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Collective Bargaining (Employer Guidance)

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The following guide examines the process of collective bargaining from an employer’s perspective, from the different types of collective bargaining and union recognition within the workplace, to how best to approach collective bargaining negotiations with a recognised trade union.

 

1. What is collective bargaining?

Collective bargaining is the official process by which representatives of trade unions negotiate with employers on behalf of their members in respect of employees’ terms and conditions of employment. It is based on the premise that by working people banding together, much more can be achieved than by working alone to better employee benefits and rights at work.

Through collective bargaining negotiations, this will provide members with a way of securing pay increases and improving the terms and conditions of their employment and working conditions such as pay, working hours, holidays, or any other such matters that may be agreed between the parties.

Collective bargaining between employers and trade unions can range from negotiations on specific matters arising daily within the workplace affecting particular sections of the workforce, to extensive periodic negotiations on terms and conditions of employment affecting the whole workforce.

 

2. What is a collective agreement?

A collective agreement is the outcome of a collective bargaining process. This could relate to various issues under negotiation, such as wages or other terms and conditions of employment. This must be in writing, contain the date on which it becomes effective and be signed by the parties.

When an employer agrees that its employees can be represented collectively by a trade union, the contracts of employment for relevant workers should expressly incorporate all collective agreements. In this way, any agreement negotiated by the union will be automatically incorporated into their contractual terms and conditions so that individual workers benefit from the negotiated terms.

Collective agreements within the workplace can cover both union and non-union staff, as trade unions often negotiate on behalf of workers employed in a specific group, for example, all contractors. This group is known as the bargaining unit.

Once the collective agreement forms part of a contract of employment, this cannot be changed without further union negotiations. Failing to apply collectively agreed terms and conditions can be treated as breach of contract.

 

3. What are the different types of collective bargaining?

There are various different types of collective bargaining. The type of collective bargaining being utilised by the parties does not necessarily impact on any decision-making in practice, but it is still useful to understand the context in which workplace negotiations typically take place.

The main four types of collective bargaining, classified on the basis of their nature and objective, are as follows:

Conjunctive: where both parties seek to maximise their gains from the other’s loss, typically involving wages, bonuses and other employee benefits, where one party essentially wins over the other.

Co-operative: where both parties seek to resolve a problem with a common interest and reach an amicable solution, typically involving working terms and conditions, for example, during an economic crisis.

Productivity: where the employer seeks to increase productivity through employee incentives or bonuses, where both parties benefit equally, for example, from increased production and increased pay/benefits.

Composite: where the union raises concerns regarding various matters, typically relating to an employee’s job security or welfare – such as working conditions or disciplinary processes – and demands equity in such matters to safeguard their long-term interests.

 

4. Does an employer have to agree to collective bargaining?

Most collective bargaining arrangements in the UK are voluntary, where collective bargaining is only possible where an employer recognises a trade union and agrees that its members can be represented collectively.

Union recognition essentially refers to an acknowledgement by the employer that a union has the right to represent and negotiate on behalf of its members in a variety of different situations within the workplace.

Reputable employers recognise the benefits that come from voluntary union recognition, such as being able to negotiate wages and other contractual terms and conditions collectively for large groups of workers at the same time. Most employers are also readily prepared to recognise the existence of a trade union where there is significant support among the workforce.

Where an employer refuses to recognise a trade union voluntarily, the union may instead ask the CAC – the Central Arbitration Committee – to investigate the matter with a view to requiring the employer to officially recognise it. The CAC is the body that implements the law on statutory trade union recognition.

 

5. When is the process of statutory recognition applicable?

The process of “statutory recognition” can only be used to force an employer to recognise a trade union where the union has made a valid written request for recognition to the employer. The law provides a detailed statutory procedure, with time limits, for claiming recognition on application to the CAC.

In many cases, voluntary recognition will be reached without formal intervention following a valid request for voluntary recognition. Where an employer refuses to accept the request but indicates a willingness to negotiate, the parties may ask ACAS – the Advisory, Conciliation and Arbitration Service – to assist in conducting the negotiations via a formal conciliatory process.

In cases where either the employer fails to respond to the request within the specified statutory timeframe, informs the union that it does not accept the request without a willingness to negotiate or where ACAS negotiations fail, the union may apply to the CAC to decide the question of statutory recognition.

An application for statutory recognition will only usually be successful where the employer employs more than 20 workers and the union has the support of the majority of workers. This means that the CAC will require evidence of at least 10% membership in the relevant bargaining unit and be satisfied that a majority of workers are likely to favour recognition.

 

6. How should collective bargaining be run?

Once the employer agrees to recognise a trade union, either voluntarily or statutorily, an agreement will need to be put in place to determine how the collective bargaining process will operate and the scope of any negotiations.

Agreement will need to be reached to address various issues including:

  • The categories or grades of worker covered
  • The way in which union representatives will be elected
  • The matters to be discussed, such as pay, hours or holidays
  • The way in which any failures to agree these matters will be resolved
  • The timing and frequency of meetings
  • The availability of union facilities, such as office space or IT equipment
  • The time off to be taken by union representatives for union activities
  • The way in which discussions will work if more than one trade union is recognised by the employer

In circumstances where the CAC has declared that a trade union should be recognised, the parties will have a period of 30 days, or longer if they agree, to negotiate how collective bargaining will be run.

If agreement cannot be reached within the specified timeframe, either party may apply to the CAC to assist, where the CAC can impose a legally enforceable procedure on the parties specifying the method of collective bargaining.

In these circumstances, the law limits the scope of statutory recognition to bargaining over only ‘pay, hours and holidays’, although there is nothing to prevent the parties from voluntarily agreeing a wider range of workplace issues as the subject of collective bargaining. If an employer refuses to negotiate pay, hours and holidays, despite having an enforceable contract imposed by the CAC, an application can be made to the courts for an order of specific performance.

 

7. How should collective bargaining negotiations be approached?

Collective bargaining negotiations should always be approached with a clear understanding of the law and expert legal guidance, especially as the rules relating to an employer’s disclosure of information to a trade union to help with the collective bargaining process can be difficult to interpret.

The law provides that where an independent trade union is recognised by the employer, the union is entitled to be given certain information that is relevant to the issue under negotiation. The relevant information, and the detail and form in which it should be provided, will vary depending on the issue to be negotiated. The level at which the negotiations are to take place, for example, department, division or company level, the size of the company and the type of business in question will also play an important part in determining what is relevant.

Examples of relevant information can include material about an employer’s financial position in the context of a pay or employee benefits claim, or information about its profits, assets and liabilities within a redundancy situation.

 

8. What risks can arise from collective bargaining negotiations?

Failing to reach agreement through union negotiations can result in strikes, sit-ins and resignations, all of which can cause significant damage to a business and the reputation of the employer. Being able to effectively negotiate a collective agreement, and find a middle ground, can often be in the interests of everyone.

In an ideal world, collective bargaining negotiations will involve a simple meeting, or series of meetings, between the employer and trade union to discuss the terms and conditions of employment for the bargaining unit. The end goal is a collective agreement where both parties are happy with the agreed change.

In practice, however, collective bargaining negotiations can often present a series of problems, especially where an employer fails to disclose the relevant information to facilitate the bargaining process. Any union complaints alleging failure by an employer to disclose relevant information may be made to the CAC.

In some cases this may result in ACAS intervention and a process of conciliation. However, where conciliation does not lead to a resolution, the CAC will proceed to hear and determine the matter, making an order for disclosure. Any breach of this order could even result in an award of compensation against the employer.

Need assistance?

Given the complexity of collective bargaining, it is advisable for employers preparing to engage in a collective bargaining negotiation to seek expert legal advice from an employment law specialist.

Negotiating with a union can be a daunting and difficult process to navigate, so having a legal representative to guide you through this process can help to protect the interests of your business and ensure that you comply with your statutory duties to disclose the relevant information.

DavidsonMorris’ employment lawyers can help with all aspects of union relations and engagement, including collective bargaining and agreements. Working closely with our specialists in HR, we provide comprehensive guidance on how to navigate the negotiation process, while ensuring employee relations remain positive. For help and advice, speak to our experts.

 

Collective bargaining FAQs

What is an example of collective bargaining?

Collective bargaining refers to the official process by which trade unions negotiate with employers on behalf of their members in respect of employees’ terms and conditions of employment. An example of collective bargaining could be about a pay increase or change in working hours.

What is the role of collective bargaining?

The role of collective bargaining is to achieve agreement between an employer and a group of workers, or even the entire workforce, in relation to wages or others terms and conditions of the employment relationship.

What is trade union and collective bargaining?

A trade union will collectively represent a group of workers to negotiate improved terms and conditions on behalf of its members. The use of collective bargaining is based on the premise that more can be achieved working together.

What are the three models of collective bargaining?

There are various different models of collective bargaining, including the monopoly union model, the right to manage model and the efficient bargaining model. These models can be used to analyse the economic and other benefits from the use of collective bargaining between employers and trade unions.

 

Last updated: 17 May 2020

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