Different Levels Of Collective Bargaining Or Negotiation
Should an Employer conduct a feasibility study prior to the commencement of negotiations?
Employment relationships rarely remain unchanged for prolonged periods. Employer's requirements may occasionally vary, necessitating an employment contract amendment. Alternatively, Employees may feel the need to have their contract of employment amended for some reason. For example, the Employee may request a pay increment or the introduction of a specific benefit not enjoyed in the current employment contract.
These changes can be negotiated at the plant level, where the Employer negotiates with its Employees directly or with their Trade Union Representative. Alternatively, these issues can be negotiated at the industry level where Employers' Organisations negotiate on behalf of their Employer Members and Trade Unions negotiate on behalf of their Employee Members.
In the first scenario, the Employer is able to express their willingness to agree to specific terms directly to the other negotiating party. In the second scenario, the terms and conditions acceptable to the party are communicated by a third party, the Representative. Therefore, the Representative must be fully mandated (instructed) by their Member on what may be negotiated and to what extent.
It is always advisable for an Employer to understand the contents of a Collective Main Agreement which applies to their business. These collective agreements contain terms and conditions which are tailored to the specific needs of the industry at large. Therefore, certain terms may not suit one Employer while suiting another. Understanding the contents of the agreement will assist the Employer in assessing their needs and, in turn, furnishing their Representative with a clear mandate as to what should be negotiated.
Although the general perception may be that industrial-level negotiations only deal with salary increments, other terms are also negotiated. To understand the nature of the mandate an Employer can give their Representative, negotiated terms can be divided into three (3) broad categories:
- Terms of employment with regular financial consequences - Examples may include Salary/Wage negotiations, allowances (these terms will always have a direct effect on the Employer's finances on a regular (monthly) basis);
- Benefits with possible financial consequences - Examples may include performance bonuses and long-service awards (these terms will potentially benefit Employees but may not necessarily have a direct economic effect on the Employer's finances).
- Non-financial benefits - Example: Flexible working hours during winter months (these terms will not affect the Employers financially while offering favourable terms for Employees).
Understanding the nature of the terms being negotiated will assist many Employers in furnishing their Representatives with a mandate that suits that Employer's interests. Although the primary consideration is financial, non-financial terms are also being negotiated. Employers are encouraged to assess the unique requirements of their respective enterprises and conduct viability assessments to establish the negotiated terms. Failure to understand these needs may result in the Representative being improperly mandated. This, in turn, may result in the Employers' mandates not being considered.
It is not possible for the negotiating Representatives to formulate their own issues to be addressed - this must come from the Employers or Employees. It is thus a common practice that prior to the commencement of any negotiation, the Employers' Organisations and Trade Unions will reach out to their respective Members and request mandates. At this time, the Employers should be able to instruct their Representative, in writing, of their desired outcomes of the negotiation process.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
