Navigating The Collective Bargaining Agreement Process

What does a collective bargaining agreement mean? This article covers Collective Bargaining, a process where trade unions and/or worker representatives negotiate and agree on employment terms and conditions, such as wages, with employers. The process involves preparation, discussion, and ratification, with four types: conjunctive, co-operative, productivity-related, and composite.

• How could collective bargaining impact your business?
• Which worker trade unions should you recognise?
• How should you work with such organisations?

Whilst data shows a marked decline in trade union membership across the UK, it is still important that employers know how to answer these questions, as they may need to recognise and negotiate with trade unions. This typically involves a collective bargaining agreement process.

In this article, Croner will discuss collective bargaining agreements, exploring the benefits of undertaking this process correctly for both companies and their employees.

• What is collective bargaining?
• The difference between collective agreements and workforce agreements
• The benefits of collective bargaining agreements
• Collaborating with trade unions
• If you don’t recognise an industry-related union
• Avoiding negotiation breakdowns
• How does collective bargaining work?
• Other conditions necessary for successful collective bargaining
• What is decentralised collective bargaining?
• What if an employer breaches a collective bargaining agreement?
• Main HR lessons to take from negotiating with unions
• Work with our experienced workplace mediators

What is collective bargaining?

Collective bargaining is type of collective industrial action. When trade unions and other employee representatives negotiate employment conditions with an employer(s), this is called collective bargaining.

Collective bargaining will occur when:

1. A relevant trade union and/or worker representative has been formally acknowledged by an employer.
2. Specific employment conditions are under dispute.

These conditions can include, but are not limited to:

• Balancing work and family life.
• Union rights and recognitions.
• Training and development.
• Health and safety policies.
• Annual and sick leave.
• Planned redundancy.
• Employment benefits (such as pension and sick pay (over statutory rights)).
• Working conditions.
• Higher wages.
• Working hours (variable shift patterns, fixed hours).
• Job security.

Whilst there is no specific UK collective bargaining law, the Trade Union and Labour Relations (Consolidation) Act 1992 covers a workers’ right to associate and negotiate the conditions above, collectively.

The difference between collective agreements and workforce agreements

It’s worth noting the difference between a collective bargaining agreements and workforce agreements; they are as follows:

Whilst a collective bargaining agreement pertains to agreed upon terms and conditions covered in the negotiation process, typically between an employer and a relevant representative, a workforce agreement pertains to employment conditions agreed upon exclusively between an employer and its workforce, i.e., no representative.

Examples of these types of conditions include:

• Flexible working arrangements (i.e. adjusted working hours for new mothers, or altered working procedures for disabled workers).
• Workload management practices.
• Training and development frameworks offered.

The benefits of collective bargaining agreements

As we've outlined above, trade unions/worker representatives typically negotiate conditions such as employee pay and working conditions with an employer. These negotiations function to achieve a mutually beneficial agreement between both parties. Further to this, collective bargaining benefit employers by sparing them further aggravation through strikes, walk outs, and mass resignations.

By ratifying a collective bargaining agreement and adding the terms to your contracts and policies, you avoid future labour-related disruption, such as those mentioned above.

Reach out to a Croner employment law specialist today to discuss how to undertake the collective bargaining process correctly. Call us on 0808 501 6651.

Collaborating with trade unions

As an employer, you may need to engage in the collective bargaining process. As we have explained, this will involve negotiating with relevant trade unions and/or representatives. To be eligible to undertake this process, employers must, by law, formally recognise an applicable union first. This happens through either:

• A voluntary recognition: The union(s) requests formal recognition from an employer, which the employer will then agree to.
• A statutory recognition: The Central Arbitration Committee (CAC) provides a formal recognition, if an employer refuses voluntary recognition prior.

This article will not cover the voluntary and statutory recognition process. However, you can find more detailed information on the Chartered Institute of Personnel and Development (CIPD) website.

If you don’t recognise an industry-related union

There are a few things that can happen if you don’t proactively recognise an industry-related trade union.

Firstly, a worker can still raise employment condition disputes by either becoming a union member or being represented by one. This means you risk having to resolve labour-related disputes on a case-by-case basis, instead of through an applicable union, which can be far more hassle.

Secondly, as we have stated above, if you don’t provide a voluntary recognition to an applicable trade union, it is highly likely that you’ll be forced into recognising the union via the Central Arbitration Committee (CAC). Therefore, it is often more effective in the long run to proactively recognise an industry-related union.

Remember:

Employers cannot engage in collective bargaining until the relevant trade union receives an official recognition.

Avoiding negotiation breakdowns

Understand that one of the risks of failed collective bargaining processes is a worker strike. This is why knowing how to effectively navigate the process is so vital, as strikes can cause:

• Damaged worker morale and loyalty
• Supply chain interruptions
• Extended revenue loss
• Reputational damage
• Increased costs
• Customer loss

To avoid strikes, an open and co-operative relationship between the employer and the union is essential.

Now that we've set out the prerequisites for collective bargaining, let's discuss the process in further detail.

How does collective bargaining work?

One of the first steps employers should take in collective bargaining is to choose who will negotiate on behalf of the organisation. This person will preside over the process, inviting both sides to present their case.

Below, we illustrate the general collective bargaining process in six basic steps:

1. A group of employees/trade union identifies conditions they want to negotiate with an employer(s)
2. Both sides prepare for the negotiation by reviewing relevant contracts and documentation
3. Parties make an agreement on when, where, and how negotiations will proceed
4. During the negotiation, participants discuss issues and determine a way forward
5. Both parties arrive at a negotiated agreement, which they then present to the union-represented employees
6. Employees then vote in favour of or against the negotiated agreement

Typically, once the agreement is finalised, every union member must follow the terms in updated contracts of employment, even if they disagree with the outcome. However, this will only apply if the employment contract states that the employee is bound by ‘current collective agreements’ or ‘any collective agreements made between you as the employer and a relevant trade union’.

Naturally, employer representatives need to ensure they prepare thoroughly for the negotiation process. Remember, this fundamental stage dictates its outcome and lays the foundation for future discussions.

To sum up: We have seen business leaders ask about the difference between collective bargaining and a collective agreement. Simply put, the first term identifies the process, whilst the later identifies the desired outcome. Remember, without reaching a final agreement, the whole negotiation has failed.

Our experienced and impartial mediators can help your organisation at this stage. Call us today for free, same-day advice on 01455 858 132.

Now, let's look at how the employer representative can effectively prepare for the process.

Different types of collective bargaining

Depending on how each side approaches collective bargaining, one of the four main types will occur.

• Conjunctive: Both parties try to benefit from the other’s loss. This often involves wages, bonuses, and other employee benefits.
• Co-operative: Both sides work together to solve a problem. This often involves work terms and technology solutions.
• Productivity-related: The employer wants to boost productivity by offering bonuses, to improve the company's success.
• Composite: Employees express concerns regarding working conditions, policies, or recruitment matters, with a view to safeguard workers.

By understanding these types of collective bargaining — conjunctive, co-operative, productivity-related, and composite — an employers' representative(s) can adjust their negotiation tactics to achieve outcomes that support both organisational goals and employee satisfaction.

Other conditions necessary for successful collective bargaining

Other than the above, there are a few other aspects your representative may need to take note of. For instance, a problem-solving attitude and openness to dialogue always helps the process progress smoothly.

Also, it is vital that no stakeholders in your organisation interfere with the employees' right to freedom of association in this process. For instance, your elected representative might be taking all the necessary steps to reach an agreement, only to discover that one of your managers was trying to persuade staff to drop their requests or even intimidate them.

This is where your chief negotiator can make a real difference by overseeing the whole process. They can even bring such concerns to you as the employer. Even if somebody in your management team has tampered with the process, you will gain your staff’s appreciation by handling such a situation appropriately.

Now, let's briefly discuss a more complex type of collective bargaining.

What is decentralised collective bargaining?

Let’s imagine a group of workers decide to initiate collective wage bargaining, and your business runs operations in a mix of partly overlapping industries. Instead of choosing one union, which would not appropriately represent them all, your staff decide to start their own.

This is an example of decentralised collective bargaining. This decentralised model delegates union competencies to the workers themselves, instead of an 'official' union. In other words, representatives take on the negotiating responsibility. They will negotiate a desired outcome with the employer instead of waiting for guidance from an external union.

The main advantage of this model for employers and employees in complex industries is that representatives have the advantage of knowing the business from within. So, they can focus on context-specific outcomes, rather than using a “one size fits all” approach that an external union may offer.

What if an employer breaches a collective bargaining agreement?

Whilst collective agreements are not enforceable by any direct law, penalties resulting from breach of contract are enforceable. This is why it is unwise to contravene conditions ratified by a collective agreement. If one of the parties contravenes it, both will inevitably end up back where they started.

As we have mentioned above, when an employer overlooks or contravenes a ratified agreement with a worker representative, they risk provoking collective action, and, in the worst case, a worker strike.

Moreover, if an employer breaks terms agreed upon, after including them in updated contracts and documentation, they run the risk of tribunal claims. In a 2021 case, an employer was found to be in breach of a collective bargaining agreement under the Trade Union and Labour Relations Act 1992. They made direct offers to employees to change their terms of employment, bypassing the collective bargaining agreed to prior.

For support with your contracts and documentation, call one of our HR specialists on 0808 501 6651 for same-day assistance.

Main HR lessons to take from negotiating with unions

It can benefit any business to consider the importance of collective bargaining. By negotiating with worker representatives, you encourage them to bring concerns forward, which you can then address to improve both productivity and worker wellbeing.

At the same time, working proactively with trade unions can spare you having to face exceedingly difficult situations. It can improve staff retention, loyalty, and trust, and support steady, reliable business growth.

Work with our experienced workplace mediators

Regardless of whether your employees unionise or not, workplace conflicts do happen. You want to be prepared to effectively manage them when they do. Don’t get caught in a loop of failed negotiations and unaddressed concerns that could result in tribunal claims.

We will support you, from the very early stages of collective bargaining to implementing the agreements. Call us today on 01455 858 132.