Lecture 12 Bargaining 2013

7/30/2019 Lecture 12 Bargaining 2013

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Employment Relations

Lecture 12: Bargaining


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References / reading

Employment Relations Act 2000 Haynes ,Oldfield, and Fryer (2006). New

Zealand Employment Relations Rasmussen, E. (2009) Employment Relations in

New Zealand, Chapter 14 (overview) Rudman, R. (2009) New Zealand Employment

Law Guide, Chapters 5&6 www.dol.govt.nz


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Topic Outline

Describe the legal framework and processesrelating to employment agreement bargainingand apply to factual situations.

Apply 'integrative' and 'distributive'negotiation strategies, and apply skills in thepractical processes of bargaining, includingsetting objectives, case preparation,

negotiation, conclusion and tacticalconsiderations. Negotiate an employment agreement.


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Defining bargaining Bargaining and negotiation are often seen as similar terms

Bargaining is more akin to competitive haggling over the price of labour but also terms and conditions. P407mutual dependence

Negotiation is a more formal process that occurswhen parties are trying to arrive at a mutuallyacceptable solution (Rasmussen)

Bargaining can be viewed as a group of strategieswithin a negotiation process ( Carrell and Heavrin)


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Wage bargaining in Nz 1894-1991: Most of this period wages were regulated

Awards set terms and conditions

1991-2000: Wage bargaining was largely unrestricted 1991 - 50% workers covered by multi-emp. awards 1999 - only 3%

>2000: ERA promotes collective bargaining and goodfaith behaviour However most workers continue to be covered by IEA

(Rasmussen)


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Theories of Collective Bargaining

Market theory Collective bargaining is a means to fix price of

labour a/c to supply & demand

Governmental theory Collective bargaining is a rule-making process

Managerial theory Views collective bargaining as a method of

management that includes unions


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Theories of collective bargainingRasmussen pp400-405

Interest-based bargaining (Fisher & Ury) Opposite view of bargaining as a

competitive process Principles

Separate the people from the problem Focus on interests not positions Invent options for mutual gain Use objective criteria


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Types of bargaining(after Walton & McKersie)

Distributiveor directbargaining

Integrativeor indirectbargaining


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Integrative or Co -operative bargaining Mutual-gains or win -win approach Assumes parties have common goals

Integrative bargaining process; Lewicki (2003)

1. Identify /define the problemParties exchange info. about the problem

2. Understand the problem

Identify common interests3. Invent options/solutions4. Evaluate and narrow solutions

Agree on a balanced solution

Behavioural theory of bargaining 1(after Walton & McKersie)


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distributive

or pressure or competitive bargaining Where direct conflicts of interest occur, win -lose

approach Gains by one made at the expense of the other

distributive bargaining process:1. Prepare for bargaining2. Bargain at the table

i. Preliminariesii. Discussioniii. Proposal and packagingiv. Settling

3. Post-settlement

Behavioural theory of bargaining 2(after Walton & McKersie)


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The practice of bargainingIssue Direct bargaining Indirect bargainingStrategy

Tactics

Examples


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What factors influence choice of bargaining strategy ?


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Negotiation strategies

The settlement range= the range of acceptable outcomes for each

party

Employer range....

$... 12.0012.5013.0013.5014.0014.5015.00

Employee range....


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Types of bargaining

Individual bargaining An employee negotiates their own EA with a

prospective employer

Collective bargaining The practice of determining wages and

salaries by negotiation between 2+employees, 1+ employees and 1 or moreunions


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Bargaining provisions under theERA

Part 5 of ERA covers collective bargaining Sets out

core requirements of good faith in collectivebargaining (s 32)

Rules governing how it is initiated, conductedand facilitated

Part 6 covers bargaining rules for individual not covered by CEAs


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GOOD FAITH BARGAINING



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Code of Good faithRasmussen pp409-411

Is a generic code that provides employersand unions with guidance to good faith incollective bargaining

Covers every stage of collectivebargaining

Includes a list of matters that parties areexpected to address (section 2.2)


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Code of Good faith

It requires that parties to bargaining are: active and constructive in establishing and maintaining a

productive employment relationship that they are responsive and communicative and use their

best endeavours to agree on an effective and efficientbargaining process meet together and to consider and respond to proposals to conclude a collective agreement unless there is a

genuine reason not to, based on reasonable grounds

You will need to print a copy out to study for assignment 2. See Course site: Topic 4- Bargaining - student handout or http://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-

of-good-faith.asp
http://ecampus.nmit.ac.nz/moodle/mod/resource/view.php?id=107660http://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://www.dol.govt.nz/infozone/collectivebargaining/1-introduction/code-of-good-faith.asphttp://ecampus.nmit.ac.nz/moodle/mod/resource/view.php?id=107660http://ecampus.nmit.ac.nz/moodle/mod/resource/view.php?id=107660http://ecampus.nmit.ac.nz/moodle/mod/resource/view.php?id=107660http://ecampus.nmit.ac.nz/moodle/mod/resource/view.php?id=107660


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When may bargaining be initiated ?

No CA anytime CA in place (s41)

Union within 60 days of expiry of agreement Employer within 40 days


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How is bargaining initiated ?Who may initiate ? (s40)

Union

Employer

By giving notice In writing Signed Identifying intended parties Identifying intended coverage


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Ratification of CA (s51)

Must follow procedure

Procedure notified to other parties

Unions can sign only after ratification


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Start / expiry (s52)

Starts As agreed or on last signature

Expires earliest of Date specified Specified event Third anniversary


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Mandatory requirements of agreements

s54 (CA)

s65 (IEA)


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Individual bargaining

Part 6 of ERA covers good faith in bargainingfor individual employment agreement

Under the ERA bargaining for individualagreements must be conducted in good faith


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Unfair individual bargaining (s68) s 68 defines unfair individual bargaining when a

person is induced to enter into the agreement by oppressivemeans, undue influence, or duress; or

lack of understanding of the agreement provisionsdue to

age, sickness; mental or educational disability, adisability relating to communication, emotionaldistress, or similar; or

no opportunity of seeking advice relies o the skill, care or advice of the other party;

AND Other party knew or ought to have known and stillwent ahead.

REMEDY Compensation, variation, as ERA thinks fit


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Options for new employees

The bargaining process for individualagreements will vary depending on:

1. CA exists but new employee not a unionmember 2. CA exists new employee is a union member 3. No CA exists regardless if union member or

not


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1. CA exists new Employee not aunion member Employer must inform Employee that

CA exists, covers work performed by Employee Employee may join the union How to contact the union Employee will be bound by CEA if join Provide copy of CEA If Employee agrees, inform union Ee has entered IEA

(s62)

For first 30 days all Employees have terms of CEA and additional benefits (s 63)


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2. CA exists Employee is unionmember

Automatically covered by CA (s56)

Can negotiate additional terms (s61)


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3. No CA union member or not

Before finalising, Employer must give Ee - Copy of intended agreement

Advice that employee may seekindependent advice A reasonable opportunity to seek that

advice


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BARGAINING IN PRACTICE



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Preparing for bargaining Use Code of good faith to ensure all matters

covered

Decide claims to pursue

Research arguments in support of own and likelyopposition arguments

Determine strategy Establish objectives Determine priorities

Establish settlement range Determine and rehearse tactics

Allocate roles to neg. team Softening up the opposition

e.g. Public statements


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At the table1. Preliminaries

Introduce team Agree of agenda Outline claims and broad arguments in support

2. Discussion

3. Proposing and packaging Propose solutions to issues in conflict Seek possible areas of compromise and conflict Packaging proposals

4. Settling


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Post settlement

Ratify procedures

Draw up and sign new document


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Passing on

ERA amended 2004 to make it a breachof good faith if emp. pass -on terms

agreed in CEA to other Employee or unionsBargaining fee clause can be added toCEANon union members can get same termsand conditions as those in the CEA if theypay a bargaining fee to the union

Documents

Lecture 12 Bargaining 2013