Collective Bargaining Process and Its Outcome
College of Business & Economics CHED Center of Development in Business & Management Education
Collective Bargaining Process and Its Outcome
SERIES 1999-03
Divina M. Edralin, Ph.D. De La Salle University, Philippines
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About the Author
Dr. Divina M. Edralin is a Full Professor at the Business Management Department of the College of Business and Economics (CBE) of De La Salle University-Manila. She is also the Director of the Center for Business and Economics Research and Development (CBERD). She also holds the Don Antonio L. Tambunting Sr., Professorial Chair in Business Administration. She earned her Doctor in Management from De La Salle University-Manila, and her MA Industrial Relations from the Institute of Industrial Relations of the University of the Philippines. Her areas of expertise and research interest include human resource management, entrepreneurship, collective bargaining, and labor issues.
Abstract Dr. Divina Edralin This research on the collective bargaining process as initiated by trade unions and the results of such efforts had been undertaken on the premise that trade unions are founded on the principle of strength in numbers, and organized to fight for the worker’s rights, get better terms and conditions of work, and improve the overall quality of life and political power of its members, primarily through collective bargaining with employers. A survey was conducted among 90 unionized firms in Metro Manila, with both union and management representatives taken as respondents. Content analysis of the existing CBA in the unionized firms was done to determine the common economic and political issues negotiated by collective bargaining. Results indicate that the collective bargaining process is time-consuming because of the le ngth of time involved in preparing the proposals and counter proposals, the long hours spent during negotiations which is stretched over an average of nine (9) months, and the monitoring of the implementation of the CBA which is for a period of three to five years. The collective bargaining process is also a complicated encounter because of the varying strategies and tactics used by both parties in the pre-negotiation and actual negotiation stages. Other factors that add to the complexity of the process include the composition of the respective panels of negotiators (particularly the presence of a lawyer), and the differing attitudes and goals of the panel members. The study also reveals that the type of industry to which the company belongs, and the union’s membership in a federation have no correlation with the number of strategies and success factors identified by both union and management. The number of economic issues negotiated are significantly different according to the type of industry, with unions in the non-manufacturing sector getting more than those in the manufacturing sector. On the other hand, the number of political issues bargained by the federated unions are significantly different from the number bargained by the independent unions, with the federated unions getting more, particularly provisions related to union assistance. Lastly, both management and union have the same perception on the factors that will contribute to the success of the collective bargaining process foremost of which is trust between parties.
Collective Bargaining Process and Its Outcome Dr. Divina Edralin* “Good labor relations…. Cannot be brought about by legislation…. I believe that enlightened labor and enlightened management working together, can accomplish far more by peaceful bargaining than is possible though legislation.” (Harry Truman)
1.
Introduction The trade union, as a form of organization among workers, evolved in different parts of the world, in widely differing conditions and for varying reasons. Its historical formation from the early 1800s can be traced to economic, political, and social theories. As cited by Flippo (1984), trade unions are formed by the workers “to promote, protect, and improve, through collective action, the social, economic, and political interests of its members.” Corrollarily, Hoxie (1986) argued that labor unions’ primary aim is to protect and pursue the economic interests (such as raise wages, shorten hours of work, and increase the security of employment) of its own members. The Constitution and By-laws of one of the most active national trade unions in the Philippines, which is called the National Union of Workers in the Hotel, Restaurant and Allied Industries, stipulates that its four main objectives are to: (1) unite and organize all workers into one union; (2) promote job security and defend workers’ rights to self- organization, collective bargaining, and concerted action; (3) secure better terms and conditions of work; and (4) promote and advance the interests and general welfare of workers. These objectives are very similar to those cited in the economic, political and social theories on the formation of unions. Even the Philippine Labor Code (1998) defines a labor organization as “any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.” The available literature also show that the development of trade unions over the years had been very complicated, and like a pendulum, swings as much between experiences of failures as well as of successes. Today’s labor unions, however, have reached a critical point in their history, and their role in society is hotly disputed (McConville, 1986). This situation may be attributed to the fact that trade unions, as observed by Dijillas (1994), have considerable varying impact on the economic growth and political stability of the country. On the premise that trade unions are founded on the principle of strength in numbers, and organized to fight for workers’ rights, get better terms and conditions of work,
and improve the overall quality of life and political power of its members, primarily through collective bargaining with employers, this research on the collective *
I wish to acknowledge Ms. Ma. Theresa Mosquito for her assistance in the tabulation and statistical analysis of the sample data. Thanks are accorded to Mr. Eleazar Tolledo for facilitating the collection of the data through his Industrial Relations students under the Applied Corporate Management Program of the Business Management Department. I also thank Mr. Raymund Habaradas for editing the paper.
bargaining process as initiated by trade unions, and the results of such efforts, had been undertaken. Specifically, this paper aimed to: 1. identify the dynamics of the collective bargaining process in terms of its: 1.1 principles 1.2 stages 1.3 composition of the panel of negotiators 1.4 strategies used in the negotiation 2. determine the outcome of the collective bargaining process in terms of the common political and economic issues covered in the collective bargaining agreement (CBA); 3. identify significant differences in the number of strategies used by the parties, number of political and economic issues negotiated, and number of success factors experienced in the collective bargaining process based on the type of industry of the firms and union affiliation with a federation. 4. correlate the number of strategies used by the parties, number of political and economic issues negotiated, and number of success factors experienced based on the type of industry of the firms and union affiliation with a federation. 5. analyze the difficulties/problems encountered by the union and management during the collective bargaining negotiations; and 6. determine the factors that contribute to the success of collective bargaining negotiations. 2.
Theoretical Framework Collective bargaining is a long, complex, and emotional-rational process, the outcome of which depends on the balance of power between the union and management and their bargaining stances (Ballot, 1992). It is defined by Byars and Rue (1991) as a process that involves the negotiation, drafting, administration, and interpretation of a written agreement between an employer and a union for a specific period of time . This process therefore involves proposals and counter-proposals, demands and counter-demands wherein each party tries to obtain for itself the best or most favorable terms and conditions. It also involves constant communication between the union and the management during the effectivity of the written contract in order to avoid disputes in the interpretation and implementation of its provisions. By the same token, Baldoz (1995) explained that collective bargaining, which is basically a wage-setting and dispute settlement system, is the centerpiece of the industrial relations in the Philippines. It is a procedure whose end result is the making of collective agreements between employer and accredited representatives of employees concerning political and economic issues of employment. It requires both parties to deal with each other with open and fair minds, and to sincerely endeavor to overcome obstacles existing between them to the end that industrial relations may be successful, peaceful, and beneficial to both parties. However, collective bargaining does not end with the execution of an agreement. It is a continuous process and involves a continuing legal duty. As indicated, the end result of the collective bargaining process is a contract which is called the Collective Bargaining Agreement or simply CBA. The CBA
stipulates the joint understanding of the union and management concerning wages, hours of work, and all other terms and conditions of employment within the bargaining unit, including mandatory provisions for grievance and arbitration machinery (BLES, 1998). In the USA, about 2.4 million workers are under major collective bargaining agreements (those covering 1,000 workers or more) which are scheduled to expire or be reopened in 1996. These workers constitute about 30 percent of the 8.2 million employees under such agreements in private industry and State and local governments (Monthly Labor Review, 1996). In the Philippines, 683,000 workers or 23.8% of the total 2.865 million workforce of 6,540 establishments were reported to be covered by collective bargaining agreements (CBAs) in 1997. The said companies with CBAs represented 15.1% of the total number of 43,358 firms in the country in 1997. Per type of industry, the manufacturing sector, which constituted the bulk of establishments, only had 18.3% of such firms with CBAs; while the financing, insurance real estate and business services had 33.1% of such firms covered by CBAs making it the industry with the biggest slice of companies with CBAs (BLES, 1998). Refer to Appendix 1 for details. It can also be noted that the collective bargaining process seems to differ more in style than in substance. Scarth (1994) in his study identified two styles, namely: (1) the adversarial and (2) the cooperative. The adversarial style involves a high degree of animosity and antagonism between the union and management during the negotiation, while the cooperative style is more of a collaborative effort between the union and management to arrive at an agreement. Power (1996) added a new contract negotiation style called target-specific bargaining. This model is a teambased, interactive process which helps one organization and its bargaining unit/s bury old tensions and sign long-term agreements.
E C O N O M I C S I T U A T I O N
UNION SITUATION • Federated or Not • Number of Years • Number of • Relationship with in Operation Members Management
INPUT Collective Bargaining Process • Principles • Stages • Composition of Panel • Strategies • Success Factors
CONVERSION
OUTPUT Collective Bargaining Agreement
• Factors of Success • Problems Encountered
COMPANY SITUATION • Financial Position • Type of Industry • Type of Owners
CBA Provisions •• Economic Issues •• Political Issues
• Relationship with the Union
Figure 1. Schematic Diagram of the Collective Bargaining Process
P O L I T I C A L S I T U A T I O N
Viewing collective bargaining as a dynamic and complex process of encounter between the management and the union, whose respective goals differ from one another, the above diagram summarizes the collective bargaining framework of the study. Using the input-output model of Kast and Rosenweig (1974), the collective bargaining process is considered as the input, while the collective bargaining agreement which stipulates the economic and political issues negotiated is the output. The factors of success and the problems encountered are then considered to be the conversion variables. The input-output process is then assumed to be affected by both the internal environment represented by the union and company situations and the external environment the most important factors of which are the economic and political scenarios.
3.
Methodology Descriptive and comparative research designs were employed to realize the objectives of the study. A survey among 90 unionized firms in Metro Manila was conducted with both the union and management representatives taken as respondents for the survey. Table 1 presents the distribution of the actual samples. The three page survey questionnaire, which had been pre-tested, focused on gathering data related to company profile, union profile, strategies used by the union and the management in the CBA negotiation, problems the parties encountered during negotiation, and the factors of success experienced in CBA negotiations. Content analysis of the existing CBA in each unionized firm was done to determine the common economic and political issues negotiated by collective bargaining. The collected data were analyzed with the use of the SPSS (Statistical Package for Social Sciences) program. The percentage, mean, and simple ranking were utilized for the descriptive part. To test the null hypothesis for equality of means for the groups, a non-parametric approach was used. Significance tests for differences between the groups (by type of industry: manufacturing vs. nonmanufacturing; by type of union affiliation: independent vs. federated, by respondent: union vs. management) was done. The independent samples t- test and Mann-Whitney or U test were used to test for the equality of means. The MannWhitney test is an alternative test which made use of the ranks to test the equality of means. Kolmogorov-Smirnov was also used to test if the two groups compared come from the same distribution. Furthermore, Spearman’s rank correlation coefficients were obtained and significance tests of these coefficients were made to test the null hypothesis on whether there is a correlation between the different variables under study.
4.
Findings 4.1
Profile of the Firms and their Unions Ninety (90) unionized firms, composed of 42 manufacturing (47%) and 48 non-manufacturing (53%) establishments, participated in the survey. Classified by size of employment, 6.67% are small, 10% are medium and 83.33% are large companies with an average of 1,613 employees. By ownership, 34% are multinationals, 29% are Filipino-Chinese, 22% are Filipino, 7% are Chinese, and 7% are owned by other nationalities. Moreover, these companies, which are predominantly corporations (98%), had been in existence for an average of 37 years, with some of the firms operating for at least five years, and for as long as more than 80 years. (Refer to Table 2)
Table 1. Distribution of Sample Firms and the Type of Respondents Union Management
Total
Representatives (Frequency)
Representatives (Frequency)
Number of Samples
(over Total)
3
3
6
3.33
2 5 5 5 3
2 5 5 5 3
4 10 10 10 6
2.22 5.56 5.56 5.56 3.33
2 2 8 6 1
2 2 8 6 1
4 4 16 12 2
2.22 2.22 8.89 6.67 1.11
Subtotal (Manufacturing)
42
42
84
46.67
Non-Manufacturing Companies Banking Cargo/Transportation Computer Products Construction Materials Electricity Hospital Hotels, Restaurants, and Resorts Insurance Manpower Services Pharmaceutical and Chemicals Retail/Wholesale Telecommunications
14 4 1 1 1 2 10 4 1 4 2 4
14 4 1 1 1 2 10 4 1 4 2 4
28 8 2 2 2 4 20 8 2 8 4 8
15.56 4.44 1.11 1.11 1.11 2.22 11.11 4.44 1.11 4.44 2.22 4.44
Subtotal (Non-Manufacturing)
48
48
96
53.33
Over-All Total
90
90
180
100.00
Type of Industry Manufacturing Companies Appliances and Electronic Products Ceramics Construction Materials Consumer Products Food and Beverage Industrial Chemicals,Rubber, and Paints Machinery and Equipment Packaging Pharmaceutical and Chemicals Textile and Garments Tobacco
%
Table 2. Profile of Respondent Companies Characteristics Type of Industry Manufacturing Non-Manufacturing Total Size Based on Employment SMALL (10-99 Employees) MEDIUM (100-199 Employees) LARGE (200 or MORE) Total Average Number of Employees Standard Deviation Minimum No. of Employees Maximum No. of Employees Type of Ownership Filipino Chinese Filipino-Chinese Multinational/Transnational Others Total Form of Ownership Single Proprietorship Partnership Corporation Total Years of Existence 5-20 Years 21-40 Years 41-60 Years 61-80 Years 80 Years or More Total Average Years of Existence Minimum (in Years) Maximum (in Years)
Number Of Firms
%
42 48 90
46.67 53.33 100.00
6 9 75 90 1,613 2,380 44 10,000
6.67 10.00 83.33 100.00
20 7 26 31 6 90
22.22 7.78 28.89 34.44 6.67 100.00
1 1 88 90
1.11 1.11 97.78 100.00
23 31 26 5 5 90 37 6 147
25.56 34.44 28.89 5.56 5.56 100.00
In unionized companies, the union had been operating for an average of 18 years covering about 21%-90% of the bulk of the rank and file employee population. The average number of union members, given this percentage of coverage, is 807 employees with a minimum of 40 and a maximum of 6,753 members. There are 48 (53%) independent local unions and 42 (47%) federated workers’ organizations. The federated local unions have been affiliates of national trade union centers like the Trade Union Congress of the Philippines (TUCP); national unions such as the National Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN); and federations such as the Federation of Free Workers(FFW) for an average of 12 years. The unions have had an average of 4 CBAs with the same employer. It took an average of nine months for their negotiations on their present CBA to be concluded.
Table 3. Union Profile Characteristics
Number Of Firms
%
Years of Existence 1-10 Years 11-20 Years 21-30 Years 31 Years or More Total Average Years of Existence Minimum (in Years) Maximum (in Years) Membership as a Percentage of Employee Population Less Than 10% 10-20% 21-50% 51-70% 71-90% 90% or More Total Average Number of Union Members Minimum No. of Union Members Maximum No. of Union Members Type of Union Affiliation Independent Federated Total
33 19 13 25 90 18 1 45
36.67 21.11 14.44 27.78 100.00
5 10 24 20 26 5 90 807 40 6,753
5.56 11.11 26.67 22.22 28.89 5.56 100.00
48 42 90
53.33 46.67 100.00
Table 3. Continued No. of Firms Characteristics Number of CBAs 1-3 4-6 7-9 10-11 Do Not Know/No Answer Total Average Number of CBAs Minimum No. of CBAs Maximum No. of CBAs Number of Months of Negotiations for Present CBA Less Than 1 Month 1-3 Months 4-6 Months 7-9 Months 10-12 Months More Than 12 Months Do Not Know/No Answer Total Average Number of Months Minimum Maximum Federation/National Center All Workers Alliance Trade Unions (AWATU-TUCP) Alliance of Filipino Workers (AFW-LMLC) Anglo – Kilusang Mayo Uno (ANGLO-KMU) Associated Trade Unions (ATU-TUCP) Confederation of Free Workers (CFW-PDMP) Confederation of Labor and Allied Social Services (CLASS-TUCP) Drug and Food Alliance (DFA-KMU) Federation of Free Workers (FFW) February Six Movement (FSM-NCL) National Federation of Labor Unions (NAFLU-NCL) National Federation of Labor Unions (NAFLU-KMU)
% 43 17 7 9 14 90 4 1 11
47.78 18.89 7.78 10.00 15.56 100.00
7 27 27 8 4 7 10 90 9 2 Days 54 Months
7.78 30.00 30.00 8.89 4.44 7.78 11.11 100.00
1 1 2 6 3 2
2.38 2.38 4.76 14.29 7.14 4.76
3 4 1 2 3
7.14 9.52 2.38 4.76 7.14
Table 3. Continued Characteristics
No. of Firms
%
1
2.38
1 5
2.38 11.90
6
14.29
National Asociation of Trade Unions (NATU-PDMP) National Labor Union (NLU-TUCP) National Union of Bank Employees (NUBELMLC) National Union of Workers In Hotel And Restaurant and Allied Industries (NUWHRAIN-APL) Philippine Transport and General Workers Organization (PTGWO-TUCP) Total
1
2.38
42
100.00
Number of Years with the Federation 1-5 Years 6-10 Years 11-15 Years 16-20 Years More Than 20 Years Total Average Number Of Years With The Federation Minimum (In Years) Maximum (In Years)
7 10 4 9 12 42 12 1 35
16.67 23.81 9.52 21.43 28.57 100.00
4.2
Collective Bargaining Process
4.2.1 Principles Used The collective bargaining process in the surveyed unionized establishments was based on four (4) principles which were not forms of begging that appealed to the goodwill of the employer. These principles were: (1)
Recognition of opposing interests between labor and management - The management’s interest is to get the most from the workers, at the lowest possible cost, in order to maximize profit. This means offering low wages and poor working conditions. In contrast to the employer’s aim to reduce production cost to a minimum level, workers are interested in getting the best possible conditions for their work: good wages, safe and healthful workplace, an acceptable length of the working day, and other fringe benefits which would allow them to live decently.
(2)
(3)
(4)
Settlement of the clash of interest by means of a compromise between the workers’ demands and employer’s offer - A compromise requires good faith and a flexible “give and take attitude” on both sides. Both parties present their demands not as rigidly as a choice between “all-or-nothing”, but with the willingness to concede, if necessary. Non-violence The use of strike/ lockout and other forms of threat or harassment to get one’s demands or offers accepted in the initial stages of the negotiations is not deemed to be advantageous to both parties. Such restraint prevented an early deadlock, and allowed the parties to exhaustively tackle all issues involved. Peaceful alternative means are utilized by both parties to arrive at an agreement. Bargaining autonomy - The shaping of working conditions through the conclusion of collective bargaining agreements is solely the responsibility of unions and employers. Government only gets into the picture in cases of deadlock, usually involving economic issues, particularly on wage.
Aside from these four principles, Byars and Rue (1991) also added the following basic tenets of the collective bargaining process, to which the 90 unionized firms adhered : 1. 2. 3. 4.
Negotiation of relevant issues in good faith by both management and the union. Incorporation of the parties’ agreements into a written contract, which is the CBA. Administration of the daily working relationships according to the terms and conditions of employment specified in the contract. Resolution of disputes in the interpretation of the terms of the contract through established procedures, like the grievance machinery. 4.2.2
Stages
The collective bargaining process of the sample companies involves three major stages. These are: (1)
Pre-negotiation - This involved the union’s collection and analysis of data which enabled it to outline its demands, come up with bases/ justifications for the demands, prioritize the demands, and write the CBA proposal and present such proposal within 60 days prior to the expiration of the existing contract. Both parties, particularly the union, found the need to conduct extensive research related to the needs of workers, the economy, the financial condition of the company, and other relevant data to prepare and justify its proposals. On the other hand, management reviewed thoroughly the union’s demands to be able to give its counter proposals, particularly on those that have major financial implications and those impinging on management prerogatives.
(2)
Actual Negotiation - This included stating the initial offer; further research to justify demands and counter-offers; deadlock on issues; and final agreement. This stage also necessitated the use of strategies and tactics by the respective panels designed to improve their chances of securing provisions in the contract more beneficial to their respective sides.
(3)
Implementation of CBA - This was after both parties had signed the contract, and the union members had ratified the same. Thus, the CBA had taken effect. At this stage the union and management found it necessary to have the same interpretation of the provisions of the CBA to avoid disputes. The effectivity of the contracts covered a variety of time periods, between one year and five years, the most common being three years.
4.2.3
Composition of the CBA Negotiating Panel
One of the critical factors in the collective bargaining process is the people involved in the actual negotiations. These negotiators at the bargaining table vary slightly as to job title or position in the organization and number, depending on the type of union. Table 4 presents the usual members of the panel from both parties based on the survey. Table 4. Common CBA Panel of Negotiators Union Panel Member of a National Union, Federation Or Center
Independent Enterprise Union
Local Officers • President • Vice President • Secretary • Treasurer • Auditor Federation Representative • President • Secretary General • Adviser • Legal Counsel Observers/Research Officers • President • Vice President • Board Members • Secretary • PRO Lawyer
Freq 42
30
3 48
5
%
Management Panel
100.00 IR/HRD Manager Lawyer Manufacturing/Plant General Manager* Employee Relations Controller 71.43
7.14 100.00 IR/HRD Manager Lawyer Senior Vice Controller Manufacturing/Plant Finance 10.42 General Manager* Employee Relations Sales Manager
Freq
%
42 35 10 3 1 1
100.00 83.33 23.81 7.14 2.38 2.38
48 15 8 3 3 2 2 1 1
100.00 31.25 16.67 6.25 6.25 4.17 4.17 2.08 2.08
When the union was affiliated with a federation, the federation representative, such as the President, Secretary-General, Legal Counsel or Adviser formed part of the union panel together with the local officers. If the union was independent, it was the officers composed of the President, Vice-President, Secretary, Treasurer, and other authorized board members, together with their lawyer, if any, who sat as the panel of negotiators. On the side of management , whether the union was independent or federated, the usual panel of negotiators were the IR/HRD, manager, and company lawyer. The General Managers of the large companies rarely joined the negotiations, except when there was an impending or an actual deadlock in the issues which would have a major impact on the company, such as issues related to wages. The use of a lawyer as a panel member was common to many companies since management tended to be legalistic in its approach to the bargaining process. In the context of the tripartite industrial relations system, the government only mediates when there exists a deadlock in the collective bargaining negotiations, for which a notice of strike or request for preventive mediation had been formally filed with the Labor Department, particularly its National Conciliation and Mediation Board (NCMB). 4.3
Strategies in Collective Bargaining Negotiations
4.3.1 Strategies Used by the Union The strategies utilized by the union in the entire duration of the collective bargaining process contributed significantly towards determining the nature, type or extent of the political and economic demands that they will be able to get from management. Based on the responses of the 90 union representatives, their respective union panels utilized an average of 18 strategies, the least of which was six and the most of which was 23. The top five strategies commonly employed by the union in the collective bargaining negotiations were: (1) Examining final copies before final signing; becoming extra careful (82%);(2) Identifying which proposal/s can be compromised, to what extent, and in exchange for what (79%); (3) Defining the ground rules (74%); (4) Identifying which proposal/s cannot be compromised (72%); and (5) Listing information that can be obtained during negotiation; keeping a scoresheet of what were discussed and the results of the discussion; and; showing conviction in saying “No” and presenting facts to substantiate the arguments (70%). On the other hand, the least frequently used strategies cited by less than the majority were: If facts are vague, suspending judgement and negotiation on such issues (45%); Identifying friends of labor in the Department of Labor & Employment (36%); and Not agreeing on anything until you have agreed on everything (36%). Refer to Table 5.
Table 5. Strategies Used by the Union Number of Firms 74
% 82.22
Rank 1
71
78.89
2
67 65 63
74.44 72.22 70.00
3 4 6
63
70.00
6
63
70.00
6
62 61
68.89 67.78
8 9
59
65.56
10
56
62.22
11
Pinpointing the best and most appropriate time to negotiate and when a strike would be most effective Making the opening statements, with the management making the response Practicing equal footing during negotiation. Avoid using “Boss” or “Sir” in addressing the management panel Expecting unforeseen crises and developments that might occur in the course of bargaining which requires new strategies and tactics In case of deadlock, getting ready for a strike Controlling the discussion and always taking the initiative Offering to write the draft of the final agreement Building up a substantial collective bargaining (strike) fund If facts are vague, suspending judgement and negotiation on such issues Not agreeing on anything until they have agreed on everything Identifying friends of labor in Department of Labor and Employment
55
61.11
12
53
58.89
13
51
56.67
14
50
55.56
15.5
50 48
55.56 53.33
15.5 17
47 45
52.22 50.00
18 19
41
45.56
20
32
35.56
21.5
32
35.56
21.5
Others
16
17.78
23
Strategies Examining final copies before final signing; becoming extra careful Identifying which proposal can be compromised, to what extent, and in exchange for what Defining the ground rules Identifying which proposal can be compromised Listing information that can be obtained during negotiation Keeping a scoresheet of what were discussed and the result of the discussion Showing conviction in saying “No,” and presenting facts to substantiate the arguments Signing the final draft as basis of the final copies Conducting continuous research to be able to support/justify demands Deciding what information to give/withhold during negotiation Having alternative proposals that will respond to management’s unrealistic counter proposals
Table 5. continued.
Agree on certain terms of references before the start of negotiations Appoint somebody with a loud voice to be a speaker Conduct a seminar on CBA tactics before negotiations Create an atmosphere of openness Create an atmosphere of trust between parties Identify management's possible fears about the outcome of negotiation Keep in close contact with members to prepare for any possibilities Let lawyer be an observer only. Have consultants from academe/economists Make sure that when bluffs are made, the union can sustain them Make the net income of the company a basis for proposal negotiations Show sincerity in presenting arguments Using "on and off the record" during negotiation/Off the Record minutes
Minimum Number of Strategies Used Maximum Number of Strategies Used Average Number of Strategies Used
6 23 18
By the type of industry, the manufacturing firm unions used an average of 18 strategies with a minimum of nine strategies and a maximum of 23. However, the unions in the non-manufacturing business utilized an average of 17 strategies, with a minimum of six and a maximum of 23. Moreover, the item analysis (Refer to Table 6) shows that “defining the ground rules” and “examining final copies before final signing; becoming extra careful” was used by a big bulk (93%) of the unions in the manufacturing, while the strategy of “not agreeing on anything until they have agreed on everything” is the least frequently used strategy. Among the non-manufacturing establishments, a great majority (73%) of the unions employed the “examining final copies before final signing; becoming extra careful”, while the least used was “identifying friends of labor in the DOLE.” The t-test (t=-0.92; ρ=0.359) as well as the Mann-Whitney test (z = -0.8362; p = 0.403) reveal that at 95% confidence level, there is no significant difference in the mean number of strategies used by the unions by type of industry. The Kolmogorov Smirnov test ( K-S z = 0.507; p = 0.959) indicates that the number of strategies used by unions in the manufacturing and nonmanufacturing firms do not come from the same distribution. The results of the tests are shown on Table 7. The Spearman’s rank correlation coefficient (0.0886; p = 0.406) proves the absence of correlation between the number of strategies used by union and the type of industry. The correlation table is shown on Table 8.
Table 6. Strategies Used By Union By Type of Industry Manufacturing
Non-Manufacturing
%
Strategies Examining final copies before final signing; Becoming extra careful Identifying which proposal can be compromised, to what extent, and in exchange for what Defining the ground rules Identifying which proposal can be compromised Listing information that can be obtained during negotiation Keeping a scoresheet of what were discussed and the result of the discussion Showing conviction in saying “No,” and Presenting facts to substantiate the arguments Signing the final draft as basis of the final Copies Conducting continuous research to be able To support/justify demands Deciding what information to give/withhold during negotiation Having alternative proposals that will respond to counter proposals management’s unrealistic Pinpointing the best and most appropriate would be most effective Making the opening statements, with the management making the response Practicing equal footing during negotiation. Avoid using “Boss” or “Sir” in Addressing the management panel Expecting unforeseen crises and developments that might occur in the course of bargaining which requires new strategies and tactics In case of deadlock, getting ready for a Strike Controlling the discussion and always taking the initiative Offering to write the draft of the final agreement Building up a substantial collective bargaining (strike) fund If facts are vague, suspending judgement and negotiation on such issues
No. of Firms
(Over 42 FIRMS)
39
% Rank
No. Of Firms
(Over 48 FIRMS)
Rank
92.86
1.5
35
72.92
1
37
88.10
3
34
70.83
2
39 33 31
92.86 78.57 73.81
1.5 7 8.5
28 32 32
58.33 66.67 66.67
8.5 4.5 4.5
33
78.57
6
30
62.50
6
35
83.33
4
28
58.33
8.5
29
69.05
11
33
68.75
3
34
80.95
5
27
56.25
11.5
31
73.81
9
28
58.33
8.5
28
66.67 14.5
28
58.33
8.5
29
69.05
26
54.17
13.5
28
66.67 14.5
25
52.05
15.5
28
66.67 14.5
23
47.92
17
28
66.67 14.5
22
45.83
18
23
54.76
17
27
56.25
11.5
22
52.38
18
25
52.08
15.5
19
45.24
20
26
54.17
13.5
21
50.00
19
20
41.67
19
11
Table 6 continued. Manufacturing
Non-Manufacturing
%
%
No. of Firms
(Over 42 FIRMS)
15
35.71
17
Others (Refer to Table 5 for details)
8
Minimum Number of Strategies Used Maximum Number of Strategies Used Average Number of Strategies Used
9
6
23
23
18
17
Strategies Not agreeing on anything until they have agreed on everything Identifying friends of labor in Department of Labor and Employment
Rank
No. Of Firms
(Over 48 FIRMS)
Rank
22
17
35.42
21
40.48
21
15
31.25
22
19.05
23
8
16.67
23
Table 7. Significance Tests Type Of Industry
Variables
Result oF T-Test (Equality of Means)
Result oF Mann Whitney U Test
Type of Union Affiliation Result OF Kolmogorov Smirnov Test
Result OF T-Test (Equality of Means)
Result OF Mann Whitney U Test
Respondent (Union/Mgmt.)
Result OF Kolmogorov Smirnov Test
Result OF T-Test (Equality of Means)
Result OF Mann Whitney U Test
Result OF Kolmogorov Smirnov Test
Number of Strategies Used by Union
t = -0.92 p = 0.359
z = -.8362 p = 0.403
z = 0.507 p = 0.959
t = -0.9 p = 0.373
z = -1.2097 z = 0.732 p = 0.2264 p = 0.657
N.A.
N.A.
N.A.
Number of Strategies Used by Management
t = 0.65 p=0.515
z = -0.6197 p = 0.5355
z = 0.493 p = 0.968
t = - 0.64 p=0.522
z = -1.2760 z = 0.789 p = 0.202 p = 0.562
N.A.
N.A.
N.A.
Number of Economic Issues Covered
t = 3.26** p = 0.002
z = -3.1813** p = 0.0015
z = 1.507** p = 0.021
t = -0.39 z = -0.5684 z = 0.676 p = 0.696 p = 0.5698 p = 0.751
N.A.
N.A.
N.A.
t = -0.65
z = -0.8689
z = 0.831
t = -5.37** z=- 4.9118**
N.A.
N.A.
N.A.
p = 0.516
p = 0.3849
p = 0.495
p = .000
p = .000
z = 2.507** p = 0.000
t = 0.94 p=0.351
z = -0.9177 p = 0.358
z = 0.929 p = 0.354
t = - 0.79 p=0.432
z = 0.732 p = 0.657
z = 0.789 p = 0.562
t =- 0.14 p=0.890
Number of Political Issues Covered
Number of Success Factors Experienced
z = -0.220 z = 0.246 p = 0.8243 p = 1.000
Legend: ** t/z is significant when ρ<0.05 which means that there is a significant difference between the means of the two groups (manufacturing vs. non-manufacturing, union vs. management, independent vs. federated) * NA – Computations are Not Applicable
Table 8. Correlation Table (Using Spearman’s Rank Order Correlation)
Variables Type of Business Type of Union Affiliation Respondent (Union/Mgmt)
Number of Strategies Used By Union
Number of Strategies Used by Management
Number Of Economic Issues Covered
Number Of Political Issues Covered
Number Of Success Factors Experienced
0.0886 p = 0.406 0.1282 p = 0.228
-0.1353 p=0.204 0.0657 p = 0.5390
-0.3372** p = 0.001 0.0602 p = 0.573
0.0921 p = 0.388 0.5206** p = 0.000
0.0688 p = 0.360 0.0405 p = 0.5400
Coefficient cannot be computed
Coefficient cannot be computed
0.0000 p = 1.0000
0.0000 p = 1.0000
0.0166 p = 0.8250
Legend: ** p < 0.05, significant correlation NOTE : Correlation coefficient values above the p values indicate the variability explained by the relationship between the two variables but do not necessarily explain a cause and effect relationship
According to the type of union affiliation, independent unions employed an average of 17 strategies, with a minimum of six and a maximum of 23. The federated unions, on the other hand, utilized an average of 18, with as few as nine and as many as 23 strategies. (Refer to Table 9).The item analysis confirms that by type of union affiliation, the number one frequently used strategy was “examining final copies before signing” (77% for independent and 83% for federated) and the least employed strategy for independent unions was “not agreeing on anything until they have agreed on everything“ (25%). For federated unions, the least used strategy was “identifying friends of labor at DOLE” (33%). The t- test outcome (t=-0.9; ρ =0.373) and the Mann Whitney U test (z = -1.2097; p =0.2264) illustrate that there is no significant difference in the mean number of strategies used by the unions by their type of affiliation. This is further confirmed by the Kolmogorov-Smirnov test (K-S z = 0.732; p = 0.657) which illustrates that there is no significant difference in the distribution of samples from the two groups (independent and federated unions based on number of strategies used by the union negotiators (Refer to Table 7). The Spearman rank order correlation coefficient computed value (0.1282, p=0.228) also pinpointed that there is no correlation with the number of strategies used and the type of union affiliation (Refer to Table 8) Table 9. Strategies Used By Union By Type of Union Affiliation
Strategies Examining final copies before final signing: becoming extra careful Identifying which proposal can be compromised to what extent, and in exchange for what Defining the ground rules Identifying which proposal can be compromised Listing information that can be obtained during negotiation Keeping a scoresheet of what were discussed and the result and the result of the discussion Showing conviction in saying “No,” and presenting facts to substantiate the Arguments Signing the final draft as basis of the final copies Conducting continuous research to be able to support/justify demands
No. of Firms
Independent % Rank (Over 48 FIRMS)
No. of Firms
Federated % (Over 42 FIRMS)
Rank
37
77.08
1
35
83.33
1
36
75.00
2
33
78.57
1.5
34 34
70.83 70.83
3.5 3.5
30 29
71.43 69.05
6 9.5
32
66.67
5.5
25
59.52
15
32
66.67
5.5
30
71.43
6
29
60.42
9
32
76.19
4
29
60.42
9
29
69.05
9.5
29
60.42
9
33
78.57
1.5
Table 9. Continued
Strategies
Independent % No. of (Over Firms 48 FIRMS)
Rank
Federated % No. of (Over Firms 42 FIRMS)
Rank
Deciding what information to give/withhold during negotiation Having alternative proposals that will respond to management’s unrealistic counter proposals Pinpointing the best and most to negotiate and when a strike would be most effective Making the opening statements, with the management making the response Practicing equal footing during negotiation. Avoid using “Boss” or “Sir” in addressing the management panel Expecting unforeseen crises and developments that might occur in the course of bargaining which requires new strategies and tactics In case of deadlock, getting ready for a strike Controlling the discussion and always taking the initiative Offering to write the draft of the final agreement Building up a substantial collective bargaining (strike) fund If facts are vague, suspending judgement and negotiation on such issues Not agreeing on anything until they have agreed on everything Identifying friends of labor in Department of Labor and Employment Others (Refer to Table 5 for details)
29
60.42
9
28
66.67
13
25
52.08
14.5
29
69.05
9.5
26
54.17
13
26
61.90
14
27
56.25
12
24
57.14
16
28
58.33
11
30
71.43
6
24
50.00
16
29
69.05
9.5
20
41.67
19.5
28
66.67
13
21
43.75
18
21
50.00
18
25
52.08
14.5
20
47.62
19
20
41.67
19.5
23
54.76
17
23
47.92
17
16
38.10
21
12
25.00
22
19
45.24
20
17
35.42
21
14
33.33
22
7
14.58
23
9
21.43
23
Minimum Number of Strategies Maximum Number of Strategies Average Number of Strategies Used
6 23 17
9 23 18
4.3.2
Strategies Used by Management
Management utilizes various negotiation strategies to lessen costs (most directly in terms of lost sales and profits) since management works with a relatively defined set of objectives (primarily profit maximization) and determines the overall programs to reach these objectives. Based on the replies of the 90 management representatives in the survey, their management panels employed an average of three strategies with as few as one and as many as nine. The top three frequently mentioned strategies were (1) “examining meticulously the details of each union proposal” (58%); (2) “offering a “package deal” to save on labor costs” and “background checking of the negotiation panel of the union” (50%); and (3) “offering the least as a counter proposal to the union” (47%). The admitted least utilized strategy by management is “harassing union negotiation panel members” (3%). Table 10. Strategies Used by Management Strategies
No. of firms
Examining meticulously the details of each proposal 52 Background checking of the union's negotiation panel 45 Offering a “package deal” to save on labor costs 45 Offering the least as a counter proposal 42 Explaining that the company is not generating profit 34 Adding or subtracting a few significant points in the 28 Final minutes of the CBA Not giving the true financial condition of the company 21 Bluffing 21 Others 15 Preparing several proposals for each provision Emphasize that all activities in the company are geared towards labor-management partnership Base the initial proposals on previous CBA Take time to listen and show that management understand the position of union Create an atmosphere of trust and open communication Define the ground rules Agree to avoid foul language during negotiations Present CBAs of other companies from the same industry for comparison Maintain a friendly atmosphere Practice an open-book policy regarding the financial standing of company Sending pro-management workers during union 10 meeting to spy Harassing union negotiation panel members 3 Minimum Number of Strategies Used 1 Maximum Number of Strategies Used 9 Average Number of Strategies Used 3
Rank % 57.78 1 50.00 2.5 50.00 2.5 46.67 4 37.78 5 31.11 6
23.33 23.33 16.67
7.5 7.5 9
11.11
10
3.33
11
Classified by type of industry, the manufacturing sector reply shows an average of three strategies, with the use of at least one and as many as nine, in their negotiations with the union. While, the non-manufacturing management panels employ an average of four strategies, and the same range of strategies as that of the manufacturing group. Table 11. Strategies Used By Management By Type of Industry Manufacturing
Strategies Examining meticulously the details of each proposal Background checking of the union's negotiation panel Offering a “package deal” to save on labor costs Offering the least as a counter proposal Explaining that the company is not generating profit Adding or subtracting a few significant points in the final minutes of the CBA Not giving the true financial condition of the company Bluffing Others (Refer to Table 10 for details) Sending pro-management workers during union meeting to spy Harassing union negotiation panel Minimum Number of Strategies Maximum Number of Strategies Average Number of Strategies
Non-Manufacturing
No. of Firms
% (Over 42 Firms)
No. of Firms
% (Over 48 Firms)
Rank
Rank
32
76.19
1
20
41.67
1
27
64.29
2
18
37.50
2
29
69.05
3
16
33.33
4
25 19
59.52 45.24
4 5
17 15
35.42 31.25
3 5
17
40.48
6
11
22.92
8
8
19.05
8
13
27.08
6
9 5 5
21.43 11.90 11.90
7 9.5 9.5
12 10 5
25.00 20.83 10.42
7 9 10
1 1 9 3
2.38
11
2 1 9 4
4.17
11
Furthermore, the content analysis of the responses reveals that, in both industry sectors, “examining meticulously the details of each proposal” ranks first and “harassing union negotiation panel members” ranks last. See Table 11. The t- test ( t= 0.65; p=0.515) as well as the Mann-Whitney test (z= -0.6197; p =0.5355) show that there is no significant difference in the mean number of strategies employed by the management panel by type of industry. The Kolmogorov-Smirnov test (K-S z = 0.493; p = 0.968) also indicates that the number of strategies used by management in these two industry groups do not differ in their distribution.
Table 12. Strategies Used By Management By Type of Union Affiliation Independent
Strategies
Federated
% (Over 48 No. of Firms) No. of Firms Rank Firms
% (Over 42 Firms)
Rank
Examining meticulously the details of each proposal Background checking of the union's negotiation panel Offering a “package deal” to save on labor costs Offering the least as a counter proposal Explaining that the company is not generating profit Adding or subtracting a few significant points in the final minutes of the CBA Not giving the true financial condition of the company Bluffing Others (Please refer to Table 10 for details) Sending pro-management workers during union meeting to spy Harassing union negotiation panel Members
24
50.00
1
28
66.67
1
22
45.83
2
21
50.00
3
21
43.75
3
23
54.76
2
19
39.58
4
20
47.62
4
18
37.50
5
14
33.33
5
14
29.17
6
13
30.95
6
9
18.75
7.5
10
23.81
8
7 9
14.58 18.75
9 7.5
12 6
28.57 14.29
7 9.5
4
8.33
10
6
14.29
9.5
1
2.08
11
2
4.76
11
Minimum Number of Strategies Maximum Number of Strategies Average Number of Strategies
1 9 3
1 9 4
5.
Common Political and Economic Issues The CBAs cover a variety of issues, which may be broadly categorized as: political and economic. The political issues are those related to: (1) coverage/scope; (2) union security; (3) job security or security of tenure (4) rights and responsibilities of parties; (5) company rules and regulations; (6) management prerogatives; (7) strikes/lockouts; (8) check off; (9) grievance procedure; (10) disciplinary measures; (11) labor-management council/committee (12) union leave; (13) union holiday-off; and (14) union assistance . The economic issues, on the other hand, are those related to: (1) wages; (2) premiums; (3) allowances; (4) bonuses; (5) hospitalization; (6) insurance; (7) retirement; (8) productivity incentives; (9) meal subsidies; (10) uniforms; (11) promotions; and (12) leaves. Based on this classification of CBA issues, the content analysis of the existing contracts of the 90 unionized firms reveals a number of interesting patterns. 5.1
Economic Issues
On the major economic issues covered, all (100%) CBAs have wage provisions which stipulate among others, across the board increases ranging from a minimum of 10%/P150 per month, to a maximum of 15%/P2,200 per month with an average of 13%/P786 per month for three years. One hundred percent (100%) of the union contracts contain provisions on premiums mandated by law. These are payment for services rendered for night duty, overtime, holiday and rest day. All (100%) companies also have CBA provisions on vacation and sick leave benefits, with a minimum entitlement of 10 days to a maximum of 21 days, or an average of 15 days per year. Other leaves such as emergency, birthday, bereavement and funeral, are also manifested in 98% of the CBAs. These leaves range from one day up to 15 days with an average of seven days. The third most frequently (89%) negotiated economic provision is hospitalization. This benefit gives at least P5,000 and as much as P130,000, with an average of P40,879, per year. Bonus provisions are included in 76% of the CBAs. This benefit is over and above the 13th month pay. Workers receive at least one month to a maximum of four months with an average of two months yearly bonus. Retirement provisions are also indicated in a considerable number of contracts (71%). The retirement benefit is equivalent to 15 days’ to three months’ pay with an average of one month salary per year of service. Allowances provisions rank fifth (66%), with a minimum of P100 to P4,000, and an average of P1,343 per month as employee allowance. The insurance provisions, on the other hand, cover life insurance benefits for employees, ranging from P11,000 to P600,000, with an average of P164,937. Uniform benefit is also stipulated in 60% of the CBAs. Employees receive two sets/P500 to six sets/P6,000, with an average of four sets/P1,922 per year. Meal subsidies are negotiated in 54% of the contracts. Management subsidizes about P8.00 to P100 with an average of P41.00 per duty meal. However, hotel and restaurant workers get free meals because of the nature of their establishments.
The least stipulated economic issues are on promotion (47%) and productivity incentives (39%). Productivity incentives are computed differently in CBAs which contain this provision. This is either based on percentage of sales or on actual peso value. Further analysis of the 90 CBA on the economic issues illustrates that the average number of negotiated provisions is 10, with a minimum of four and a maximum of 14 (Refer to Table 13). Table 13. Economic Issues Covered in the CBAs Coverage* Issues Minimum Maximum Wages
Premiums a. Night Differential b. Overtime c. Holiday Pay d. Holiday-Rest e. Rest day Leaves (VL/SL) Other leaves (Emergency, Birthday etc.) Hospitalization Bonuses Retirement Allowances Insurance plan Uniforms Meal subsidies Promotion Productivity Incentives Signing bonus
10% increase annually PHP 150.00
15% increase 13% increase annually annually PHP 2,200.00 PHP 786.00
+ 15%
+ 55%
+ 31%
+ 33% + 30% + 50% + 50% 10 Days 1 Day
+ 70% + 100% + 80% + 75% 21 Days 15 days
+ 47% + 55% + 62% + 55% 15 Days 7 Days
PHP 5,000.00 1 Month 15 Days PHP 100.00 PHP 16,000 2 Sets/ year PHP 1,000.00 PHP 8.00/ day
Number of Issues
Average
2,500.00 1.5 months salary 4
PHP 130,000 PHP 40,879 4 Months 2 Months 3 Months 1 Month PHP 4,000.00 PHP 1,343.00 PHP 600,000 PHP 164,937 6 Sets/ year 4 Sets/ year PHP 6,000.00 PHP 1,922.00 PHP 100/ day PHP 41/day
15,000.00 2 months Salary 14
6,625.00 1.5 months salary 10
No. of Firms
%
Rank
90
100.00
2
90
100.00
2
90 88
100.00 97.78
2 4
80 68 64 59 58 54
88.89 75.56 71.11 65.56 64.44 60.00
5 6 7 8 9 10
49 42 35
54.44 46.67 38.89
11 12 13
12
13.33
14
* For details, refer to Appendix 2
Grouped by type of industry, the manufacturing sector has as an average of nine provisions with a minimum of fourand a maximum of 13. The nonmanufacturing group has an average of 11 provisions with a minimum of four and
also a maximum of 14 (Refer to Table 14). The t-test (t=3.26; ρ=0.002) proved that there is significant difference in the mean number of specific economic issues stipulated in the CBAs based on the type of industry. The Mann Whitney test (z=3.1813; p =0.0015) and Kolmogorov Smirnov test (K-S z = 1.507; p = 0.021) further confirmed this finding (Refer to Table 7). Also, the Spearman rank order correlation coefficient (-0.3372; p = 0.001) implied that there is a linear relationship that exists between the number of economic issues negotiated and the type of industry to which the firm belongs. The data illustrate that economic benefits negotiated by unions in the non-manufacturing sector are more compared to those in the manufacturing sector and 34% of the variability in the number of economic provisions negotiated is explained by the type of industry to which the companies belong. Table 14. Economic Issues Covered in the CBAs by Type of Industry Manufacturing
Non- Manufacturing
Rank
No. of Firms
% (48 Firms)
Rank
100.00 100.00
2 2
48 48
100.00 100.00
2.5 2.5
42 40
100.00 95.24
2 4
48 48
100.00 100.00
2.5 2.5
35 28 26 21 22 24 16 15 14 8
83.33 66.67 61.90 50.00 52.38 57.14 38.10 35.71 33.33 19.05
5 6 7 10 9 8 11 12 13 14
45 40 38 38 36 30 33 27 21 4
93.75 83.33 79.17 79.17 75.00 62.50 68.75 56.25 43.75 8.33
5 6 7.5 7.5 9 11 10 12 13 14
No. of Firms
% (42 Firms)
Wages Premiums A. Night Differential B. Overtime C. Holiday Pay D. Holiday-Rest Day E. Rest Day Leaves Other Leaves (Emergency, Birthday, Bereavement, Relocation Etc.) Hospitalization Bonuses Retirement Plan Allowances Insurance Plan Uniforms Meal Subsidies Promotion Productivity Incentives Signing Bonus
42 42
Minimum Number Of Economic Issues Maximum Number Of Economic Issues Average Number Of Economic Issues
4
4
13
14
9
11
Economic Issues
By type of affiliation, the independent unions have an average of 10 provisions with a minimum of four and a maximum of 14. The federated unions have also an average of 10 provisions with at least five and as many as 13 (See Table 15). The t- test (t = 0.39; p = 0.696) pinpoints that there is no significant difference in the mean number of specific economic issues provided for in the CBAs based on the union affiliation. The Mann-Whitney test (z= - .05684; p =0.5698) and Kolmogorov-Smirnov test (K-S z = 0.676; p = 0.751) further proved this result (See Table 7). The Spearman rank order correlation value (0.602; p = 0.573) expressed that there is no significant relationship between the number of economic issues negotiated and the type of union affiliation. Table 15. Economic Issues Covered in the CBAs by Type of Union Affiliation Independent
Economic Issues
No. Of Firms
Federated
% (48 Firms)
Rank
No. Of Firms
% (42 Firms)
Rank
Wages Premiums A. Night Differential B. Overtime C. Holiday Pay D. Holiday-Rest Day E. Rest Day Leaves Other Leaves (Emergency, Birthday, Bereavement, Relocation Etc.) Hospitalization Bonuses Retirement Plan Allowances Insurance Plan Uniforms Meal Subsidies Productivity Incentives Promotion Signing Bonus
48 48
100.00 100.00
2 2
42 42
100.00 100.00
2.5 2.5
48 46
100.00 95.83
2 4
42 42
100.00 100.00
2.5 2.5
42 32 32 28 26 27 25 15 18 4
87.50 66.67 66.67 58.33 54.17 56.25 52.08 31.25 37.50 8.33
5 6.5 6.5 8 10 9 11 13 12 14
38 36 32 31 32 27 24 20 24 8
90.48 85.71 76.19 73.81 76.19 64.29 57.14 47.62 57.14 19.05
5 6 7.5 9 7.5 10 11.5 13 11.5 14
Minimum Number of Economic Issues Maximum Number of Economic Issues Average Number of Economic Issues
4
5
14
13
10
10
4.2
Political Issues
Going over the specific political issues covered in the 90 CBAs, some noticeable trends exist. All (100%) contracts have a job security/security of tenure provision which includes the classification of employees, grounds and procedures for employee termination, and retrenchment of employees. The second most specified issue (90%) is the grievance procedure which defines the mechanism for the settlement of dispute and grievances arising from the interpretation and implementation of the terms of the CBA. The grievance machinery includes the definition and steps involved in the processing of grievance/s, who has the right to present the grievance to the company and who is supposed to respond to this; the number of days for the resolution of the complaint; and the voluntary arbitration procedure. A majority (87%) of the CBAs also defines the coverage/scope of the collective bargaining unit (CBU). It specifies the definition of the word “employee/s” and the coverage of the collective bargaining unit (CBU), usually of the regular rank-and-file employees, excluding those occupying “sensitive or confidential” positions, like the secretary to the GM/President, HRD assistant, assistant to the Controller. The union security issues are the fourth top priority (83%) in the negotiation. This section seeks to preserve and protect the union’s existence and effectiveness as an organization by ensuring its continued membership among CBU employees, and efficient collection of dues and other assessments. The common provision shown is either a maintenance of membership clause where employees are given the option to join the union or not, but once they join, they are required to continue their membership in good standing during the effectivity of the CBA. Another is the union shop security clause where employees must join the union within a specified period of time (usually 15-30 days from date of regularization), as a condition for their continued employment. Surprisingly, only 82% of the reviewed contracts contains a provision on management prerogatives which emphasize the right of management to hire, transfer, promote, assess performance, and conduct job standardization. The sixth (6th) commonly included provision is the no strikes/lockouts clause. This section stipulates the obligations of the union with regards to when a strike could be initiated (e.g. on issues like union busting, and violation/s of CBA provisions). By the same token it also stipulates what management should follow regarding lockouts. The article on rights and responsibilities of parties is written in 71% of the CBAs. This article confirms the rights of management, recognizes the rights and privileges of the union and the obligations of both the union and management to implement in good faith the agreed terms & conditions of employment, and comply with all the other CBA provisions. The check off provision is guaranteed by 62% of the unions. This issue is concerned with the employer’s regular deduction from the employees’ salaries the amounts corresponding to their union dues, strike fund contributions, fines, agency fees, and other special assessments and remit these to the union. The least stipulated political provisions are those related to labormanagement council/committee (42%) and disciplinary measures (34%). The labor-management committee (or LMC) article specifies its objective to serve as a venue to solve problems affecting employees and management, and its mechanisms,
including its composition of management and union representatives and the frequency of its meeting. The disciplinary measures sections, on one hand, generally list the offenses that may be committed by the employees and their corresponding sanctions after due process. Lastly, as part of the political issue classification, the CBAs contain provisions on union assistance (21%) which come in the form of educational fund , loan, assistance to cooperative, signing privilege, and support for union activities. This union benefit costs at least P 10,000 to P 150,000 or an average of P 75,000 a year. Table 19. Political Issues Covered in the CBA Issues Job security/ security of tenure Company rules and regulations Grievance machinery Coverage/scope Union security
Management prerogatives Strikes/lockouts Rights and responsibilities of parties
No. of Firms
%
Rank
Classification of Employment, Dismissal and Due Process, Retrenchment
90
100.00
1.5
Wearing of Uniform, Grace Periods, Meal Breaks, Working Hours Committee/Governing Body, Procedure
90
100.00
1.5
81
90.00
3
Definition of Employees, Bargaining Unit, Coverage of Agreement
78
86.67
4
Union/Maintenance Shop, Security against Dismissal, Coercion, Intimidation In joining union, Communication on
75
83.33
5
74
82.22
6
68 64
75.56 71.11
7 8
Coverage
Status of Negotiation Employee Hiring, Transfer and Promotion, Job Standardization, Evaluation No Strike/No Lockout Clause Right of management to supervise, hire, evaluate, train, dismiss, maintain standards. Right of union to communicate, investigate grievances, conduct meetings, have free access to company premises for federation representatives, have a bulletin board and office inside company premises
Table 19. Continued NO. OF Firms
%
Rank
Schedule of Check-off, Notices, Remittance Minimum : 40 Days Maximum: 275 Days Average : 145 Days Committee Composition, Objectives, Responsibilities Code of Discipline, Penalties, Due Process
56
62.22
9
55
61.11
10
38
42.22
11
31
34.44
12
Minimum : PHP 10,000.00 Maximum: PHP 150,000.00
19
21.11
13
8
8.89
14
Issues Check-off Union leave
Labor-management committee Disciplinary measures Union assistance (educational fund, loan, assistance to Cooperative, signing privilege, Union holiday off
Minimum number of political issues Maximum number of political issues Average number of political issues Covered in CBA
Coverage
2 Days
3 14 8
The analysis of the major political issues covered by the CBAs reveals that the average number of issues negotiated is eight, with a minimum of three and a maximum of 14. Classified by type of industry, the manufacturing sector has an average of 9 provisions, with three as the lowest and 12 as the highest number of such provisions. The nonmanufacturing unions were able to negotiate an average of eight political demands from a minimum of four and a maximum of 14 (Refer to Table 20). The t-test value (t=-0.65; ρ=0.516) revealed that there is no significant difference in the number of political demands negotiated by type of industry. This is further confirmed by the Mann-Whitney U test (z= 0.8689; p = 0.3849) and the Kolmogorov-Smirnov test (K-S z = 0.831; p = 0.495). Neither is there a correlation between the number of political issues covered and the type of industry, based on the Spearman rank order correlation (0.0921; p = 0.388).
Table 20. Political Issues Covered in the CBAs By Type of Industry
Issues Job security/security of tenure Company rules and regulations Grievance machinery Coverage/scope Union security Management prerogatives Strikes/lockouts Rights and responsibilities of parties Check-off Union leave Labor-management committee Disciplinary measures Union assistance (educational fund, loan, assistance to cooperative, Signing Privilege, support for Union Activities) Union Holiday off Minimum number of Political issues covered Maximum number of Political Issues covered Average number of Political issues
MANUFACTURING % No. Of (42 Rank Firms Firms)
NONMANUFACTURING No. of % Firms (48 Firms)
Rank
42 42 42 41 41 41 37 34
100.00 100.00 100.00 97.62 97.62 97.62 88.10 80.95
2 2 2 5 5 5 7 8
48 48 39 37 34 33 31 30
100.00 100.00 81.25 77.08 70.83 68.75 64.58 62.50
1.5 1.5 3 4 5 6 7 8
32 29 20 15 9
76.19 69.05 47.62 35.71 21.43
9 10 11 12 13
24 26 18 16 10
50.00 54.17 37.50 33.33 20.83
10 9 11 12 13
2
4.76
14
6
12.50
14
3
4
12
14
9
8
Table 21. Political Issues Covered in the CBAs By Type of Union Affiliation Independent
Federated
No. of Firms
% (48 Firms)
Rank
No. of Firms
% (42 Firms)
Rank
Job security/security of tenure
48
100.00
1
42
100.00
1
Company rules and regulations Grievance machinery Coverage/scope Union security Management prerogatives Strikes/lockouts Rights and responsibilities of parties Check-off Union leave Labor-management committee Disciplinary measures Union assistance (educational fund, loan assistance to cooperative, signing privilege, support for union activities) Union Holiday off
16 41 41 35 42 30 32
33.33 85.42 85.42 72.92 87.50 62.50 66.67
9 3.5 3.5 5 2 7 6
14 40 37 40 32 38 32
33.33 95.24 88.10 95.24 76.19 90.48 76.19
13 3 6 3 7.5 5 7.5
29 15 11 13 4
60.42 31.25 22.92 27.08 8.33
8 10 12 11 13.5
27 40 27 18 15
64.29 95.24 64.29 42.86 35.71
9.5 3 9.5 11 12
4
8.33
13.5
4
9.52
14
Issues
Minimum number of Political Issues Maximum number of Political Issues Average number of Political Issues
3
4
12
14
7
10
When analyzed by type of union affiliation, the independent unions only were able to secure in their CBAs an average of seven political demands, with a minimum three and as many as 12. On the other hand, the federated unions were able to bargain for a higher average of 10 political provisions with a minimum pegged at four and the maximum at 14. The t-test (t=-5.37; p = 0.000) , Mann- Whitney U test (z = -4.9118; p = 0.000), and Kolmogorov-Smirnov test (K-S z = 2.507; p = 0.000) computation results all indicate that there is a significant difference in the number of political issues negotiated by type of union affiliation. The Spearman rank order correlation value (0.5206; p = 0.000) verified that there is a significant relationship between the number of political issues bargained and the type of union affiliation. The information clearly illustrates that there are more political issues negotiated by federated unions compared to the independent unions, and 52% of the variability in the number of political provisions bargained is explained by the type of union affiliation.
6.
Problems Encountered During CBA Negotiations
Mondy and Noe (1981) opined that diversity is probably the key characteristic of collective bargaining. As such, the negotiation process is affected by the differing attitudes and goals of the union and management toward the main issues under discussion. When the negotiating parties are in the distributive bargaining strategy framework which is defined by Ballot (1992) as the “set of strategies, tactics, and activities utilized by negotiators when their goals or objectives are in direct conflict,” difficulties or problems are bound to be encountered. When asked regarding the problems experienced by the union during CBA negotiations, a number of specific difficulties were enumerated by the union officers as presented in Table 22. The most prevalent (41%) concern was the “lack of skills for negotiation.” The other noticeable (39%) constraint as perceived by the union was the “conflicts related to panel composition.” The union also experienced difficulties due to the “lack of willingeness to compromise” and “inadequate organizational capability” (32%). On the other hand, the management representatives identified fewer problems compared to the union. As manifested in Table 22, they ranked the “lack of willingness to compromise” at the top (55%) of the list. This was followed by the “lack of skills for negotiation” and “use of power play tactics” (21%). Over-all, the most frequently (42%) cited problem by both parties is the “lack of willingness to compromise”.
Table 22. Problems Encountered by Union and Management Union
Problems I Conflicts Related to Panel Composition
No. of Firms
Management % (44 Resp) Rank
No. of Firms
Over-All
% (33 Resp) Rank
No. of Firms
% (77 Resp)
Rank
17
38.64
2
6
18.18
4
23
29.87
3
18
40.91
1
7
21.21
2.5
25
32.47
2
?Management panel members do not have power and authority to decide ? Absence of owners during negotiation, represented only by managers and counsel ? Newly-hired manager included in panel ? Exclusion of Federation President in panel ? Lawyers included in the panel makes period of negotiation long ? Legal counsel of union prolongs and affects negotiation ? Intervention of lawyers included in panel
II Negotiators Lack Skills for Negotiation ? ?Lack of education on CBA technicalities/skills ? Inexperience in negotiation of some union panelists ? ?Some union panel members do not understand the The purpose of the negotiation and just air their gripes
Table 22.Continued Union Problems
No. of Firms
Management % (44 Resp) Rank
No. of Firms
Over-All
% (33 Resp) Rank
No. of Firms
% (77 Resp)
Rank
?D ? ifficulty in justifying demands/proposals ? ?Difficulty in understanding Management/Union Positions
III Non-Availability of Accurate Information to Make Informed Decision
6
13.64
7
1
3.03
8
7
9.09
9
11
25.00
5
3
9.09
6
14
18.18
5
? Absence of accurate information on company's financial condition ? Difficulty in assessing company's real financial standing ? Financial statements are fake ?Management not showing true financial condition ? Different data/facts presented by both parties ? Incomplete facts and data to present union proposals
IV Lack of Focus in Negotiations ? Delays due to schedule of panelists ? Poor management attendance ? Delay by Managers who has to attend to some work ?Managers always on call during negotiations
Table 22.Continued Union
Problems V Lack of Willingness to Compromise ? ? ? ? ? ?
Rank
No. of Firms
Over-All
% (33 Resp) Rank
No. of Firms
%
Rank
14
31.82
3.5
18
54.55
1
32
41.56
1
5
11.36
8
4
12.12
5
9
11.69
8
10
22.73
6
10
12.99
7
Closed mind of management Hardline attitude of management/union Hardline position of management/union No one wants to compromise Unreasonable proposals/counter proposals Disagreement on certain proposals
VI Economic Constraints During Negotiations ? ? ? ?
No. of Firms
Management
% (44 Resp)
Company has poor financial condition due to crisis Difficult to bargain if the company is not doing well Wage orders declared during negotiations Peso devaluated resulting on loss - difficulty in explaining to union
VII Lack of Sincerity ?Management uses delaying tactics ?Management is bluffing
Table 22.Continued Union
Problems
No. of Firms
Over-All
Management
% (44 Resp) Rank
No. of Firms
9
7
% (33 Resp) Rank
No. of Firms
2.5
11
% (77 Resp) Rank
? Disinformation tactics by management ?Management panel members not honest and
transparent ?Some management panel members only want chairman's attention ?Management too friendly with union panel ? Dimunition of benefits already negotiated
VIII Use of Power Play Tactics ? Political harassment on union members by Personnel Manager ? Pressure caused by Supervisor-Rank and File relationship ? Union threatens strike ? Acts of agitation by members during negotiation ? Disobedience campaign promoted by not wearing uniform ?Management has big influence in government and Media
4
9.09
21.21
14.29
6
Table 22.Continued Union
Problems IX Inadequate Organizational Capability ? ? ? ? ? ? ?
No. of Firms
14
% (44 Resp)
31.82
Over-All
Management Rank
No. of Firms
3.5
2
% (33 Resp)
6.06
Rank
No. of Firms
% (77 Resp)
Rank
7
16
20.78
4
Lack of preparation on union strategies Union lacks funds for negotiations There are financial constraints for union officers Lack of committed union officers Lack of information among members Lack of information dissemination Inability of officers to communicate negotiation status to members resulting in confusion
Total
99
48
147
7.
Factors of Success Experienced in CBA Negotiations
It is imperative that an effective collective bargaining negotiation process be established in order that meaningful results/outcomes, which are truly relevant and beneficial to both parties, could be mutually agreed upon. Therefore, there are a number of factors that should be present in the collective bargaining process to ensure its success. Out of the nine enumerated success factors, both union and management representatives indicated experiencing an average of seven factors, with a minimum of three for union and two for management. The top three most frequently checked items by the respondents in the list of factors of success experienced were: (1) “trust between parties” ( 84 %), (2) “confidence of the members in their representatives in the negotiations” (83%), and (3) “open and honest communication” (83%). (Refer to Table 23) The average number of success factors experienced by the union and ( X = 7 ) management when they were grouped by industry, was the same for the manufacturing and non-manufacturing establishments. The same result was also obtained when they were classified by union affiliation. The statistical values (as presented in Table 7) proved that there is no significant difference in the number of success factors experienced in the CBA negotiations by union and management panels. There is also no difference when the number of success factors are classified by type of industry and type of union affiliation. The Spearman rank order correlation test also showed that there is no significant relationship that exists between the number of success factors experienced in the CBA negotiations and the type of industry and union affiliation. Table 23. Success Factors for Management and Union Union
Success Factors Trust between parties Confidence of the members In their representatives in the negotiations Open and honest Communication Group participation Negotiators must possess the required skills for negotiation Establishment of clear procedures and group Rules for negotiation The resolution of conflicts during negotiation
No. of Firms
%
74 75
82.22 83.33
75
Management No. of Firms
%
3 1.5
78 75
86.67 83.33
83.33
1.5
75
72 69
80.00 76.67
4 5
68
75.56
58
64.44
Over-All No. of Firms
%
1 2.5
152 150
84.44 83.33
1 2.5
83.33
2.5
150
83.33
2.5
69 72
76.67 80.00
5 4
141 141
78.33 78.33
4.5 4.5
6
65
72.22
6
133
73.89
6
7
58
64.44
7.5
116
64.44
7
Rank
Rank
Rank
Table 23. Continued Union
Management
%
Accessibility of information to make informed decisions Use of the problem-solving team approach to identify issues and come up with options to discuss during negotiations
57
63.33
57
63.33
Minimum No. Of Success Factors Maximum No. Of Success Factors Average Number Of Success Factors
3
2
2
9
9
9
7
7
7
Success Factors
No. of Firms
%
8.5
58
64.44
8.5
57
63.33
Over-All
No. of Firms
Rank
No. of Firms
%
7.5
115
63.89
8.5
9
114
63.33
8.5
Rank
Rank
Table 24. Success Factors for Management and Union by Type of Industry Manufacturing
Non- Manufacturing
No. of Firms
%
Rank
No. of Firms
%
Rank
Trust between parties Confidence of the members in their representatives in the negotiations Open and honest communication Group participation Negotiators must possess the required skills for negotiation Establishment of clear procedures and group rules for negotiation The resolution of conflicts during negotiation Accessibility of information to make informed decisions Use of the problem-solving team approach to identify issues and come up with options to discuss during negotiations
79 74
87.78 82.22
1 2
73 76
81.11 84.44
5 1
73 66 72
81.11 73.33 80.00
3 5 4
77 75 69
85.56 83.33 76.67
2 3.5 6
58
64.44
6
75
83.33
3.5
52
57.78
8
64
71.11
7
51
56.67
9
64
71.11
8
56
62.22
7
58
64.44
9
Minimum No. of Success Factors Maximum No. of Success Factors Average Number of Success Factors Experienced
2 9 7
Success Factors
2 9 7
Table 25. Success Factors for Management and Union By Type of Union Affiliation Independent
Success Factors Trust between parties Confidence of the members in their representatives in the negotiations Open and honest communication Group participation Negotiators must possess the required skills for negotiation Establishment of clear procedures and group rules for negotiation The resolution of conflicts during negotiation Accessibility of information to make informed decisions Use of the problem-solving team approach to identify issues and come up with options to discuss during negotiations Minimum No. of Success Factors Maximum No. of Success Factors Average Number of Success Factors
Federated
No. of Firms
%
Rank
No. of Firms
%
Rank
73 76
81.11 84.44
2 1
73 74
81.11 82.22
3 2
71 72 70
78.89 80.00 77.78
4 3 5.5
75 69 71
83.33 76.67 78.89
1 5 4
70
77.78
5.5
63
70.00
6
56
62.22
9
60
66.67
7
60
66.67
8
54
60.00
8
67
74.44
7
47
52.22
9
2 9 7
2 9 7
8.
Conclusion
Although the Philippine Labor Code guarantees the right to collective bargaining to workers through their trade unions, and stipulates the procedures for the administration of collective bargaining agreements, the collective bargaining process remains to be a time-consuming and complicated encounter between management and union. It becomes time-consuming because of the length involved in preparing the proposals and counter proposals, the long hours spent during negotiations which is stretched over an average of nine (9) months, and the monitoring of the implementation of the CBA which is for a period of three-five years. It is complicated because of the varying strategies and tactics used by both parties in the pre-negotiation and actual negotiation stages of the collective bargaining process. The composition of the respective panels of negotiators add to the complexity of the process, particularly the presence of a lawyer which makes it even more legalistic. The differing attitudes and goals of the panel members might have dictated the number and types of specific strategies each party employ in the entire process of the bargaining. Since the negotiating parties are in the distributive bargaining strategy framework, they encountered several problems during the negotiations. The union expressed more difficulties than management and the most prevalent concern was the lack of skills for negotiations while management cited the lack to willingness of the union to compromise. However, the type of industry to which the company belongs, and the union’s membership in a federation, have no correlation with the numbers of strategies and success factors identified by both union and management. These two realities also did not lead to any significant differences in the number of strategies employed by the parties and the member of success factors experienced by both panel of negotiation.. The actual CBA political and economic provisions are focused primarily on wages, benefits, and other terms and conditions of employment in the bargaining unit, including mandatory provisions for grievance. The number of economic issues negotiated by the union are significantly different according to the type of industry. The unions in the non-manufacturing sector were able to get more than the manufacturing industry. On the other hand, number of political issues bargained by the federated unions are significantly different from the independent unions. They are able to get more than the unions which are independent. These provisions are related to union leave, union security, and union assistance. Lastly, both management and union have the same perception on the factors that will contribute to the success of the collective bargaining process. The foremost of which is trust between parties. “While so much has been done in recent years to identify and reduce some of the prime causes of industrial conflict, the future depends on the will of management and trade unions to resolve issues which may divide them and to develop more constructive relationships.” (ACAS leaflet Improving Industrial Relations, 1985)
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