Chapter 7: Wage Issue Under the Collective Bargaining

Course: Labor and Industrial Relations

Chapter 7: Wage Issues under Collective Bargaining

Lecturer: Ol Ro,Group 3

1.Roeun Nakry 4. Meach Chansothea

2.Hong Sothary5. Phorn Dara

3.Mor Taimeang

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TableTable ContentContent

1. Collective Bargaining

2. Determination of the Basic Wage Rate Comparative Norms Ability to Pay Cost of Living

1. Wage Adjustment

2. Wage Differentials

3. Overtime and Flextime

4. Job Evaluation and Comparison

5. Concessionary Bargaining

6. Two-tier Wage Systems

1. What is Collective Bargaining?

the negotiation, administration, and interpretation of a written agreement between two parties, at least one of which represents a group that is acting collectively, that covers a specific period of time


There are four major issues deal with in collective bargaining :

1. Wage Related Issues 2. Employee Benefits or Economic Fringe3. Institutional Issues4. Administrative Issues

2. Determination of the Basic Wage Rate

• Comparative NormThe presumption that the economics of a

particular bargaining relationship should neither fall substantially behind nor be greatly superior to that of other employer-union relationships. Generally, it is good to keep up with the crowd, or to lead it if necessary.

2. Determination of the Basic Wage Rate Cont.

• Ability to Pay

Ability to pay has limited usefulness; focus is on firm performance, not on employee performance.

Unions expect a firm in good financial condition to pay higher wages, but not reduce wages when the condition of the firm declines.

2. Determination of the Basic Wage Rate Cont.

• Cost of Living

The firms have to think about the expending of the worker in order to consider how much to pay for them in a good wage.

Employees have to pay for housing expenses, utilities, food costs, transportation, taxes, , and healthcare. etc.

3. Wage Adjustment

There two primary methods of wage adjustment during the life of the contract: escalator clauses and wage reopeners.

1.Escalator clauses: The philosophy behind the incorporation, also know as cost of living adjustment provisions.

3. Wage Adjustment Cont.

2. Reopeners

Collective bargaining contracts require that the party that desires to change wages give a written notice to the other party within a specified period.

Wage and Price Control

Comprehensive government restrictions on the maximum rate at which wages and prices may increase during a specified time period.

4. Wage Differentials

Collective bargaining contracts provide for

different rate of wages for different employees

performing the same kind of work and holding

down the same types of jobs.

4. Wage Differentials Cont.

Wage differentials base on the consideration:

The degree of skill The strain of work Experience involves Period of time The responsibility of undertaken The disagreeableness of task

5. Overtime and Flextime

5. Overtime and Flextime Cont.

• Collective bargaining agreements

Fair Labor Standard

Pyramid of Overtime

Overtime premium



• How to calculate on overtime pay

1. Determine whether the individual is eligible for overtime.

2. Determine the hourly rate of pay, which is the total amount paid in the period divided by the number of hours worked.

3. Multiply the hourly rate of pay by 1.5


• Flextime: Is a scheduling arrangement that permits variations in an employee’s starting and departure time. This period call a core time.



6. Job Evaluation and Comparison

• Job evaluation is the systematic process for assessing the relative worth of job within an organization.

• Job comparison is in many cases, the manager’s answer to intransigent union opposition to job evaluation where this remain a force.

7. Concessionary Bargaining

Concessionary Bargaining

is a term used in labor law. It is a kind of collective bargaining in which the trade unions surrender or give back previously gained improvement in pay and condition in exchange for some from of job security.

7. Concessionary Bargaining Cont.


8. Two-tier Wage Systems

• A two-tier system is a type of payroll system in which one group of employees receive lower wage or benefit than another.

• The two-tier system of wages is usually established for one of three reasons:1. The employer wishes to better compensate more.

2. The employer wishes to establish a payment.

3. The employer wishes to reduce overall wage costs by hiring new employees at a wage less than current employees.

http://en.wikipedia.org/wiki/Performance-related_pay


SummarySummary

In conclusion, in this chapter focus about how employer and employee negotiate in wage issue.

There are three factors that determine the basic wage rate like comparative norm, ability to pay, and cost of living.

And we understand the two primary methods of wage adjustment during the life of the contract, wage differentials, overtime and flextime, and two tier wage system.


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Chapter 7: Wage Issue Under the Collective Bargaining