Research Paper-Impact of Globalisation Collective Bargaining

CCL&CS AADLS
Student ID#:2004030908 47 pages

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CIPRIANI COLLEGE OF LABOUR

AND COOPERATIVE STUDIES
Churchill Roosevelt Highway, Valsayn
ASSOCIATE OF ARTS DEGREE

LABOUR STUDIES
(Full Time)
Module: Research / Thesis Project

LBS 260
Student Identification: 2004030908
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CCL&CS AADLS
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A THEORETICAL ANALYSIS OF
THE IMPACT OF GLOBALISATION
ON THE COLLECTIVE BARGAINING PROCESS
IN TRINIDAD AND TOBAGO
by
Reginald Rose
A Thesis presented to the Department of Labour Studies

of the
Cipriani College of Labour and Cooperative Studies
in partial fulfillment of the
Associate of Arts Degree

In
Labour Studies
Churchill Roosevelt Highway

Valsayn, Trinidad
Republic of Trinidad and Tobago
October 2006
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Table of Contents
THESIS STATEMENT 5
INTRODUCTION 6
European Coordination of Collective Bargaining 7
CHAPTER 1
Globalisation and the CSME 12
CHAPTER 2
Labour Issues and Migration 14
Intraregional Labour Flows 14
Extraregional Migration Flows 15
The Adversities of Globalisation 16
CHAPTER 3
Legislation 17
CHAPTER 4
General Labour Regulation 19
CHAPTER 5
Collective Bargaining Procedures 22
CHAPTER 6
The Development of Collective Bargaining 25
The ILO Convention and Collective Bargaining 26
Bargaining in Good Faith 27
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CHAPTER 7
The Steps to Collective Bargaining 29
The Role of the Law in Collective Bargaining 29
Communication and Collective Bargaining 30
Public Sector Bargaining 32
CHAPTER 8
The Collective Agreement 33
CHAPTER 9
Application of Collective Agreements 34
CHAPTER 10
The Negotiation Process 36
Recognition 36
Planning and Strategy 37
The Negotiating Team 37
The Negotiator 38
Completing Negotiations 39
CONCLUSION 40
BIBLIOGRAPHY 44
STUDENT DECLARATION 45
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Thesis Statement:
“The Impact of Globalization on
the Collective Bargaining Process
in Trinidad and Tobago?”
(A Theoretical Perspective)
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Introduction
National systems of industrial relations are embedded within national institutional
and cultural arrangements, which have developed over a long period. They
therefore show considerable diversity. Over the last 30 years they have faced both
internal and external challenges. However, in the light of Europeanisation and
globalisation, these challenges are increasingly similar. This thesis paper attempts
to look at the impact of globalisation and European integration on industrial
relations, with specific attention to the Collective Bargaining process, within
Trinidad and Tobago, and by enlarge the Caribbean Region.
This paper attempts to discuss the extent to which industrial relations systems are
themselves being ‘Europeanised’, within a framework that provides an overview
of the connections between globalisation, European integration and the various
processes of economic and social modernisation which are influencing changes in
societies. It finds that the pressures of globalisation, in particular the
internationalisation of finance capital and integrated production, have changed the
power relations between capital, labour and the state, largely to the advantage of
capital, which enjoys increased exit options.
Developments in both national systems of industrial relations and at the European
level are discussed and as far as the national level is concerned, several aspects of
the Europeanisation of industrial relations are considered: the European social
dialogue, European works councils, European coordination of collective
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bargaining and the involvement of industrial relations actors in the various
European economic, social and employment policies.
An approximation of European systems to American or Japanese models can be
regarded as inapropriate. This does not mean that single elements of these
capitalist models (workplace agreements in concession bargaining, etc.) could not
be incorporated into the European systems. Even so, not least on account of the
significant social and cultural path dependencies affecting action and collective
actors, and on account of longstanding preferences of the continental European
CME -- models, far-reaching Americanisation or Japanisation is unlikely.
European Coordination of Collective Bargaining
The Maastricht criteria (the criteria, set out in the Treaty of Maastricht, that need
to be met by European countries if they wish to become full members of the
Economic and Monetary Union. They include: 1) inflation of no more than 1.5 %
points above the average rate of the three member states with the lowest inflation,
2) a national budget deficit close to or below 3 % of gross national product, and
3) public debt not exceeding 60 % of gross national product) in the framework of
a common European currency have brought greater transparency concerning the
various components of wage costs, thereby increasing cost-based competition
between individual countries. The danger perceived is that such a situation may
lead to intensified `regime shopping'. To counter this danger, the European Trade
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Union Confederation (ETUC) and industry federations have set out to encourage
stronger coordination of collective bargaining policy.
In this context a Europeanisation of industrial relations has been developed with a
view to achieving the cross-border coordination of collective bargaining. To date,
however, little research has been conducted on these early attempts at
coordination. Extremely diverse views are expressed in the literature regarding
the possibilities for development of a European coordination of collective
bargaining. While the pessimistic position particularly stresses the economic,
social and organisational type of coordination, the optimistic variant places
stronger emphasis on the gentle pressure exerted by market integration and the
fact that a de facto European wage area is developing of which, sooner or later,
the national trade unions will have to take account.
Central problems associated with the development of a coordinated collective
bargaining policy in Europe, and with European industrial relations in general are
apart from language and communication problems the diversity of organisational
and political structures, as well as of organisational cultures, and the attendant
problems of coordination (between rank-and-file level, the national and the
European level). The first trade union endeavours to achieve a coordination of
collective bargaining policy, contain the wage reference formula, which includes
two main components: the national inflation rate and productivity. To what extent
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this coordination formula has found acceptance in national collective bargaining
policies has not yet been empirically investigated.
A number of factors determine the level at which collective bargaining takes place
in a particular culture/country. One key factor is the preferences of the key actors
within the system, the employers and their associations, the trade unions, and in
some cases, the government, which may be a key player in establishing the
political environment within which the system develops, especially if a corporatist
ideology is dominant. National institutions also influence the level of bargaining
(Coates, 2000; Crouch and Streek, 1998; Hall and Soskice, 2001). The pattern of
national collective bargaining is diverse and complex (McIlwee, 2001).
Collective bargaining systems have been under significant pressure to adjust since
the mid-seventies. The progressive internationalisation of the economy and the
single European market have intensified global competition. At the same time
structural change and the introduction of post-Fordist production methods, along
with the accompanying external and internal flexibilisation of firms (global
sourcing and just-in-time production), have significantly affected the operation of
centralised collective bargaining. These global trends have not so far led to any
significant convergence of collective bargaining systems, which continue to
display notable differences within Europe. This is attributable not only to the fact
that the social institutions in which collective bargaining systems are rooted are
characterised by a deep capacity for inertia.
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This economic dynamic is accompanied by increasing demands for flexibility and
adaptation which call into question the stability that has characterised industrial
relations to date. The question then is: can centralised collective bargaining
systems continue to be maintained at sectoral level, in order to fulfill their
function as a condition of stability, without at the same time counteracting the
demands for greater flexibility and adaptability?
The globalization process poses a significant challenge to small developing
economies, which are already dealing with a number of issues in their pursuit of
sustainable development. The effects of globalization on employment have
stemmed from changes in the composition of output. To lessen the impact of
liberalization on labour, Caribbean countries have introduced educational and
skills-training programmes. Training must be fully emphasized, and trade unions
should insist that training should not begin on the job, but that greater emphasis
must be placed on the country’s younger generation.
Regardless of the challenges that face collective bargaining systems, these
systems remain essential for social cohesion. The preservation of the stability of
the The Europeanisation of industrial relations in a global perspective systems is
therefore not of economic interest alone, but is at the same time a question of
social cohesion, which will exert a positive feedback effect on economic
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performance. The preservation of a high degree of social cohesion is an important
goal in the modernisation of European societies.
In industrial relations research there is far-reaching consensus that development of
collective bargaining systems in the Central and Eastern European accession
countries is still only fragmentary and that the existing systems are characterised
by a high degree of diversity. The stabilisation of these systems and their
compatibility with Western European systems cannot at present be assessed. The
possible repercussions on the European social model have been barely researched
to date.
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CHAPTER 1
Globalisation and the Caribbean Single Market and Economy
It can be said that globalisation has been around for the past 500 years, however
the term today refers to the post cold War era and the decade of the 1990’s, with
the aim of transforming the world into one economic entity along the principles of
neo-liberalism. These principles mean that national barriers to the movement of
goods and services, investments capital, and money must be removed, and
government intervention in economic life must be minimized. It is said that the
globalization project actually emerge out of the turbulent developments of the
1970s.
The Caribbean islands were among the first areas to be impacted by early
globalization, in the form of maritime expansion. There followed mercantilism,
slavery and the plantation system, and centuries of rivalry and wars among the
major colonial powers. The Caribbean compromises of 28 independent states and
dependent territories in the Caribbean Sea and affiliated countries on the adjacent
mainland. The common factors in the Caribbean are small size, the legacy of
plantations, slavery and indentured labour, economic and political dependency.
The impact of globalization on the Caribbean is therefore mediated by the wide
variety in economic structures and external association.
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The globalization process poses a significant challenge to small developing
economies in the Caribbean, which are already dealing with a number of issues in
their pursuit of sustainable development.
At the CARICOM level, many countries have also signed Protocol II to the treaty
of Chaguaramas, which seeks to establish free movement of labour within
CARICOM countries. However, labour movements are still limited because many
countries still have trepidations about allowing the free movement of people
within the subregion.
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CHAPTER 2
Labour Issues and Migration
Unemployment rates remained high during the 1990s. At a sectoral level, the
effects of globalization on employment have stemmed from changes in the
composition of output and trends in intra and extra regional investment flows. To
mitigate the impact of liberalization on labour, Caribbean countries have
introduced educational and skills-training programmes to enable workers to meet
the demands of the constantly changing economic environment. Also the
technical and vocational institutions have been restructured to make them more
relevant to the needs of labour markets.
In recognition of the important role that small and medium-sized businesses play
in creating jobs, many countries have introduced a quantity of programmes and
mechanisms, aimed at promoting the development of these enterprises. Some
countries have also introduced measures to increase labour-market flexibility.
Labour movements are still limited because many countries still have some fear
about allowing the free movement of people within the region.
Intraregional Labour Flows
Intraregional labour flows have been growing within the last decade, however
there is not much information on their volume. Migrant labour tends to flow from
lower income countries to higher income countries, e.g. from Guyana to Trinidad
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and Tobago. Migrant workers are mainly unskilled agricultural workers or
workers in construction and service industries, even though they can have a
positive impact on countries experiencing economic booms. However, they pose
economic and political problems for smaller Caribbean economies.
Extraregional Migartion Flows
Extraregional migration flows have been motivated by both push and pull factors,
and have a greater share of skilled workers. Some push factors include economic
decline, political instability and increasing crime levels. Pull factors in developed
countries include the increased demand for skilled labour, and is largely generated
by the ageing labour force and the shortage of skilled labour, i.e. teachers and
nurses, etc. The rapid growth of information technology and the new
technological advancements are also pull factors in developed countries that affect
the smaller Caribbean countries.
It appears that the Caribbean region is now emerging from a cyclic period of
introspection and self-analysis. The challenges of international competitiveness
and globalization have provided the opportunity for this analysis. Deriving from
this period are policies of collaboration and consultation, effective use of the
principles of tripartism, social responsibility, and the fierce defense of workers
and trade union rights.
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The Adversities of Globalisation
Caribbean trade unions are not immune to the adverse effects of globalization. It
has taken a toll on the economies of many countries, with small farmers, women
workers, and workers in general being the most vulnerable. On a daily basis
workers must deal with issues such as redundancies, lay-offs, downsizing and
casualisation of the labour force. Collectively as a region, the labour movements
attention will now be focused on issues relating to the establishment of a
Caribbean Single Market and Economy, as part of the realities of CARICOM.
Scores of workers are being and will continue to be displaced as a result of
advancing technology and globalization. As such, trade union leaders should be
more focused on retraining opportunities for the workers they represent, than
advocating industry shutdowns when jobs are at risk. Trends in the international
market place should be observed and strategies developed to deal with them in a
positive rather than a combative manner. Trade unions must focus on the long
term and for the labour force to accept that technology is constantly advancing.
The globalization process and the World Trade Organisation (WTO) are breaking
down tariff barriers and are redefining not only workers but countries as well.
Training and retraining must be fully emphasized, and trade unions should insist
that training should not begin on the job, but that greater emphasis must be placed
on the country’s younger generation acquiring vocational skills at both the
secondary and tertiary levels.
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CHAPTER 3
Legislation
A key aspect of industrial relations in the European Union is that, at overall EU
level and in many individual Member States, there is legislation regulating in
detailed way many areas of industrial relations, employment conditions and
workers' rights, which is added to and amended frequently as situations and
priorities change. In Japan and particularly the USA, by contrast, only the basic
'rules of the game' and/or a number of minimum rules on employment conditions
are laid down in law. However, 2003-2004 were relatively busy years in
legislative terms in these two countries, and Japan especially seems to be
increasing the volume and scope of its employment legislation to deal with new
economic and social conditions.
The Constitution of Trinidad and Tobago recognizes and guarantees citizens
certain basic human rights and freedoms, the right to freedom of association and
assembly is also a fundamental right protected by the Constitution. Employers
also have the right to form and join their own associations. In Trinidad and
Tobago collective bargaining takes place between company and recognized
majority union rather than on an industry wide basis. The Government as an
employer also bargains collectively. The process of collective bargaining is
regulated by Part IV of the Industrial Relations Act (IRA) and allows industrial
action, including strike action, once taken in accordance with the IRA. The IRA
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states that the parties to a collective agreement shall be the recognized majority
union, and the employer or the successor to either the recognized majority union
or the employer.
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CHAPTER 4
General Labour Regulation
The general industrial relations policy in Trinidad and Tobago is based on
voluntary collective bargaining between employers and workers, via their
representative associations, for the settlement of terms and conditions of
employment. The employment relationship in Trinidad and Tobago may be
governed by either or a combination of both industrial relations principles and
practices, and legislation. While the Government has ratified several ILO
Conventions, including the Tripartite Consultation (International Labour
Standards) Convention, 1976 (No. 144), these Conventions only become effective
when they are legislatively implemented. A 144 Tripartite Committee, comprising
all of the social partners, trade unions, employers, and Government, is in
operation in Trinidad and Tobago with the responsibility of considering and
recommending the ratification of ILO Conventions.
State employees include civil servants, teachers and members of the Protective
Services (Fire, Police and Prison Services). The employment relationship between
the State and its employees is governed generally by legislation, which makes
provisions for terms and conditions of employment including recruitment, hours
of work, leave entitlements, payment of remuneration, pensions, allowances and
other benefits. There is legislation which deals specifically with each group, such
as the Civil Service Act, Chap 23:01 for all civil servants, the Police Service Act,
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Chap. 15:01, as revised by the Police Service Bill (2003), the Fire Service Act,
Chap. 35:50 and the Education Act, Chap 39:01 for teachers.
The representative associations of monthly paid State employees may bargain
collectively with the Chief Personnel Officer, who is deemed to be the employer
of State employees under the IRA. The subject of these negotiations include wage
increases, traveling, and other allowances and leave entitlements. When
agreement is reached on a matter the parties enter into a Memorandum of
Agreement. Where this Memorandum affects existing legislation, the legislation
is accordingly amended to give effect to the agreed position. The terms and
conditions of employment of daily paid State employees are contained in
collective agreements entered into by their recognized majority union and the
Chief Personnel Officer after collective bargaining.
In the private sector collective bargaining is generally engaged between individual
companies with the respective recognized majority unions, rather than on an
industry wide basis. Many companies have industrial relations or human
resources managers who handle negotiations. Companies which do not have
industrial relations professionals may hire private negotiators or practitioners to
conduct negotiations on their behalf. Trade unions have negotiators on their staff.
Those aspects of the employment relationship which could not be left to collective
bargaining such as employee health and safety, minimum age of employment and
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workers' compensation, retrenchment and severance benefits and maternity leave
are set down in legislation which bind the State and private employers. The
Factories Ordinance (soon to be replaced by the Occupational Safety and Health
Act , assented on 30 January 2004, but still awaiting proclamation, and the
Employment Injury and Disability Benefits Bill ) sets standards for employee
health and safety at the workplace. The Workmen's Compensation Act, to be
replaced by the Employment Injury and Disability Benefits Bill provides
compensation where employees are injured on the job, while the Retrenchment
and Severance Benefits Act guarantees the payment of severance pay to
retrenched employees. The Maternity Protection Act provides maternity leave and
related benefits to female employees.
The Government has also recognized the need to implement legislation which sets
minimum terms and conditions of employment so that employees are guaranteed
a basic level of rights and protection. The IRA sets the stage for the practice of
industrial relations in Trinidad and Tobago. It is the legal framework within
which parties bargain collectively, settle disputes and come before the Industrial
Court for arbitration.
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CHAPTER 5
Collective Bargaining Procedures
The purpose of collective bargaining is to establish terms and conditions of
employment for a bargaining unit, agreed between the recognized majority union
and the employer, into a collective agreement. Where a recognized majority
union and an employer agree to initiate negotiation of a collective agreement they
must notify the Minister of Labour. When parties have settled upon a collective
agreement it must be registered by the Industrial Court either through the Minister
or by either party to the agreement. Only upon registration does the collective
agreement become binding upon the parties and enforceable by the Industrial
Court. A collective agreement may be made for a period of not less than three (3)
years and no more than five (5) years.
The research to date does not allow unequivocal conclusions to be drawn
concerning future developments, although till the time being organised
decentralisation of collective bargaining, sectoral agreements with opening
clauses or in combination with plant-level bargaining through works councils is
dominant in continental Europe's CMEs, while the UK is characterised by plant
and company-level agreements and decentralization processes, which turned out
to be processes of deregulation.
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A much more decisive factor is that the continental European economy is
effectively based on the close-knit relationship between social institutions and
industrial relations systems. It is clear that the nucleus of the cooperatively built
up industrial relations apparatus including collectively agreed pay systems in the
continental CMEs is not being called into question by the parties to the system
(state, employers, trade unions). Empirical analyses show that between wage
levels and employment there is no clear correlation. Nonetheless, collectively
agreed pay developments have, under pressure from unemployment, been
moderate since the beginning of the 1990s and have thus supported job creation in
a variety of forms (social pacts, opening clauses, investment and skills
agreements, working time policy).
The service sector remains an Achilles heel for labour organisations and
continental corporatist welfare states in particular the area of personal services
which is not exposed to global competition which in the continental European
welfare state models (including France, Germany, Belgium) is weighed down by
above-average non-wage labour costs (these were previously compensated for by
a traditionally high level of productivity in the industrial sectors). The dynamic
effects of internationalisation and Europeanisation on the stability and
adaptability of industrial relations call for a major research effort. Stability and
adaptability and can be less and less confined exclusively to the national arena,
the reason for this being that, under conditions of an increasingly global economy,
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it is social institutions that become factors of stability and guarantee firms a high
degree of certainty of expectation.
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CHAPTER 6
The Development of Collective Bargaining
Collective Bargaining has been described as a method of determining terms of
employment and regulating the employment relationship, which utilizes the
process of negotiation between representatives of management and employees
and results in an agreement which may be applied uniformly across a group of
employees. The process of collective bargaining is a series of negotiations,
diplomatic and political manoeuvres, with the influence of economics. Collective
bargaining is a method used by trade unions to improve the terms and conditions
of employment of their members, it seeks to restore the unequal bargaining
position between employer and employee.
Collective bargaining leads to an agreement, it modifies, rather than replaces, the
individual contract of employment, because it does not create the employer-
employee relationship. Collective bargaining is not equivalent to collective
agreement because collective bargaining refers to the process or means, and
collective agreements to the possible result of bargaining. Collective bargaining
may not always lead to a collective agreement, the process is bipartite, but in
some developing countries the state plays a role in the form of a councilor where
disagreements occur, or where collective bargaining impinges on government
policy.
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The ILO Convention and Collective Bargaining
Collective Bargaining appears to be a simple concept, but its application can take
an almost infinite variety of forms. The International Labour Organisation
adopted a new Convention, No. 154, and it defined collective bargaining as
follows:
“For the purpose of this Convention the term ‘collective
bargaining’ extends to all negotiations which take place
between an employer, a group of employers or one or more
employers’ organizations, on the one hand, and one or more
workers’ organizations, on the other, for –
(a) determining working conditions and terms of
employment, and/or
(b) regulating relations between employers and workers,
and/or
(c) regulating relations between employers or their
organizations and a workers’ organization or workers’
organizations.
Notwithstanding this definition national law or practice may determine the extent
to which the term collective bargaining shall also extend, for the purpose of the
Convention.
In an industrial relations system that is predominantly voluntaristic, collective
bargaining processes such as recognition, the collective agreement and industrial
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action are likely to be based on a gentleman’s agreement made acceptable by
custom and practice. Voluntarism has lost ground in the Caribbean and most
industrial relations system have legislation covering recognition, the collective
agreement, the formation and structure of bargaining units and the management of
industrial action.
Many Caribbean States have ratified the main International Labour
Organization’s Conventions on collective bargaining, which includes:
 Convention No. 87, concerning Freedom of Association and Protection of
the Right to Organize,
 Convention No. 98, concerning the Application of the Principles of the
Right to Organize and Bargaining Collectively, and
 Convention No. 151, concerning the Protection of the Right to Organize
and Procedures for determining conditions of Employment in the Public
Sector,
All Caribbean countries have developed a legislative and institutional framework
supportive of collective bargaining.
Bargaining in Good Faith
A pluralistic outlook involves the acceptance within a political system of pressure
groups with specific interests with which a government has dialogue, with a view
to effecting compromises by making concessions. Pluralism implies a process of
bargaining between these groups, and between one or more of them on the one
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hand and the government on the other. It therefore recognizes these groups as the
checks and balances which guarantee democracy. It is natural that in labour
relations in a pluralist society, collective bargaining is recognized as a
fundamental tool through which stability is maintained, while the freedom of
association is the indispensable condition, because without the right of association
the interest groups in a society would be unable to function effectively. There can,
therefore, be no meaningful collective bargaining without the freedom of
association accorded to both employers and workers.
Collective Bargaining takes place within a social framework, not in a vacuum. No
proper collective bargaining at all can take place unless certain basic conditions
are present. The most fundamental is that workers must have the right to form and
join organizations of their own choosing. A further requirement is that both sides
must bargain in good faith. The general idea is that each side should be prepared
to listen to, and take into account the arguments produced by the other side.
Further, each side must endeavour to ensure that an agreement, once concluded, is
respected by all concerned. Both the employer and the workers must try, in good
faith, to make the agreement operative. The political climate is also important.
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CHAPTER 7
The Steps to Collective Bargaining
The first step in the collective bargaining process is that of organizing a group of
workers, gaining recognition and developing a body of proposals to submit to the
employer as the basis of a collective agreement. The development of proposals to
be submitted on behalf of workers is a delicate process over which great care has
to be taken. Bargaining relationships may be characterized as distributive or
integrative.
Distributive bargaining includes containment/aggression, power abuse and
ideological posturing. Integrative bargaining relationships vary. The recent
emphasis on performance-related pay systems at the micro-level, and of social
partnership at the national level are good examples of integrative bargaining
relationships. There are less savoury bargaining relationships which fortunately
are not significant in Caribbean collective bargaining practices. These include
deal making, where secret negotiations are made between leaders with little
involvement from the rank and file, collusion, where employers and unions agree
to control labour prices, and racketeering, characterized by corrupt practices.
The Role of the Law in Collective Bargaining
Opinion is divided within the trade union movement as well as elsewhere, as to
whether the law should play a major role in collective bargaining. In certain
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quarters previous views on the subject are being revised in the light of national
and international experience. It would be impossible in these circumstances, to
include any precise guide-lines. It is said, in support of legal intervention, that
where trade unions are comparatively weak and their leaders inexperienced the
law should be there as there protection. In the absence of laws governing
collective bargaining, it is argued that employers cannot be relied upon to respect
worker’s rights.
In the event of a dispute over the interpretation and implementation of collective
agreements, some workers fear that the employers have too much power, whereas
the trade unions have neither the financial strength nor the expertise which they
need. The law is therefore regarded as a supporting force. The law can serve as a
protector of trade union rights, but it can also restrict, and even remove those
rights. One of the essential functions of a trade union movement is to ensure, as
far as possible, that the law is a friend of the workers, not their enemy. A
distinction should be made between the establishment by law of an institutional
and procedural framework for collective bargaining, which may be helpful to the
trade unions, and state interference in the substance of collective bargaining,
which is usually not helpful at all.
Communication and Collective Bargaining
Communication is important in collective bargaining, both the management and
union should keep their managers and members respectively well informed.
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Collective bargaining has the advantage of settlement through dialogue and
consensus rather than through conflict and confrontation. Some other advantages
are:
 its agreements often institutionalize settlement through dialogue,
 it is a form of participation,
 its agreements sometimes renounce or limit the settlement of disputes
through trade union action,
 it is an essential feature in the concept of social partnership towards which
labour relations should strive,
 it has valuable by products relevant to the relationship between the two
parties,
 in societies where there is a multiplicity of unions and shifting union
loyalties, collective bargaining and consequent agreements tend to
stabilize union membership,
 it usually has the effect of improving industrial relations.
Collective bargaining may take place at the national, industry or enterprise level.
In no country does it take place exclusively at one level only. However, in many
industrialized countries the existence of strong employers’ organizations and trade
unions have resulted in many important agreements being concluded at the
national or industry level, supplemented by some enterprise level bargaining.
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Public Sector Bargaining
One of the most sensitive areas of collective bargaining is in the public sector.
Wage settlements for public sector workers have a major impact on the level of
government expenditure and on wages in other sectors of the company. The state
has traditionally been a large employer of labour in the Caribbean. Civil Service
Associations, which became later transformed into Public Sector Unions,
recruited wide band of members. It is usual for distinct employment areas in the
public service to have their own unions, thus teachers and nurses are likely to
have their specific unions. Where the government has to negotiate with competing
unions over the same collective agreement, it is difficult for all the unions to have
convergent negotiating positions, especially where union rivalry for membership
is an important issue.
Public Service negotiations are very significant for national and macro-economic
policy. The Caribbean island states have been forced to divest and privatize many
of the businesses which they have nationalized in the 1960s and 1970s. Public
Sector reform is currently a major issue facing trade unionists in the public sector.
Trade unionists and negotiators in the public sector have an onerous task of
learning and understanding a great deal of laws and regulations and have to
develop the patience and skills to plough through much red tape and bureaucratic
hindrances to solve their problems.
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CHAPTER 8
The Collective Agreement
A Collective Agreement is an agreement in writing between an employer and the
union representing the employees which contains provisions respecting conditions
of employment. It covers rates of pay, hours of work, working conditions, fringe
benefits, rights of workers and grievance procedures and the rights and
obligations of the parties to the agreement. It’s a written contract which covers all
employees in the bargaining unit, both union members & non-members.
Ordinarily the agreement is for a definite period such as one, two, or three years,
usually not less than twelve months. The collective agreement is reached through
the collective bargaining process, i.e. the process of negotiations between the
parties involved. Negotiations apply to a particular process of dialogue between
people to resolve their differences and reach an agreement. In industrial relations
this is conducted primarily through representatives of management and
employees.
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CHAPTER 9
Application of Collective Agreements
The IRA requires that collective agreements contain effective provisions for the
settlement of disputes, including differences between the parties arising out of the
interpretation, application and violation of collective agreements, with the
Industrial Court as the final arbiter. Collective agreements usually also contain
provisions for wages, leave entitlements, severance pay, travelling and other
allowances.
Any collective agreement which governs a bargaining unit applies to every
worker in that bargaining unit, whether that worker is a member of the recognized
majority union or not. The provisions of a collective agreement become the terms
and conditions of employment of each employee's contract whether or not that
employee even knows of the existence of the agreement. Any provision in a
collective agreement which limits the application of the IRA or which promotes
preferential treatment for members of a particular union is void. Once a
collective agreement has been registered every member of the respective
bargaining unit is entitled to be protected by it.
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The IRA also provides that where a trade union has attained certification as the
recognized majority union the employer must recognize that union and is obliged
to meet and treat with that union. Both parties have a duty to bargain in good
faith.
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CHAPTER 10
The Negotiation Process
Negotiation is an industrial relations mechanism that is in essence the same as
collective bargaining, the two are entwined. The principles applicable to
negotiations are relevant to collective bargaining. Negotiations are for the benefit
of several employees and therefore have a collective interest. In negotiations in
non-employment situations, collective interests are less, except when states
negotiate with each other. In labour relations, negotiations involve the public
interest, such as where the negotiations are on wages which can impact on prices.
Governments intervene when necessary in collective bargaining because the
negotiations are of interest to those beyond the parties themselves. Negotiations
take place in the background of a continuing relationship, which ultimately
motivates the parties to resolve the specific issues. The existence of the freedom
of association and a labour law system are essential conditions in the collective
bargaining process, for both the employers and workers.
Recognition
In order for there to be meaningful negotiations between employers and workers,
the recognition of unions is fundamental. However, the freedom of association
does not necessarily imply that unions would be recognized. The accepted
principle in an industrialised system where there is a multiplicity of trade unions,

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is to recognize the most representative union. The criteria followed for this
process varies from system to system, in most cases it is determined by requiring
the union to have not less than a stipulated percentage of workers in the enterprise
in its membership. The representativeness may be decided by a referendum in the
workplace or by a certifying authority, such as a labour department or a statutory
body. Conditions may be applied to the bargaining agent so as to ensure stability
of the process.
Planning and Strategy
A party wishing to arrive at a satisfactory conclusion or arrangement through
collective bargaining negotiations should first identify the objectives they wish to
achieve. The parties should plan to achieve these objectives, by formulating a plan
that can be modified during the course of the negotiations. Negotiations on the
union’s demand are generally an ideal setting in which management can achieve
some of its objectives through agreement. In order to achieve this the
management must be clear about its own priorities. If there is an existing
collective agreement it would be a useful starting point, the agreement can be
analysed and its advantages and disadvantages can be determined.
The Negotiating Team
The negotiating team and the respective roles of each member should be
determined before the negotiations. Since negotiations may not proceed or take
place in the way a party may plan, there should be alternative options provided. A
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party to collective bargaining negotiations has to formulate a strategy for all
stages of the negotiation, including the pre-negotiation stage.
There is no set rule as to who should open the negotiations. However, it is not
unreasonable for the management to claim that if the union has initiated the
negotiations, it should first outline its rationale and justification for doing so.
However, the management should make it clear at the beginning that an
agreement on any particular issue of the negotiations is subject to an overall
settlement, including its own expectations from the union.
During the negotiations there should be good internal communication between the
company and its managers, and between the union and employees, about the
situation at any given time. This will help clarify misunderstandings and even
eliminate disinformation especially where employees, as happens in developing
countries, seek information or clarification from their representatives.
The Negotiator
A good negotiator should view negotiations as an exercise with both parties
working towards a common ground, keeping in mind that the final objective is a
satisfactory agreement. A negotiator should be good at listening, either party
should attempt to build its cases in a logical sequence, and try to obtain agreement
at each stage of the process, as far as possible. Counter proposals and conditions
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attached to concessions should be indicated as early as possible, so that the basis
on which a party is prepared to agree or compromise is understood.
It is usually preferable to avoid taking up, in the beginning, the position that a
particular item is not negotiable. It is more productive to request a party to justify
its claim, and then point out why that claim may be unreasonable. Taking a non-
negotiable position can lead to the perception that the position has nothing to do
with the merits and that the party is not willing to listen. Skillful questioning is an
effective way of compelling the other party to justify its claims on the merits of its
negotiations.
Completing Negotiations
The termination phase of the negotiations is just as important as the preparation
and encounter phases. At this point either party can experience lapse in
judgments, on issues previously not agreed to, thus it is important for the
negotiator not to regard the dialogue phase to be completed until all issues have
been satisfactorily resolved and both negotiators agree there are no further issues
to be considered.
The objective of the final stage of the negotiations is to ensure that the two
negotiators have a common perception of the content and terms of their
agreement, and putting them in a formal written agreement to be signed by both
parties to the negotiations. Both parties should ensure that the negotiations are
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followed by a joint communication of its terms to all their principals, employees,
members and management. The agreement is for their use and therefore they
should be aware of its details.
The most difficult part of the negotiations arises when there is an evident failure
to agree between the two parties. Negotiators must be prepared to recognize when
they have exhausted all possibilities of concession and compromise and that
further negotiation on the issue is more likely to lead to entrenched and
antagonistic attitudes than a resolution of the problem. This situation involves
identifying the final positions and the exact extent of the disagreements of the
parties. This identifies the issues to be further examined and renegotiated,
probably at a higher level, e.g. the Industrial Court or other legislated governing
body.
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Conclusion
Collective agreements can take many forms according to circumstances. The
simplest form is referred to as a “gentleman’s agreement”, in which the employer
and the representative of the workers shake hands at the end of the negotiations.
Despite the fact that many unwritten agreements have proved useful and adequate
in the past, it is probably better for all concerned to set the agreement down in
writing. The formulation of the agreement will be influenced by a number of
factors, not the least important of which is the legal framework. In many countries
the law provides that collective agreements are legally enforceable, but in a small
number of countries this is not the case.
The current mechanism for the binding extension of sectoral collective
agreements (to non-signatory employers and employees) contributes to
maintaining stable industrial relations. However, it is necessary to review
critically which provisions of collective agreements are deemed eligible for
extension or not. Companies should also have sufficient opportunities for
exclusion from such extensions, and periodic assessments must be carried out of
the whole extension system.
Although the government's document says little about collective bargaining in
general, the government is concerned about the issue of extension. In late June
2004, Minister De Geus expressed the government's view that the extension of
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collective agreements cannot be at the expense of the public interest. The
government had announced earlier that it would desist from extending collective
agreements if the current wage moderation ended or if new collective agreements
included provisions about supplementing sickness benefits during an employee's
second year of absence.
The importance of customising, decentralising and individualising terms and
conditions of employment are often stresed. According to the employers'
organisation, collective agreements should in future be limited to key subjects and
contribute towards a 'sensible' wages policy, increasing productivity and
motivating employees. It should also remain possible to exclude employees at the
top end of the labour market (eg senior managers) from collective agreements.
Individual position-related contracts should apply to these employees.
With the exception of wage trends, the government makes no comment in its
document on collective bargaining related to terms and conditions of
employment. The International Labour Organisation (ILO) has in the past
reprimanded previous governments on this score, arguing that such 'interference'
infringes on the bargaining room available to the social partners.
Collective agreements have become so complicated that the ordinary worker is
discouraged by their length alone. There is a further important consideration, that
the more you put into an agreement, the greater the possibility of conflict over its
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interpretation and application. It is clearly not in the interest of the workers that
industrial relations should be nothing more than a contest between rival teams of
lawyers. However, as the scope of collective bargaining widens, and the subjects
become more complex, there is a tendency for agreements to become longer and
more difficult to understand. Collective agreements should be written simply,
clearly and as briefly as possible, so that both workers and employers are in no
doubt as to what they say.
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Bibliography
1. Bulmer, S.: “The governance of the European Union: a new

institutionalist approach”, Journal of Public Policy, Vol. 13 (4), 1994, pp.
352-80.
2. Brussels, ETUI 1999: The Europeanisation of industrial relations in a

global perspective.
3. Lennox Marcelle: “Changing Patterns of Employment in Trinidad and

Tobago and the Legal Implications”, The Forum, a Quarterly Publication
of the Ministry of Labour, June 1997.
4. Michael Salamon: “Industrial Relations Theory and Practice (2000)”,

Pearson Educational Limited, Edinburgh Gate, Harlow, Essex CM20 2JE,
England.
5. Robert L. Morris: “New Issues In Collective Bargaining (2002)”, Port

Of Spain, International Labour Office.
6. Roop L. Chaudhary: “Studies in Caribbean Labour Relations Law”, 2nd

Edition, Coles Printery Limited, 1984.
7. European Foundation For The Improvement Of Living And Working

Conditions: http://www.eiro.eurofound.eu.int/
8. ILO: Collective Bargaining (1986), International Labour Organisation,

Geneva
9. Lecturers: Notes and Handouts.
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STUDENT DECLARATION
I, REGINALD ROSE, submit the Thesis/Report, in three (3) copies, entitled as
below, in Partial Fulfillment of The Associate of Arts Degree, in accordance with
all of the Bylaws, Rules, Regulations, and Guidelines of the Cipriani College of
Labour and Cooperative Studies.
I certify as follows:
a. That the Thesis/Report being presented is my own account, based upon
work that I actually researched, and that all sources of material not
resulting from my own observations, analyses, or experimentation have
been clearly indicated;
b. That areas of the Thesis/Report which contains quotations from published
or unpublished sources, or duplications of same, have been clearly
acknowledged as such;
c. That any specific direction or advice received as to the conduct of the
work is properly acknowledged;
d. I understand that the Thesis/Report becomes the property of the College
upon submission.
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 Student Last Name: Rose
 Student First Name(s): Reginald
 Student Identification Number: 2004030908
 Programme/Department of: Labour Studies
 Course Number and Course Title:
LBS 260 – Research/Thesis Project
 Thesis/Report Title: The Impact of Globalisation on the
Collective Bargaining Process in Trinidad and Tobago
(A Theoretical Perspective)
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 Date of Submission of Thesis/Report: Friday 20th October,
2006
 Name of Lecturer(s) Receiving Thesis/Report:
1. Mr. Darius Figuiera
2. Mr. Lesmore Frederick
 Normal Signature of Student:
 Date of Student Signature: 20th October, 2006
 Student Comments, if any:
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CIPRIANI COLLEGE OF LABOUR

ASSOCIATE OF ARTS DEGREE

Module: Research / Thesis Project

Student Identification: 2004030908

A Thesis presented to the Department of Labour Studies

Associate of Arts Degree

Churchill Roosevelt Highway

Bargaining in Good Faith 27

National systems of industrial relations are embedded within national institutional

internal and external challenges. However, in the light of Europeanisation and

to look at the impact of globalisation and European integration on industrial

relations, with specific attention to the Collective Bargaining process, within

Trinidad and Tobago, and by enlarge the Caribbean Region.

themselves being ‘Europeanised’, within a framework that provides an overview

of the connections between globalisation, European integration and the various

processes of economic and social modernisation which are influencing changes in

societies. It finds that the pressures of globalisation, in particular the

internationalisation of finance capital and integrated production, have changed the

capital, which enjoys increased exit options.

Developments in both national systems of industrial relations and at the European

the Europeanisation of industrial relations are considered: the European social

dialogue, European works councils, European coordination of collective

European economic, social and employment policies.

An approximation of European systems to American or Japanese models can be

capitalist models (workplace agreements in concession bargaining, etc.) could not

actors, and on account of longstanding preferences of the continental European

CME -- models, far-reaching Americanisation or Japanisation is unlikely.

European Coordination of Collective Bargaining

to be met by European countries if they wish to become full members of the

2) a national budget deficit close to or below 3 % of gross national product, and

3) public debt not exceeding 60 % of gross national product) in the framework of

a common European currency have brought greater transparency concerning the

various components of wage costs, thereby increasing cost-based competition

stronger coordination of collective bargaining policy.

In this context a Europeanisation of industrial relations has been developed with a

view to achieving the cross-border coordination of collective bargaining. To date,

however, little research has been conducted on these early attempts at

coordination. Extremely diverse views are expressed in the literature regarding

the possibilities for development of a European coordination of collective

bargaining. While the pessimistic position particularly stresses the economic,

social and organisational type of coordination, the optimistic variant places

the national trade unions will have to take account.

Central problems associated with the development of a coordinated collective

apart from language and communication problems the diversity of organisational

and political structures, as well as of organisational cultures, and the attendant

problems of coordination (between rank-and-file level, the national and the

European level). The first trade union endeavours to achieve a coordination of

policies has not yet been empirically investigated.

political environment within which the system develops, especially if a corporatist

ideology is dominant. National institutions also influence the level of bargaining

national collective bargaining is diverse and complex (McIlwee, 2001).

the mid-seventies. The progressive internationalisation of the economy and the

structural change and the introduction of post-Fordist production methods, along

with the accompanying external and internal flexibilisation of firms (global

sourcing and just-in-time production), have significantly affected the operation of

significant convergence of collective bargaining systems, which continue to

characterised by a deep capacity for inertia.

This economic dynamic is accompanied by increasing demands for flexibility and

systems continue to be maintained at sectoral level, in order to fulfill their

function as a condition of stability, without at the same time counteracting the

demands for greater flexibility and adaptability?