For centuries, guilds and unions have fought for worker rights and benefits while managers have fought back to protect the company from going out of business. These parties have worked to find common ground via the collective bargaining process, wherein both sides meet to establish an agreement on how the work will be conducted. This paper will look at collective bargaining, reviewing the process and how it has evolved over the last several centuries. The essay will also review some of the issues that commonly present themselves during such negotiations. The reader will glean a better understanding of this major component of business in the 21st century global economy.
Keywords: Arbitration; Collective Bargaining Unit; International Labor Organization; Labor Unions; National Labor Relations Act (NLRA); National Labor Relations Board (NLRB); Partnership Approach
In 1969, the Western film Death of a Gunfighter opened in theaters across the country. Starring Richard Widmark and Lena Horne, the film was well received by critics, including one of the most well-known, Roger Ebert. Ebert hailed the film and its director, Alan Smithee, of whom he said "a name I'm not familiar with." Smithee would direct more than a dozen other films from that point forward, and would appear in the credits for a number of television shows and even music videos.
Ebert's comment on Smithee's seeming anonymity was telling — no one had previously seen Alan Smithee's work, because in fact, Alan Smithee was not real. According to many accounts, Widmark strongly disagreed with the direction of Robert Totten, having him replaced with director Don Siegel. Siegel felt that Totten did most of the work, and did not wish to have his name on the film. The Directors Guild of America, which set the rules for film directors and worked to protect them within the industry, allowed Siegel to change his name in the film's credits. Over the following decades, the use of Alan Smithee's name by directors would be known as an act of defiance against interfering studio management.
For centuries, workers and business managers have often coexisted in an adversarial relationship. Guilds and unions have fought for worker rights and benefits while managers have fought back to protect the company from going out of business. These parties have worked to find common ground via the collective bargaining process, wherein both sides meet to establish an agreement on how the work will be conducted.
This paper will look at collective bargaining, reviewing the process and how it has evolved over the last several centuries. The essay will also review some of the issues that commonly present themselves during such negotiations. The reader will glean a better understanding of this major component of business in the 21st century global economy.
A Brief History of Unions
As far back as the first century AD, those who work within certain trades have come together to establish rules and advance their interests within larger regional economies. The plight of labor and labor unions has its origins in business, but there is much more to this area. In fact, this issue is not just one of business and economics — labor issues also have political, historical and sociological relevance.
The labor movement began during the Industrial Revolution in the 18th century. As industrialized nations began to further their evolution, building a wide range of industries, the workforce expanded with them. Increased demand meant harder work and longer hours, often under dangerous and/or unsanitary conditions. Many workers were on factory assembly lines for 12- and 14-hour shifts in unventilated, poorly lit factories. In Great Britain, after such conditions became well-publicized, Parliament enacted a set of "Factory Acts" in the early 19th century (Montagna, 2009). While the implementation of these measures in England did call attention to the issue, such conditions continued in other environments. Workers began to see the value in joining together in solidarity to change those conditions, since government did not seem interested in comprehensive reforms, believing that heavy regulation would stymie industrial growth.
The United States would also undergo this growth, both in terms of populations in urban centers and in the industrial workforce. The first U.S. unions jelled in New York and Philadelphia in the latter 18th century. Over the following century, labor organizations grew in size and quantity, diversifying concurrently with industrial diversification. Their success rate was minimal, however, in light of the political and economic power industrial leaders held at the time (Teasley, 2009). Their plight was worsened by the Great Depression, with only the craft unions surviving that economic period.
However, the Great Depression would also help labor find a resurgence. The fact that more than a third of Americans were put out of work helped give the working individual a sympathetic ear by the government. The federal government, led by new President Franklin Delano Roosevelt, enacted a number of laws designed to place greater restrictions on anti-union policies. The first of these acts was the 1932 Norris-La Guardia Act, which rendered unenforceable so-called "yellow-dog contracts." These were agreements in which the employee agreed to not join a union in order to keep his or her job. That law also limited the ability of courts to intervene in strikes and other labor protests ("The Great Depression and Labor," 2009). In 1935, the National Labor Relations Act, also known as the "Wagner Act" gave workers the right to form unions. This law also gave unions the ability to enter into negotiations with their employers. These negotiations would become known as "collective bargaining."
In addition to strict restrictions on the intervention of external elements into labor disputes, the National Labor Relations Act (NLRA) stated "to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to" such matters of pay and benefits, hours and other aspects of employment (National Labor Relations Act, 1935, Sec. 8 (d)). Collective bargaining, therefore, would entail the periodic negotiations between employers and employees (as represented by a union and/or union representatives). These negotiations would result in a legally binding contract, which could not be terminated unless both sides agreed to do so.
Today, unions and collective bargaining are found worldwide, although they tend to be more active in areas where industrialization and subsequent economic growth are increasing. While unions have suffered membership declines in recent years, the passions that have long been part of their unifying philosophies have remained. In fact, there are those who believe that unionization and collective bargaining are fundamental privileges not dissimilar from human rights — these advocates assert that if the sentiments of the International Labor Organization (the intergovernmental organization charged with advocating for both human and labor rights) were adopted in specific countries, the laws protecting collective bargaining would provide greater protections (Adams, 2005).
Understanding Collective Bargaining
At its most basic, collective bargaining entails the negotiation of terms and conditions of employment between management and workers. Under ideal conditions, the key to this concept involves the two sides meeting to establish common ground under set rules and equitable conditions. In the same vein as individual bargaining in employment, the assumption is that both sides are expected to make compromises in order to reach a mutually beneficial agreement.
Collective bargaining owes its roots to a perceived unpredictability in how industry earnings may be split between employers and employees. In 1867, British statistician Jacob Waley argued that the distribution of business returns would be in a constantly fluctuating environment and as such, no clear standards could be established. Therefore, he suggested, "the precise place at which the line is drawn will to a very considerable extent be determined by circumstances which may fairly...
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