Stage 3 - The Negotiation Process

LW1210 – Labour Law in
Stage 3 - Negotiating a Collective Agreement
Paul Tilley
Collective Bargaining
 the negotiation between representatives of workers and
employer(s) establish terms & conditions of employment that are
acceptable to both sides
 power in numbers is the philosophy behind unions and collective
 single unskilled or semiskilled workers are easily fired and replaced
Collective Bargaining
 union and management try to reach an agreement on such issues as pay,
pensions, workload and holidays
 once an agreement is reached a contract called a collective agreement
is signed by both sides that state the terms of the agreement and how long
it is in effect
How Do Negotiations Work?
 At the first joint bargaining meeting, the teams
exchange written proposals and demands, and decide
when the next joint meeting will be
 Each negotiating team then holds its own private
meetings to formulate a response
 At the second and subsequent joint meetings, each
team makes counter-proposals and uses a variety of
strategies and tactics to uncover the other team’s goals
and priorities
 These meetings continue until an agreement is reached
or an impasse is declared
How Do Negotiations Work?
 When an agreement is reached, each team must go to
its constituency or stakeholders and obtain their
 If an impasse is declared the parties may:
 Take a short break
 Ask for third-party intervention
 Undertake a strike or lockout
 Each of these actions is intended to make the parties
return to the bargaining table so an agreement can be
3 Phases of Collective Bargaining
Phase 1
Phase 2
Phase 3
Approving the
Stages of Union-Management
Negotiations Phase 1
 Pre-negotiation Stage
Each side determines its priorities, goals and ultimate
proposals for the upcoming negotiations; some
proposals are considered essential, while others may
be traded or “dropped off the table” once
negotiations have begun
It is common for the two sides to meet jointly during
this stage to sound each other out informally on
negotiating protocol and procedures
Establishing the Bargaining Range
 This stage typically begins at the first formal bargaining
 Both parties introduce their bargaining team members
and present their proposals
 Usually, the chief negotiator for each side orally presents
the rationale for each proposal to the other side
 While these are usually forceful presentations,
experienced negotiators know that bargaining will not
proceed smoothly if the negotiators alienate each other
at the first meeting
Establishing the Bargaining Range
 Purposes of oral presentations:
 Establish the bargaining range
 Demonstrate each side’s degree of commitment
 Provide an opportunity for each side to explain the reasoning
behind its proposals and thereby influence the perceptions and
expectations of the other side
Narrowing the Bargaining Range
 The zone of agreement dictates each side’s decisions in narrowing
the bargaining range and, ultimately, whether the parties reach an
Narrowing the Bargaining Range
 Each team enters negotiations with an initial offer
and a bottom line position for each proposed item
Initial offer – first proposal given to the other side
Bottom line – absolute minimum the team would be
willing to accept
 During this stage, both sides start to retreat from their
original positions in an attempt to find a point where
a mutually satisfactory resolution can be reached
Narrowing the Bargaining Range
 Terms that do not meet the other side’s bottom line
will not be accepted – if there is no zone of
agreement, either there will be no settlement or
each team will have to adjust its bottom line
 The timing of counter-proposals and concessions is
crucial during this stage; both sides must exhaust
their arguments for their own positions
 This is often the longest of all the bargaining stages
As Negotiations Proceed…
 Now that we have seen how the negotiation process
starts, we turn our attention towards the latter phases
where one of two outcomes can Occur:
 POSITIVE: Negotiations take place in good faith and an
agreement is reached without any assistance or job action
 NEGATIVE: An impasse occurs, good faith diminishes, and the
collective bargaining process looks as if it may end in failure and
possible job action
What is Good Faith?
 Both union and employers are required by law to
bargain in good faith
 Good faith means that both sides must submit their proposals,
consider each others proposal, articulate arguments in favour of
their respective proposal and against the other’s position and
search for common ground in a serious attempt to reach an
Negotiations take place in good faith and an agreement is reached without any assistance or job
 Most negotiations proceed and conclude successfully
 Once an agreement is reached both sides need to ratify the agreement
and then sign it.
 Ratification is necessary once terms are agreed upon
 The teams return to their constituencies and present the negotiated terms
for approval
 The union will generally conduct a membership vote and management will
review the agreement with all relevant stakeholders
 The agreement is then binding on each side for the negotiated term of the
An impasse occurs, good faith diminishes, and the collective bargaining process
looks as if it may end in failure and possible job action
 Bad Faith, poor communications, and vast distances between each side’s
respective goals lead to trouble in negotiations.
 Before a strike or lockout there are measures that are, or can be taken to
break the impasse.
What Constitutes Bad Faith
 Refusing to meet
 Refusing to recognize the duly elected union by the employer
 Not giving the negotiation team the power to bargain
 Superficial attempts to bargain “Surface Bargaining”
 Misleading or lying – Deception
 Withholding important information
 Deliberately provoking the other side
 Refusing to justify a position
 Refusing to make every reasonable effort to enter into a Collective
What happens if both sides can’t
 Third Party Assistance - Conciliator
 At any time after the “notice to bargain” letter is issued by the union, either party
can request the Minister of Labour for the assistance of a government conciliator.
 The conciliator confers with both parties and within 14 days after being so
instructed or within the period that the minister may allow, makes a report to the
minister setting out:
 the matters upon which the parties have agreed;
 the matters upon which the parties cannot agree;
 a statement as to the advisability of appointing a conciliation board with a view to
effecting an agreement.
 There can be no strike or lookout before this step is complete.
What happens if both sides can’t
agree? (2)
 Third Party Assistance – Conciliation Board
 If a conciliation officer fails to help the parties reach an agreement or in a case
where the minister considers it desirable to do so, the minister may appoint a
conciliation board for the purpose of trying to bring about an agreement
between the parties.
 A Conciliation Board consists of a chairperson and 2 members, one appointed
by management, the other by the union
 The 2 appointed members must within 5 days nominate a 3rd person who is
willing and ready to act to be a member and chairperson of the conciliation
 The full board has 14 days to report its findings and recommendations to the
What happens if both sides can’t
agree? (3)
 Third Party Assistance – Mediation
 Mediation is another type of third party assistance that is similar to
conciliation, however it:
 Does not involve a government conciliator, instead the mediator is mutually
selected by each side.
 Is not mandatory
 Can occur at any time in the negotiating process
 There are two advantages to a mediator over a conciliator:
 Both sides had a role in selecting the mediator
 s/he can work with the parties through the dispute
What happens if both sides can’t
agree? (4)
 Third Party Assistance – Fact Finding
 Fact finding involves a third party person being called in to investigate the
situation and then report the facts.
The Practice of Conciliation/Mediation
 The C/M meets with the parties together to hear the issues.
 The C/M meets with the parties individually to access their “movement
 The C/M may suggest possible solutions to the parties
 The C/M may suggest creating subcommittees to address specific issues
 The C/M assesses the opportunity for an agreement and if s/he feels one is
possible s/he works to put pressure on the parties to seek a settlement.
Third Party Determination
 A third party can be brought in to decide on the terms and conditions of
 This is know as Interest Arbitration
 Interest Arbitration is rarely used because the power to decide the cost and
benefits of an agreement is left in the hands of an outsider.
 Most Interest Arbitration is Voluntary, however in some cases, in some work
locations it is compusury (normally in essential services)
 First Contract Arbitration (FCA) is a statutory mechanism that allows either
party in unsuccessful negotiations to apply to the Labour Board to direct
the settlement of a first collective agreement by arbitration.
Industrial Actions
 Work-to-rule
 Boycott
 Sit-Down Strike
 Notice to potential job applicants
 Legal/Illegal Strikes
 Legal/Illegal Lockouts
 Strike Breaking
 Picketing (Primary/Allied/Secondary)
 Injunctions
Conciliation & Mediation
 Conciliation
 A government-appointed third party attempts to
bring together the parties to reach agreement
 In most provinces, a strike is not permitted before
conciliation efforts
 Mediation
 Disputing parties voluntarily choose to reconcile
their differences through a third party
Common Contract Provisions
 Union shop
 Employers may hire anyone they want, but all
workers must join the union within a specified
 Dues check-off
 Employer required to deduct union dues
 Seniority
 Length of the worker’s employment
 Discipline
 “Just cause” is required to discipline or discharge
Administering the Agreement
 Grievance
 Complaint that some aspect of a collective
agreement has been violated
 Grievance procedures
 Most collective agreements include formal multi-step
procedures to resolve grievances
 Arbitration
 Used to resolve a grievance when an acceptable
solution cannot be reached
Managing in a Union Environment
Unions impact the HRM function:
 HR department may expand to add labour
relations specialists
 Greater centralization of employee recordkeeping and discipline to ensure uniformity
 Management has less freedom to make
unilateral changes
Labour-Management Cooperation
 Organizational performance is enhanced
when labour and management cooperate
 Cooperative methods include:
 Prior consultation
 Sincere concern
 Training programs
 Joint study committees
 Third parties