1. INDUSTRIAL RELATIONS IN CANADA Fiona A. E. McQuarrie Prepared by: Tom Barrett

2. The Collective Bargaining Process C h a p t e r 8

3. Opening Vignette: Tenants face trashy time Talks have broken down again in a nine-month old strike by workers who do maintenance and repairs at low-cost housing buildings in Montreal The 125 workers are asking for a four-day 35-hour workweek The employer has offered to pay a 2 percent wage increase and to reduce the workweek to 37-1/2 hours from 40 hours; talks broke down The employer says the union hasn’t responded to its last offer The union says the employer ended talks by changing its position on points that were already agreed upon

4. Chapter 8 Objectives At the end of this chapter, you should be able to: –Define the stages that negotiations go through –Describe the sub-processes that occur within negotiation stages –Understand how each side in negotiations acquires bargaining power –Outline an alternative model for union- management negotiations

5. The Collective Bargaining Process Union-management negotiations usually proceed through specific stages: –The pre-negotiation stage –The stage of establishing the negotiation range –The stage of narrowing the negotiation range –The crisis stage –The ratification stage

6. 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

7. How Do Negotiations Work? When an agreement is reached, each team must go to its constituency or stakeholders and obtain their approval 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 concluded

8. Stages of Union-Management Negotiations Studies have noted a remarkable similarity in the stages of negotiation in most circumstances Aborting or short-circuiting any of these stages can cause the process to end abruptly or to fail to produce an agreement

9. Stages of Union-Management Negotiations 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

10. Establishing the Bargaining Range This stage typically begins at the first formal bargaining session 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

11. 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

12. 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 agreement

13. 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

14. 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

15. The Crisis Stage During the crisis stage, one or both sides must decide whether to settle or to use economic pressure such as a strike or lockout This decision can be triggered by disputes over a single issue or over a “package” deal involving several interrelated items This stage can be short or lengthy, depending on the strength of the parties’ resolve and their resources

16. Ratification 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

17. Ratification Bargaining structure is a major influence at this stage – negotiated terms must be accepted by all the employers or unions represented in a multiple-employer or multiple-union structure If one side rejects the proposed agreement, the parties must return to the table Once the agreement is ratified, representatives from both sides sign it to bring it into legal effect

18. Negotiation Stages and Negotiation Sub-Processes R.E. Walton and R.B. McKersie identify four negotiation sub-processes within a theoretical framework –Intra-organizational bargaining – each side’s negotiators seek to achieve consensus within their bargaining team and within their organization –Attitudinal structuring – each side forms attitudes toward the other side and toward the relationship between the teams

19. Negotiation Stages and Negotiation Sub-Processes R.E. Walton and R.B. McKersie’s four negotiation sub-processes (cont’d) –Integrative bargaining – the two sides try to resolve some of the issues by identifying common interests in search of “win-win” solutions –Distributive bargaining – the two sides compete with one another over the division of limited resources; produces “win-lose” solutions

20. Negotiation Stages and Negotiation Sub-Processes Different sub-processes become apparent during different stages of negotiations: –The intra-organizational and attitudinal structuring sub-processes are most obvious during the stages of establishing and narrowing the bargaining range –The integrative and distributive sub-processes are more obvious during the narrowing of the bargaining range stage than during the establishing the bargaining range stage –In the crisis stage, the distributive bargaining sub- process becomes more apparent

21. Negotiation Stages and Negotiation Sub-Processes The Intra-Organizational Bargaining Sub-Process –Involves the internal relationships that exist within each organization and thus is distinct from the other three sub-processes, which involve external relationships between the union and management

22. Negotiation Stages and Negotiation Sub-Processes –Two main types of internal conflict appear during this sub-process: Role conflict – occurs because of conflicting expectations of each side’s negotiator Factional conflict – develops within an organization when different groups have conflicting demands; results in disagreement within the organization over bargaining goals and priorities

23. Negotiation Stages and Negotiation Sub-processes

24. Negotiation Stages and Negotiation Sub-Processes The Attitudinal Structuring Sub-Process –One of the defining characteristics of the negotiation process is the long-term relationship between the parties

25. Negotiation Stages and Negotiation Sub-Processes –Prior to the start of negotiations, the relationship between the parties includes the following characteristics: Each side’s motivation to be competitive or cooperative with the other side Each side’s attitudes and beliefs about the legitimacy of the other side’s organization and leadership The level of trust each side has in the other Each side’s feelings of friendliness or hostility toward the other

26. Negotiation Stages and Negotiation Sub-Processes The Integrative Bargaining Sub-Process –The integrative bargaining sub-process deals with mutual problems, while the distributive bargaining process deals with more contentious issues

27. Negotiation Stages and Negotiation Sub-Processes

28. The Integrative Bargaining Sub-Process Integrative bargaining is often one of the elements of a “fostering strategy” that is used to develop cooperation between the parties and that ultimately may create a better overall relationship and facilitate other parts of the bargaining process Problems that can be solved through integrative bargaining are often addressed before the distributive issues are negotiated Integrative bargaining can still be a difficult process, as the two sides may differ on how to divide the overall gain equitably

29. Negotiation Stages and Negotiation Sub-Processes

30. The Distributive Bargaining Sub-Process –This is the most highly visible negotiation sub- process and the one most often associated with union-management negotiations –During this sub-process, both sides are involved in a fundamental conflict over the allocation of a fixed amount of resources – essentially adversarial in nature

31. Negotiation Stages and Negotiation Sub-Processes The Distributive Bargaining Sub-Process Distributive bargaining strategies are commonly used when wage and benefit issues are being negotiated Each side strives to present whatever information might persuade the other side to agree to its demands

32. Negotiation Stages and Negotiation Sub-Processes The Distributive Bargaining Sub-Process

33. Negotiation Stages and Negotiation Sub-Processes The Distributive Bargaining Sub-Process

34. The Role of Bargaining Power in Union-Management Negotiations The classic definition of bargaining power is the measure of the ability of one side to secure the other side’s agreement to its terms Environmental, socio-demographic, and organizational factors can affect both parties’ bargaining power Factors affecting the employer’s bargaining power include the size of its inventory, the structure of its operation, its competitiveness, whether the business is seasonal, whether it can operate during a strike, and its labour costs

35. The Role of Bargaining Power in Union-Management Negotiations Factors affecting the union’s bargaining power include the strength of its commitment to specific issues, its access to strike funds, and the timing and effectiveness of a possible strike However, union-management negotiations involve much more than a clash of differing amounts of bargaining power – integrative bargaining is an important part of the process The use of distributive bargaining can have damaging long-term effects on the relationship between the parties

36. Two Alternative Models of Union- Management Negotiations The Cost of Disputes Model –This model focuses on the interaction among the bargaining power, the interests, and the rights of each side, and how this interaction affects the costs associated with negotiating disputes –Interests are the needs, wants, fears, concerns, desires, or other motivators that underlie a position, or the preferred outcome, of one side

37. Two Alternative Models of Union- Management Negotiations The Cost of Disputes Model –Rights are formal powers granted to the parties through legislation, existing collective agreements, or in arbitral jurisprudence (previous legal decisions) –The parties’ differing interests are reconciled within the context of each side’s rights and bargaining power – e.g., the party with more rights may be able to dominate the process

38. Two Alternative Models of Union- Management Negotiations The Cost of Disputes Model –There are four criteria to consider in determining the amount of the costs: Transaction costs – include expenditures of time, money, resources, emotional energy, and lost opportunities, e.g., the costs of striking, locking out, or attempting to operate during a strike Satisfaction with the outcome – depends on how well the ultimate resolution fulfills each side’s underlying interests

39. Two Alternative Models of Union- Management Negotiations The Cost of Disputes Model –Criteria to consider in determining the amount of the costs (cont’d) Long-term effect of bargaining on the union- management relationship – a poor relationship will be costly because it will lead to disputes between the parties Recurrence – relates to whether an agreement resolved the issues between the parties

40. Two Alternative Models of Union- Management Negotiations The Cost of Disputes Model –This model suggests the cost of disputes can be reduced if, in bargaining, the parties focus on interests rather than on issues that can only be resolved if they exercise their rights or bargaining power –Ideally, a focus on interests results in lower transaction costs, greater satisfaction, less strain on the parties’ relationship and a lower recurrence of disputes

41. Two Alternative Models of Union- Management Negotiations The Mutual Gains Model of Bargaining –Proposed by R.E. Fisher and W.L. Ury –Founded on four principles: People – separate the people from the problem Interests – focus on interests, not positions Options – generate a variety of possibilities before deciding what to do Criteria – insist that the result of negotiations be based or evaluated on some objective standard

42. Two Alternative Models of Union- Management Negotiations The Mutual Gains Model of Bargaining –Joint union-management training in this model has produced positive results –However, studies suggest an imperfect fit between mutual gains bargaining techniques and union-management negotiations –Inherent power imbalances and different perspectives can make it difficult to apply this model

43. Two Alternative Models of Union- Management Negotiations The Mutual Gains Model of Bargaining –Three approaches have been proposed to resolve adversarial conflicts: Each side should strive to establish a minimum degree of trust in the other as well as a minimum level of communication Each side should determine a minimum level of acceptance of the other Both sides should recognize the level of mutual dependency

44. Two Alternative Models of Union- Management Negotiations The Mutual Gains Model of Bargaining –Studies conclude that this model can lead to improvements in attitudes and can result in more innovative solutions –However, a major transformation of the traditional structures of both unions and management will be required for a wider acceptance of mutual gains bargaining

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