Global Issues In Employment Relations: Collective Bargaining, Trade Unions And Workers' Power

Chosen Journal Articles

Discuss about the Global Issues in Employment Relations.

The term collective bargaining refers to negotiations between employers and one or more groups of employees.RefThe employee group may represent worker groups or trade unions and are usually in negotiations for improvement of working conditions of workers, hike in wage,and re-negotiation terms ofemployment or so on. Collective bargaining is a very strong tool for employees when renegotiating new termsof employment, insisting on adherence to regulations, improvements in working conditions and so on. The decline of trade unions has resulted in a significant decline of power for workers who are now at the mercy of capitalist entrepreneurs, boards or governments.Ref

Pulignano, V., Doerflinger, N. & De Franceschi, F., 2016. Flexibility and Security within European Labor Markets: The Role of Local Bargaining and the "Trade-Offs" within Multinationals Subsidiaries in Belgium, Britain, and Germany. ILR Review, vol. 69, No. 3, pp.605-630.

This is a comparative study that examines the impact of local bargaining power on both the flexibility of labour as well as the security policies with regards to employment. the aim of this study is to examine the impact of the structural power of workers on the overall tradeoffs. The qualitative study is conducted in four multinational subsidiaries spread across Germany Belgium and Britain. Bargaining power provides workers with sensitive and strong means of negotiating improved terms of employment with employers.  From this it follows that the very base of trade union negotiations commence from the collective bargaining power of workers.

very structure of trade unions is dependent on the differences in the structural power of workers working in different countries. The attitudes of people and their needs tend to vary from country to country and this is reflected in the negotiations between employers and employee groups including trade unions. The easiest manner to put across the power of collective bargaining would be to compare the bargaining power of a single worker to that of an organized group called trade union.  The bargaining power of trade unions increases exponentially with an increase in density and based on the profitability of the firm.

Interestingly in case of larger unions the negotiations are done with a group of companies as opposed to a single company. In such a case the trade union is able to negotiate a similar deal for all workers across the various companies. Their collective bargaining power is also higher.  Furthermore, the power of trade unions is intensified due to their political leanings and the political support extended to them by various parties. The union funds provide for a provision of funds for workers to go on a long term strike in case their needs are not met by the employers.The major limitation of this study was lack of secondary information.

Impact of Collective Bargaining on Workers' Power

In case of industries that are highly dependent on labour for its functioning, it can even result in lockouts and heavy losses for the company. Most companies try to avoid such dire situations and try to negotiate for a lower settlement that what is asked for by the trade unions.  If the trade unions are strong, then they are able to ensure that theirtermsare met unconditionally. Alternatively, they agree for a mid way settlement.The circumstances mentioned above however, only hold true for cases where collective bargaining power is in the hands of workers and there remains a low rate of unemployment, making the availability of workers dear.

The improvements in technology in Germany has resulted in the need for fewer employees in many industries which have shifted to being technology centric, in a bid to increase outputs while doingaway with the vulgarizes associated with manual labour and trade unions. (8). This move, particularly in Germany and its multi-national subsidiaries across Belgiumand Britain has resulted ina significant erosion of bargaining power for trade unions, creating the current situation of lower workers in industries. This has been amply compensated by the absorption of these employees in various subsidiaries and alternative units and thus trade unions are able to negotiate a tradeoff through a structural shift in power of workers.

Addison, J., Bryson, A., Teixeira, P., Pahnke, A. & Bellmann, L., 2013. The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain. Scott J Polit Econ, vol. 60, no. 2, pp.182-209.

A study into the manner in which collective bargaining is eroding work places particularly in Germany, the authors look at the decline in collective bargaining power in Germany. They have determined that the exploitation of strength in numbers is actually declining and the impact the economic growth of the country is staggering. While there are several studies that speak of a tradeoff between worker structure across subsidiaries and the collective bargaining power of workers  who  continue to enjoy employment in the company or its subsidiaries at any given point of time.

The aim of this article was to compare collective power of workers in Britain with workers in Germany. When comparing the collective power of workers in Britain with that of workers in Germany, it came to light, that the British workers enjoyed a higher negotiating power when compared with the Germans. The loss of bargaining power among the Germans has been attributed to various factors including the loss of employment. The implications of the rise in bargaining power of workersis found to be directly proportional to the income distribution, employments levels, realwage s and output in all monopolistic organizations. This is indirect contrast to the diminishing marginal productivity of labour which states that as duration of labour increases, the productivity decreases marginally.

Impact of Trade Unions on Bargaining Power

It has been observed lately, that workers no longer feel motivated to relive unions. They are rather looking at a reaching ac compromise and letting matters slide rather than stand up and mobilize together for the protection of their rights. Often, it is noticed that management has taken the initiative to establish a work council as a positive and proactive step towards achieving a protection for its workers. Such work councils, tends to be skewed towards the interests of the management. The post-war growth of trade union movement was unprecedented during the early post war period, which coincided with the growth of the industrial revolution in most of Europe.

The trade movement frizzled off significantly during the last decade due to the various socio-economic and geo-politicalchanges happening across the world during the period. Work councils and trade unions were seen as a buffer for most workers. However, this ideology has witnessed a massive change during the past decade and may be attributed to the rise in governmental measures initiated towards public health care and social welfare activities though most of the developed and developing countries. (6). the limitation o this study is lack of secondary information. Unlike other countries across Europe, the revival of the trade union movement was not met with much cheer across Germany, primarily due to the significant drop in the number of workers employed in most factories.

German workers have not faced unemployment, per se. Instead they have been redistributed across different verticals and in many instances, been placed in multinational subsidiaries. This has resulted in a significant outflow of union workers leading to a drop in union memberships and culminating in the loss of their collective bargaining power.  (8). Yet another change observed on the labour front has been the drop in the number of German workers who have been replaced by cheaper immigrant workers; who are not ready to risk their income in favour of union membership and collective bargaining. Thus, it would be appropriated to conclude that these factors in tandem have resulted in a significant loss of collective bargaining power of German workers across all industries.

Addison, J., Teixeira, P., Pahnke, A. & Bellmann, L., 2014. The demise of a model? The state of collective bargaining and worker representation in Germany. Economic and Industrial Democracy. vol. 10, no. 1, pp.130-185

A discussion on the impact of the decline of collective bargaining on the private sector in Germany, thisjournal article speaks of the past and present state of worker representation. With many such worker groups, work councils and trade unions shutting shop due to the lack of membership among workers in the country; the impact felt across Germany shows signs of an organic reversal to the pre industrialization days when workers worked as individuals and not teams.Thus, the workers, by virtue of their lack of interest in capitalizing on the power of collective bargaining, have lost a powerful tool with which they were able to negotiate and put forth their demands to the top management.

Comparison of Workers' Collective Power in Britain and Germany

Empirical studies conducted on the topic by several economists have failed to give a logical reasoning to the unprecedented rise and the subsequent drop in trade union strength despite attempts to use several statistical and mathematical tools to understand the logic behind the trend. While the very strength of trade unions has been dependent on the low rate of unemployment as well as high worker density approaching 100 per cent; the last decade saw a significant drop due to the rapid strides in technology, making several jobs redundant. Workers were faced with the challenge of building new skills sets as wellas meeting competition from immigrant workers who were willing to work at lower wages. This resulted inerosion in job security and translated into a drop in workers as wellas trade union memberships.

The right to collective bargaining has been granted recognition from all levels, including international human rights which recognized trade unions as a fundamental human right. Collective bargaining has been given the nomenclature of being an essential right of workers and this right has global approval. However, it has been unfortunate that while collective bargaining has been recognized as an activity that enhances human dignity and grants workers the autonomy to influence rules in their place of work, it is not properly exploited in the present day.  (5). The advantages of trade unions include a mark up in wages amounting to a value between 5 to 10 per cent in developed countries, besides bringing about equalization in income distribution between unskilled and skilled workers.

The German advantage has been on the job problem solving along with flexible working that has contributed to Germany’s changing focus from worker groups to individual workers. It has also been observed that work place transitions have also contributed to the decline in collective bargaining. (7). unlike many of its European neighbours, Germany has continued to face an erosion of its collective bargaining power. This erosion does not have any logical or mathematical reasoning to explain the phenomenon.the lament of the demise of collective bargaining cannot be pinpointed on a single factor. Rather, it would be accurate to state that the contribution of several factors has influenced the decline in collective bargaining power in Germany to reach the depths that it is facing today.

Hirsch, B. & Schnabel, C., 2013. What can we Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992-2009. The Manchester School, vol. 82, No. 3, pp.347-362.

Factors Contributing to the Decline of Trade Unions

The decline of trade unions and its impact on bargaining models that were well established since the industrial revolution are discussed in this journal article. (3). The various Bargaining models speak of the advantage it bestowed on larger groups who were able to put across their needs and requirements while contributing to the policies that defined and shaped workplace characteristics. The changes in ideologies also saw a shift from collective bargaining to other worker agencies like work councils which are gaining prominence in Germany. The popularity of this model is felt among top management as well, who are able to exert considerable influence over the councils in sharp contrast to the trade unions which were rigid and immovable unless their demands were met.

The various bargaining models include distributive bargaining, cooperative bargaining, productivebargaining,and compositebargaining and so on. The commonly observed bargaining model in negotiations involving strong trade unions has been distributive bargaining. They are used to attempt in settling economic matters including wages, bonus, and monetary benefits and so on. This type of bargaining does not involve any offer-counter offer or negotiations. Both parties have a rigid view of what they want and attempt to achieve their objective without considering the opposing party. A highly popular type of bargaining, this model was keenly followed during the peak of the trade union movement.

Interestingly, the bargaining mindset that is popular today is a more flexible version called the cooperative bargaining model. Underthis model bothpartiesare willing to negotiate and reach a common ground of agreement as was observed during the recent economic crisis of 2010. While trade unions took a relaxed stand on wage cuts, employers also kept workers on board rather than firing them, thus ensuring a win-win situation for all concerned parties. While many are of the opinion that the decline in union power contributed to the decline in collective bargaining, the root cause lies elsewhere.

The factors that contributed to the current state of affairs can be traced back to the high level of machination that was seen in Germany as part of the industrial revolution. With the reducing dependence on human labour, the need to maintain and pamper the workforce was significantly reduced. This coincided with the easy availability of immigrant labour which was not only cheaper, but also less probable of creating unions for its empowerment. This scenario was the prima factor reason for the decline in trade union memberships as well as the union power that was witnessed across Europe during the post war era.

Conclusion

While the collective bargaining power of workers has undergone a significant shift in Germany, the primary factor that needs consideration is the change in attitude of German workers. These workers now show a marked preference for adopting a softer approach in place of the rigidity associated with collective bargaining seen during the peak of the trade union movement in Europe. The focus has now shifted towards a more symbiotic approach to bargaining rather than an insistence on a more rigid stand. While there are many who argue in favour of this change, particularly in view of the fluid worker movement across borders due to the changes in international laws; several of the advantages that workers enjoyed as partof their rigid stand is lost.

References

Addison, J., Bryson, A., Teixeira, P., Pahnke, A. and Bellmann, L., 2013. The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain.Scott J Polit Econ, 60(2), pp.182-209.

Addison, J., Teixeira, P., Pahnke, A. and Bellmann, L., 2014. The demise of a model?The state of collective bargaining and worker representation in Germany.Economic and Industrial Democracy.

Hirsch, B. and Schnabel, C., 2013. What can we Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992-2009. The Manchester School, 82(3), pp.347-362.

Pulignano, V., Doerflinger, N. and De Franceschi, F., 2016. Flexibility and Security within European Labor Markets: The Role of Local Bargaining and the "Trade-Offs" within Multinationals Subsidiaries in Belgium, Britain, and Germany. ILR Review, 69(3), pp.605-630.