What steps would you advice management to take to prepare themselves to negotiate over a trade union’s claim for an increase in remuneration at a time of economic downturn?

A trade union is a collection of workers, which aims to protect and promote their interest in the workplace, mainly by means of collective bargaining and consultation with employers.

Trade unions always strive to achieve the following for this members:
• Better wages and working conditions
• Greater security of income and employment
• Protection against arbitrary and discriminatory treatment by management.
In Kenya, there exists an Industrial Relation Charter which was formulated in 1962 and it spells out the agreed responsibilities and obligations of both management and the trade union in the settlement of disputes. They should both undertake to settle all disputes at the appropriate level and according to the procedure laid down by them. The management is obliged to recognize the union appropriate to its particular industry and accord it reasonable facilities for functioning.

Although trade unions provide advantages such as professionalism in handling disputes and helping in avoiding unnecessary disruptions of work during disputes, they sometimes are a source of disturbance to management. They sometimes make unreasonable pay demands for members even in times of hardship. It may reach a point when workers are paid more than their input and this may lead a firm to bankruptcy.

Steps that management should take to prepare for the negotiation
• When a trade union presents a grievance to management, both parties will select negotiating team to take part in the collective bargaining process. Collective bargaining is the process whereby representatives of management and workers negotiate over such items as wages, working hours or working conditions.
• It is not necessary to go for large numbers in the negotiating team, as decisions are not taken by a majority vote but rather with the team acting in unison.
• Besides, members of the negotiating team should be those capable of making decisions on behalf of the management. Usually the chief executive is left out because he may be forced to give a straight ‘yes’ to issues that need more careful deliberation. His absence also places the negotiating teams on equal footing.
• The management then must determine their bargaining power and the maximum concessions it can give to the union. This depends on the estimated cost of work stoppage (strike or lock out) to the management and also on its estimate of the unions cost arising out of stoppage. The management must collect relevant data on the following issues to know its bargaining position:

  • The existing state of the market
  • Availability of labour
  •  Management’s financial capacity to pay
  •  The union’s strength
  •  Reactions of shareholders and directors
  •  Government laws and previous agreements
  •  Grievance records

The management must also decide way in advance on the type of negotiation procedure it will adopt. The following 3 options are available:

• Haggling: issues are settled one by one or in an interdependent manner.
• Boulwarism: the management makes its first offer a full and final one.
• Continuous bargaining: meetings are held over long periods of time not just before strike deadlines.

The management must also decide on its strategies and tactics before entering the conference room.

Tactical devices may include shouting, requesting a recess, suggesting for negotiation on matters of no real importance etc.

After all these comes the actual bargaining process. It should be conducted with the following in mind:

• Initial demand will be submitted by either parties. These are the expectations of either parties.
• Continuing negotiations Each party attempts to determine what the other side values highly and to reach the best bargain possible. e.g. the union may offer to give up dental benefits (if dental cases are not numerous) for higher pay. The management on its side determines what the union values highly and how to make it give up some of it.

If management follows these steps, it is most likely to reach an acceptable agreement with the union over the remuneration claims. Some situations may however force management to develop slight modifications for effective bargaining to occur.

• Bargaining Impasse Regardless of the structure of the bargaining process, labour union and management do not reach an agreement always in all issues. In such cases, a deadlock may result in strikes by union or lock out by management.
• Settlement and contract After initial agreement on the issues being negotiated on has been made, the two parties i.e. the union and management representatives usually return to their constituencies to determine if what they have formally agreed on is acceptable. The crucial stage thereafter negotiation is ratification or getting the vote of acceptance. After ratification of the agreement, it is then formalized with a contract.

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