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Collective Bargaining

ever, the traditional style of negotiating is still used effec- THE SETTLEMENT PROCESS
tively in bargaining many union contracts. Union contracts are usually bargained to remain in effect
The partnership style of bargaining is the more mod- for two to three years but may cover longer or shorter peri-
ern approach to negotiations. It strives for mutual under- ods of time. The process of negotiating a union contract,
standing and common education on the part of both however, may take an extended period of time. Once the
labor and management, and it focuses on goals and con- management and union members of the negotiating team
cerns common to both parties. Because of its emphasis come to agreement on the terms of the contract, the
on each side’s being aware of the issues concerning the union members must accept or reject the agreement by a
other side, partnership-style bargaining is also known as majority vote. If the agreement is accepted, the contract is
interest-based bargaining. In this process, labor and man- ratified and becomes a legally binding agreement remain-
agement each list and explain their needs, and the ensu- ing in effect for the specified period of time.
ing discussion revolves around ways to meet those needs If the union membership rejects the terms of the
that will be not only acceptable but also beneficial to agreement, the negotiating teams from labor and manage-
both parties. This style of bargaining is very positive and ment return to the bargaining table and continue to nego-
imparts a much more congenial atmosphere to the tiate. This cycle can be repeated several times. If no
negotiating process. Many modern union-management agreement can be reached between the two teams, negoti-
contracts are bargained very successfully using the part- ations are said to have broken down, and several options
nership style. become available.
A blending of the traditional and partnership styles is Mediation is usually the first alternative when nego-
widely used in labor-management negotiations. The com- tiations are at a stalemate. The two parties agree voluntar-
bination approach is used for many reasons, including the ily to have an impartial third party listen to the proposals
fact that many union and management leaders are more of both sides. It is the mediator’s job to get the two sides
familiar with the traditional style. However, with today’s to agree to a settlement. Once the mediator understands
more participatory relationship between labor and man- where each side stands, he or she makes recommendations
agement in the workplace, the partnership style is becom- for settling their differences. The mediator merely makes
ing more accepted and is being used more frequently. The suggestions, gives advice, and tries to get labor and man-
negotiating process may also include both styles of bar- agement to compromise on a solution. Agreement is still
gaining because of the variety of issues being negotiated. voluntary at this point. The mediator has no power to
The partnership style may be used to negotiate certain force either of the parties to settle the contract, though
issues, while the traditional style may be invoked when often labor and management do come to agreement by
bargaining other terms. using mediation.
If mediation fails to bring about a settlement, the
COLLECTIVE BARGAINING ISSUES next step can be arbitration, which can be either compul-
Labor unions were formed to help workers achieve com- sory or voluntary. Compulsory arbitration is not often
mon goals in the areas of wages, hours, working condi- used in labor-management negotiations in the United
tions, and job security. These issues still are the focus of States. Occasionally, however, the federal government
the collective bargaining process, though some new con- requires union and management to submit to compulsory
cepts have become the subjects of negotiations. Table 1 arbitration. In voluntary arbitration, both sides agree to
lists the issues most often negotiated in union contracts. use the arbitration process and agree that it will be bind-

Collective bargaining issues

Wages Hours Working Conditions Job Security
Regular Compensation Regular Work Hours Rest Periods Seniority
Overtime Compensation Overtime Work Hours Grievance Procedures Evaluation
Incentives Vacations Union Membership Promotion
Insurance Holidays Dues Collection Layoff
Pensions Recall

Table 1

122 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION