached. Traditionally, British collective bargaining has been notable for the informality with which agreements are reached but from the early 1970s there has been a growing trend to establish formal written contracts to avoid any potential problems given the possibility of differing interpretations of negotiation outcome.

The written agreement also contributes to a rationalisation and codification of employment relations procedures but the existence of formal written agreements will not prevent informal bargaining at local level. Indeed, there are a number of levels, outlined below, at which collective agreements can be reached.

  • Multi-employer agreements

Such agreements cover specific groups of employees (described within the contract) from a particular industry and are negotiated by employers’ associations or federations and full-time national trade union officials. Multi-employer agreements also form guidelines for employers who are not members of the industry association, and for firms that do not recognise unions. There is strong evidence that the incidence of multi-employer bargaining has been in decline for some time, with a growing preference for single employer and more decentralised bargaining (Brown and Walsh, 1991; Cully et al., 1999).

  • Single-employer bargaining (organisational bargaining)

Organisational bargaining may occur at a number of levels, for example:

  • Corporate – all those employed by the organisation are covered by agreements bargained by the company and relevant trade union officials.
  • Plant – the collective agreement is negotiated for a specific site or plant within the corporate structure affecting only the employees of that location. These agreements may be totally independent of national terms or constructed upon an industry agreement.
  • Determinants of bargaining level within organisations

It is indicated that company-level bargaining is associated with large organisations and the presence of professional HR specialists in corporate-level management (CBI, 1988). Site bargaining is associated with firms where labour costs are a high percentage of total costs and there are substantial numbers of workers on each site. At present, the choice of bargaining level falls within managerial prerogative influenced by a number of variables; for example, corporate-level bargaining may be favoured as one channel to neutralise potentially powerful plant-based union pressure and avoid inter-plant comparisons.

Plant-based bargaining, however, will tie down labour costs to local conditions, bargained by negotiators who have a shared awareness of regional conditions which may not always be to management’s advantage (Rose, 2001).


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