enhancing cb negotiation competencies for nestle management

Enhancing CB Negotiation Competencies for Nestle Management Representatives

General Objectives of the ProgramA. The Objectives of the Seminar

1. To discuss the environment of collective bargaining negotiation, local and international.

2. To review traditional forms of negotiations through deeper discussion of theory and practice

3. To illustrate the need to shift paradigm in negotiation modes because of difference in contexts of bargaining

4. To introduce as alternative modes or concepts of negotiation that are problem solving, creative and non legalistic

5. To practice behavioral techniques of problem solving negotiation using checklists of proper behaviors

6. To prepare for actual negotiation using non-legalistic, problem solving approaches.

Day 1Session 1: The Realities of Collective Bargaining and Negotiation

1. The Labor Code, processes of negotiation, intervention of government

2. The economic environment 3. Traditional management and labor 4. The Concept of Immunity and Exemption from Local Standards

Session 2 The Traditional Structure, Processes to Negotiation1. The Theory of Distributive Bargaining (win-lose; fixed pie

approach; zero-sum approach)2. Characteristics of Traditional Bargaining

2.1Beliefs in Exclusivity of Interests2.2Positional, Confrontational Bargaining2.3Separate, isolated, differentiated measures of realities

2.4Modes of conflict resolution3. Illustrated examples and cases

Session 3. Shift in Bargaining or Negotiation Paradigm: Difficulties of Change and Challenge1. The Nature of Paradigm Shift: Illustration2. Change and Challenges3. The Theory of Integrative and Problem Solving Bargaining

(Win-win; Enlarging the pie; Variable sum game)4. Principles, Beliefs and Approaches to Integrative and Problem

Solving Bargaining and Collaborative Negotiations 5. Introduction of Institutional Performance Based Bargaining

Session 4: WorkshopForce Field Analysis of Organization’s Plus and Minuses: Readiness towards shift to STN approach

Day 2Session 5: Study Group/Team Technique in Negotiations

1. Recognition of fundamental goals (Vision, Mission, Goals, Strategies and the role of associates)

2. Enlarging commonality of interests 3. Openness in sharing information; common sources4. Adopting common metrics 5. Doing common research 6. Sharing affective concerns 7. Adopting problem solving approaches8. Operationalizing the STN: Real life Experiences

a. Confidence building approaches-- preparatory activities to negotiation

b. Common interventions for LM negotiations c. Illustrated examples, cases

Behavioral Components of Study Group Negotiation1. Communication models and styles during study group

discussion

© JAF Palafox, UP School of Labor and IR 2

2. Conflict management approaches 3. Use of Neutral Individuals within Negotiating Parties 4. More workshops on discussion of issues using

non-enterprise/company examples


Enhancing Negotiation Skills & CompetenciesExploration of New Negotiation Approaches

By Juan Amor F. Palafox*

I. The Legal, Political, Economic Environment of Collective Bargaining in the Philippines

The Legal Environment

Current State of L-M Partnership in Industrial Relations Not ideological or principle based Short term Program based Leadership based No long term goals for parties Environment and culture not conducive to partnering Systems and processes do not encourage, strengthen and sustain

partnering

A. Realities of Collective Bargaining and Negotiation

Primacy of Collective BargainingLet us look at the legal environment of collective bargaining… Art. 211. A. states “It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and negotiations…

(b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development,

(c) To foster free and voluntary organization of a strong and united labor movement,

* Associate Professor and Dean of the UP School of Labor and Industrial Relations, former Director of the UP Human Resources Development Office for UP Diliman and UP System Offices. Access to this material is given to you as a privilege for attending this seminar. Please do not reproduce without the express permission of the author. May 20, 2004, Nestle Rockwell Head Offices, Makati City.


(d) To promote the enlightenment of workers concerning their rights and obligations as union members and as employees,

(e) To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes,

(f) To ensure a stable but dynamic and just industrial peace, and (g) To ensure the participation of workers in decision and policy-making

processes affecting their rights, duties and welfare.”Art. 211. B. further reiterates the role of collective bargaining:

“To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or terms and conditions of employment, …”

Duty to Bargain CollectivelyThe meaning of duty to bargain collectively, Art. 252 states,

“The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances… but such duty does not compel any party to agree to a proposal or to make any concession”,

compelling parties to meet but does not encourage anybody to agree to anything. Art. 253. Meaning of duty to bargain collectively where there exists

a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force the effect of the existing agreement during the 60-day period an/or until a new agreement is reached by the parties.

Terms of a CBA, Expiry, Renegotiation and RetroactivityArt. 253-A. Terms of a collective bargaining agreement. Any

Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent


bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code.

Workers’ participation in policy and decision-making Art. 255. Exclusive bargaining representative and workers

participation in policy and decision-making. The labor organization designated or selected by the majority of employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision to law to the contrary notwithstanding, workers shall have the right, subject to rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils; Provided, that the representatives of the workers in such labor management councils shall be elected by at least the majority of all employees in said establishment.

Procedure of negotiations in collective bargaining Art. 250. “a) When a party desires to negotiate, it shall serve a written

notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice. (b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later that ten (10) calendar days from the date of request. (c) If the dispute is not settled, the Board (NCMB) shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall


have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duties of the parties to participate fully and promptly in the conciliation meetings the Board may call. (d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.”

it prematurely recognizes disputes, and lets a third party intervene in the process.

Obligation to furnish informationArt. 242. Rights of legitimate labor organizations. A legitimate labor organization shall have the right:

(c) To be furnished by the employer upon written request, with annual audited financial statements, including the balance sheet ad the profit and loss statement within thirty (30) calendar days from the date of receipt of the request, after the union has been duly certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation, …

IRR Book V, Rule XXII, Section 5. Disclosure of information. In collective bargaining, the parties shall, at the request of either of them, make available such up-to-date financial information on the economic situation of the undertaking, which is normally submitted to relevant government agencies, as is material and necessary for meaningful negotiations. Where the disclosure of some of this information could be prejudicial to the undertakings, its communication may be made conditional upon a commitment that it would be regarded as confidential to the extent required. The information to be made available may be agreed upon between the parties to collective bargaining.

Dispute settlement procedures: strikes, lockouts, and assumption of jurisdiction

Art. 263. Strikes, picketing and lockout. (a) It is the policy of the State to encourage free trade unionism and free collective bargaining,

(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national


interest, shall continue to be recognized and respected. However, no labor union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes.”

these provisions, mention on the same vein, free collective bargaining as subsequently having the right to strike of employees and the right to lockout by employers. Moreover, the law and regulating bodies do not accept that parties can be

mature to settle their own disputes by allowing “when in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration (par. g, Art. 263).

IRR Book V, Rule XXII. Picketing, Strikes and LockoutsSection 1. Grounds for strike and lockout. A strike or lockout may be

declared in cases of bargaining deadlocks and unfair labor practices. Violations of CBA, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered unfair labor practices and shall not be strikeable. No strike or lockout may be declared on grounds involving inter-union and intra-union disputes or on issues brought to voluntary or compulsory arbitration.

Section 2. Who may declare a strike or lockout. A certified or duly recognized bargaining representative may declare a strike in cases of bargaining deadlocks and unfair labor practices. The employer may declare a lockout in the same cases. In the absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the establishment may declare a strike but only on the grounds of unfair labor practices.

Section 3. Notice of strike or lockout. In cases of bargaining deadlocks, a notice of strike or lockout shall be filed with the regional branch of the Board at least thirty (30) days before the intended date thereof, a copy of said notice having been served on the other party concerned. In cases of unfair labor practice, the period of notice shall be fifteen (15) days. However, in case of unfair labor practice involving the dismissal from employment of any union officer duly elected in accordance with the union constitution and by-laws which may constitute union-busting where the existence of the union is threatened, the fifteen day-cooling off period shall not apply and the union may take action immediately after the strike vote is conducted and the results thereof submitted to the appropriate regional branch of the Board.

Section 4. Contents of Notice…


Section 6. Conciliation … Section 7. Strike or lockout vote …Section 8. Declaration of strike or lockout …Section 9. Improved offer balloting. In cases of a strike, the regional

branch of the Board shall, at its own initiative or upon the request of any affected party, conduct a referendum by secret balloting on the improved offer of the employer on or before the 30th day of strike. When at least a majority of the union members vote to accept the improved offer, the striking workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement.

In cases of a lockout, the regional branch of the Board shall also conduct a referendum by secret balloting on the reduced offer of the union on or before the 30th day of the lockout. When at least a majority of the board of directors or trustees or the partners holding the controlling interest in the case of the partnership, vote to accept the reduced offer, the workers shall immediately return to work and the employer shall readmit them upon signing of the agreement.

Section 10. Hiring of replacements. The mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment even if a replacement had been hired by the employer during such lawful strike. But any union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status.

Section 11. Prohibitions regarding the employment of replacements. No public official or employee, including officers and personnel of the Armed Forces of the Philippines or the Philippine National Police, or any armed person shall—

(a)Bring in, introduce or escort, in any manner, any individual who seeks to replace strikers in entering or leaving the premises of a strike area.

(b)Work in place of the strikers. Nothing herein shall be interpreted to prevent aforementioned officials,

employees or peace officers from taking any measure necessary to maintain peace and order and/or to protect life and property.

Section 12. Peaceful picketing. Workers shall have the rights to peaceful picketing. No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to and egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.

No person shall obstruct, impede or interfere with, by force, violence, coercion, threats or intimidation, any peaceful picketing by workers during


any labor controversy or in the exercise of the right to self-organization, for collective bargaining or shall aid or abet such obstruction or interference. No employer shall use or employ any person to commit such acts nor shall any person be employed for such purpose.

When agreement is signedIRR Book V, Rule XVI, Registration of Collective Bargaining AgreementsSection 1. Registration of collective bargaining agreement. The

parties to a collective bargaining agreement shall submit to the appropriate Regional Office two (2) duly signed copies thereof within thirty (30) calendar days from execution. Such copies of the agreement shall be accompanied with verified proof of posting in two conspicuous places in the workplace and of ratification by the majority of all the workers in the bargaining unit.

Such proof shall consist of copies of the following documents certified under oath by the union secretary and attended to by the union president.

(a)Statement that the collective bargaining agreement was posted in at least two conspicuous places in the establishment at least five (5) days before its ratification, and

(b)Statement that the collective bargaining agreement was ratified by the majority of the employees in the bargaining unit.

The legal environment in sum Encourages reliance on the law and legal processes to come up with a

contract that binds a relationship that is more than legal in nature Encourages division thru bilateralism, thereby reinforcing labor and

management as separate corporate entities Allows partied to recognize disputes as inherent process of the system Promotes dependence on third-party intervention to solve issues and

concerns that could be resolved by parties themselves

The Socio-Political Economic Environment

State of Socio-Economic ConditionsAbounding are socio-economic conditions that reinforce current

practices in collective bargaining. If parties are not made aware, these conditions sustain traditional approaches to collective bargaining.

1. PovertyWidespread poverty emphasizes income inequality which influences

organized labor’s ideologies and political persuasion. This situation is also


exploited by politicians who, in one study states, that it is advantageous to them to allow great number of poor to remain poor as a rich source of votes. Collective bargaining thus becomes a political rather than an economic process.

2. Widespread UnemploymentThe union, recognizing a greater societal aim, is forced to be responsible for economic goals that should be the government’s primary concern. Unions are forced to protect jobs, or expand employment where it might be impractical because of efficiency, or technology improvements and other economic factors.

Indicator Figures1999

Figures2000

Labor Force 30,759,000 30,911,000Employed 27,742,000 27,452,000

Underemployed 6,127,000 5,955,000Unemployed 3,017,000 3,459,000Unemployment Rate 9.8% 11.2%


3. Poor Economic Conditions The overall economic conditions are not supportive of employee mobility where jobs should abound, pressuring unions to strongly protect jobs. The few employment opportunities outside of the company exerts strain on labor and management, increasing further divisiveness between aims of job security and cost efficiency.

1997Region

Annual Per Capita Poverty Threshold

Poverty Incidence in %

Magnitude of Poor Families

NCR P14,299 6.4 127,873Reg. 4 12,452 25.7 497,858Reg. 5 10,378 50.1 485,356Reg. 7 8,718 34.4 360,159

4. Poor HR InfrastructureThis country is saddled with a poor educational, training and

development system that does not equip labor with skills flexible enough to compete in the labor market, much less create their own market for self-employment. 5. Strong, elite and limited organized labor

More than 12% of the labor force is organized while only less than 3% of employed are actually protected by CBAs, providing a picture of a greater workforce that is not represented, have no voice and no protection beyond a poorly implemented labor code. However, unions are accorded much importance and recognition in governmental institutions.

Indicator 1999 2000Active Unions 9,850 10,296Membership 3,731,000 3,788,000

% of Labor Force 12.13% 12.25%% of Employed 13.45% 13.78%

Workers Covered by CBAs

529,000 484,000

% of Employed 1.94% 1.76%

6. Inwardly looking economic managers and capitalists The above characterization— ascribed historically from years of

protectionism, whether right or wrong, did not prepare us for the reality of


globalization and intense competition, resulting even more to failures of private companies and government-led economic activities.

II. The Approaches to Collective Bargaining

Positive Attitudes & Values Towards Unions and Collective Bargaining

a) Collective Bargaining (CB) is highly flexible method of decision-making, far more so than legislative, judicial or public administrative processes could be expected to be.

b) CB can be used as an instrument for applying equity or social justice to the industrial setting. Because the individual worker could not be adequately protected through individual dealings with his employer, there gradually developed a process that allowed the combined strength of workers to offset the initially superior bargaining power of the employer. Reinforced by public policies increasingly favorable to collective bargaining, workers organizations assumed a share of responsibility for the proper operations of a joint rule-making system.

c) Collective bargaining is also a means of ensuring workers” participation in decision-making. Collective bargaining represents a diminution of absolute management power in fields which employers in past considered to be exclusively within their won domain.

d) CB provides for an orderly procedure by which each side can seek to present to the other the best possible case for the satisfaction of its particular demands. There is no guarantee of an agreed outcome, but the process of negotiation creates at least the possibility that each side may closer to the attainment of its own objectives, both where they differ and where they are identical.

e) CB elicits the consent of those who will have to live under the terms of any agreement derived from the bargaining process. Stability is an important element in employment, and “consent assures stability because parties who have accepted an agreement will live by its terms.” To the extent to which notions of democracy can be applied to employment, as indeed they have been on an increasing scale, collective bargaining helps to substitute freely given consent for grudging or blind obedience.

f) Its usefulness for solving problems. This emphasizes its functions as a means of resolving conflicts of interest in situations


characterized essentially by scarce resources. The conventional view of collective bargaining emphasizes its function as a means of resolving conflicts of interest in situations characterized essentially by scarce resources. In purely distributive bargaining, what one party gains, the other loses; however, another view of the possibilities inherent in collective bargaining emphasizes its use as an “integrative” or “creative” process from which both parties can derive benefit.

Parties to Collective BargainingTwo basic assumptions about parties in negotiationFirst, each party assumes that each side has an incentive to deal with

each other, in that each has something the other wants. Second, that there is a disagreement over the level at which the

exchange can take place. Other Elements in Bargaining1. Bilateral monopoly—assumption of no choice but to negotiate with each

other; that only the union has the right to sell its labor to management, and only this management has the right to buy it—thus the incentive to bargain and to reach a settlement.

2. Clearly defined bargaining issues—negotiations actually tackle a range of issues that can be clearly defined.

3. Contract zone—for each issue, the parties have opening offers, target positions, and resistance points. A resistance point indicates the minimum acceptable level on the spectrum on which the party would be willing to agree. Beyond that point the party would refuse to settle and thus be willing to accept the economic consequences of a breakdown in negotiations.

4. Convergence model- parties in good faith through offers and counter offers, move closer toward each other, gradually converging toward a point of potential agreement.

Labor Characterization Highly politicizedThe image of labor is highly politicized (there should not be any debate whether one is enlightened or not). There are two overlapping types of union objectives—economic and political. Economic rights are normally pursued using collective bargaining strategies, while political rights are granted by law. Ideally, unions go on from political to economic goals because most political rights are given by social legislation.


Collective bargaining is an exercise to achieve economic goals at the company level. When political issues enter the picture, the framework is disturbed because normally these rights are not controlled by the other party—management. Collective bargaining with management thus becomes an improper forum for trying to realize objectives not normally within the ambit of control of management.

The Monopoly Face of UnionismUnions are seen as having negative effects on the economy, with these

following perceptions: On Economic Efficiency

Unions raise wages above competitive levels, leading to too little labor relative to capital in unionized firms

Union work On Distribution of Income

Unions increase income inequality by raising the wages of highly skilled workers

Unions create horizontal inequities by creating differentials among comparable workersOn Social Impact

Unions discriminate by rationing positions using their criteria Unions fight for their own interests in the political arena Union monopoly power breeds corrupt and non-democratic elements1

Limited Perspective of the Role of Collective BargainingShort-term non strategic

Most business processes are strategic—characterized by Long term focus Consideration of external and internal factors Comprehensive and integrated Implemented and reinforced by internal systems and processes Constant evaluation and feedback.

Non-recognition of business implicationsVery few CBAs have reference to business facts and processes, mainly

because it is a legal contract. Yet the contract has implications on all aspects of running any business.

1 What do Unions Do?, Richard Freeman and James Medoff, 1984


The Theory of Distributive Bargaining Two distinct parties: Labor and Management Different but actually interdependent goals Perceived Incompatible goals give rise to competitive bargaining Fixed-sum assumptions

o Profit or economic-pie is fixed that must be sharedo Labor always aims to get a bigger share compared to beforeo Management protects its proportionate share of the pie

These assumptions give rise to Competitive and positional bargaining Hard bargaining or hardening of positions Attitude of win-lose negotiating

Characteristics of Traditional BargainingExclusivity of Interests

Management Objectives

Possible Intersection of

Interest

Labor Objectives

Flexibility of managing enterprise

Job security

Increased profitsReturn on stockholders

equity’

Higher WagesShare on productivity

improvementEfficiency, lower labor

costsBetter benefits

Lower operating costs Better physical conditions of work

Leaner workforce, flexible work

arrangementsExpansion without new

employment

More employment, increased union

membership

Protecting market share Industry union cooperation

Greater job coverage, rotation, job flexibility

Job satisfaction

Greater management control,

Industrial democracy, greater participation at



Possible Intersection of

Interest

Labor Objectives

Management prerogative work

Value of meritocracy and performance

Seniority means acceptable consistent

performance Capital accumulation

Long termWelfare tendencies

Short termOthers?

If these are not deemed reconcilable, parties consistently see issues and concerns from two differing perspectives. Those views reinforce traditional distributive bargaining. Positional BargainingAlso known as Pigou’s Original Bargaining Model2, explains a bargaining range where labor and management set upper and lower wage limits within which a final settlement is explored and settled. Labor sets an upper limit representing an ideal wage increase where during the negotiation process it will gradually reduce such. It will also set a sticking point at which it is willing to endure the lost wages and hardships of a strike or lockout rather than accept a wage rate lower than that. Management essentially does the same—offering an ideal wage increase, and conceding increases along the way. But will also set a sticking point where it would rather accept a work stoppage before it grants a wage concession greater than that.

Union’s upperlimit

Union’s

2 Collective Bargaining and Labor Relations, 1995. Terry C. Leap


Employer’s sticking point

Employer’s lower limit

Possibility of strike or lockout

sticking point

Behavioral Characteristics of Positional Bargaining No free exchange of information; if ever, slow revelation about

acceptable position levels Secretive strategizing—the lesser known about internal strategies the

better Offers and counter offers are way off acceptable levels, or minimal

increments over last offer Discourages openness, honesty and open communication Sometimes, parties go into sarcastic or antagonistic mode of

interaction

Issues in Positional BargainingSeparate, differentiated measures

What does profit mean? What does lugi mean? What is just profit? How does labor measure wages? What goes into a benefit package? What is meant by living wage? Family wage? What is an acceptable standard of living? Inflation? Purchasing power? What are employer’s economic obligations? What are employees’ business obligations? What is the rationale for annual increases in compensation? What is the rationale for hierarchy of compensation?

Modes of conflict resolution Assumption of worst case scenario—preparation for a strike or lockout

starts on the first day of negotiation Protracted strike or lockout Aversion to government intermediation, mistrust for third-party

intervention Yet no initiative to resolve conflict on their own Behavioral strategy, if not forcing, compromise; not problem solving


Illustrations of Unresolved Issues The right to subcontract extra work; implement contingent work vs. the

choice to render overtime and earn extra income Union shop vs. freedom of choice Seniority vs. performance in promotions Scheduled leaves vs. personal choice leaves Hiring of relatives vs. free selection The right to transfer vs. preference of work and place Strict implementation of work rules vs. pakiusap, pakikisama Regularization vs. keeping variable costs down Safety concerns vs. comfort

Behavioral Negotiation Techniques Use of sarcastic if not berating language Each party assumes ascendant position Delaying tactics Reference to limited authority Reference to bottom line Small concessions, large gains Use of statistics to exaggerate Use of threats and promises Use of anger and aggressive behavior Boulwarism—one final offer Reverse psychology Mutt and Jeff techniques Passive-aggressive

Communication Patterns Telling the other party what to do: You must; I expect you to Threatening: You better; If you don’t Telling what needs to be done: You should; It’s your responsibility Making unasked questions: Let me suggest; Mas maganda kung … Attempting to educate: Let me give you the facts; Experience has

shown Giving insincere praise: We know you are fair; We are dealing with just

people Putting labels: You are always shouting; You are not trustworthy Psycho-analyzing: You always mistrust us; You always give double

meanings Making light of situations: Things will get better; Look for the silver

lining


Showing suspicion: Where did you get that information?

Competitive Negotiation Tactics Seeking to conduct negotiations on non-neutral grounds Demand discussion of agenda items; curtail discussions of other

party’s item Ignore or discount the other party’s demands and requests Insist other party make initial offers or demands on all items Respond with very low offers or very high or strict demands Commit to each item; exaggerate your position and discredit the other

party’s Demand that the other party make concession; back up demand with

threats Delete, add or yield only on low-interest items Magnify degree of your own concessions; downplay the other party’s Seek large concessions from the other party Concede only minimally on high-interest items Use concessions on low interest items as bargaining chips3

Roots of Collaborative Bargaining and Study Team Technique

Social Dialogue“In its most diffuse and general usage, it seems little more than

another term for industrial relations, involving collective bargaining and other means of pursuing agreement between employers and representative of workers.

“In a second meaning, it is distinguished from collective bargaining, indicating a process of exchanging information and viewpoints which may ultimately facilitate successful negotiation but is not itself a negotiating process.

“In a third sense, it indicates a particular institutional configuration designed to encourage consensual or positive-sum interaction.

“Fourthly, it may denote a normative orientation towards “social partnership” and the avoidance of conflict.”4

3 Negotiation, 1999. Roy Lewicki, et al. Third Edition4 Social Dialogue in Western Europe: The “State of the Art” by Richard Hyman, 2000. International Labour Office, Geneva


The Hierarchy of Development in Labor-Management Active Collaboration

Social Dialogue(Societal level)

Partnering or Partnership Philosophy(Corporate IR level)

Collaborative or Integrative Bargaining(Bargaining level)

Study Team Technique in Negotiation(Negotiating Technique Level)

Partnering Philosophy in Labor Relations Belief in the union as a full partner in all organizational activities, even as

it retains its distinct identity The Union is treated as a factor in productivity Union involvement in strategic as well as operational activities Active implementation and pursuit of employee empowerment Full provision of training and development programs to hasten maturity

levels of employees Opportunities for employee to own company shares Management’s belief in capacity of employees to engage in mature

decision-making Recognition and agreement of superior organizational goals as

encompassing all sub-goals of management and labor The Union is a partner in disciplining employees while remaining a

fiscalizer of management

The philosophy of partnering is a basic precondition to the success and effectiveness of integrative bargaining and study team technique in negotiation.


The Theory of Integrative Bargaining5

Collaborative bargaining occurs when parties work together towards an agreed upon supra-organizational goal, like SURVIVAL. It is essential that parties agree on the overall goal, and as much as

possible on its parameters The review of the parameters of these goals is on-going and regular, thru

a recognized structure and process (i.e. strategic planning) The process of collaborative bargaining is strengthened with accurate and

free flow of information Parties adopt an attitude of sharing rather than concealing information The process of paradigm shift is difficult at first The end result in labor-management relationships is a symbiotic and

productive one The economic pie is seen as an issue or challenge of increasing rather

than just of sharing This bargaining philosophy recognizes problems as opportunities to

improve—a problem solving culture is engendered

Collaboration As a bargaining technique, Collaboration is a process through which parties who see different aspects of a problem can constructively explore their differences and search for solutions that go beyond their own limited version of what is possible

There is a need for Collaborative Problem Solving when … The nature of problems

o Ill defined; disagreements over how to defineo Various stakeholders with vested interestso Stakeholders need not be aware of their identificationo Disparity of power and resources among partieso Stakeholders have different levels of expertise and access to

information Often characterized by complexity and uncertainty Differing perspectives often lead to adversarial relationship Unilateral efforts to deal with problems often produce less than

satisfactory solutions Existing processes for addressing issues have proved insufficient; may

exacerbate them

5 E. Edward Herman, 1998. Collective Bargaining and Labor Relations.


Dynamics of Collaboration Translated into Study Team Techniques Collaboration implies interdependence of parties, of goals Solutions emerge by dealing constructively with differences

Diversity of interests make for possible agreement Different perspectives complete a picture Communicating differences avoid stereotyping

Collaboration involves joint ownership of decisions Implements a process of joint search for information Invention of mutually agreed upon pattern of future exchanges

between stakeholders Ratification of processes, structures, not just plans and agreements

Stakeholders assume collective responsibility for future direction Collaboration is evolving process

Not a state to be achieved by a continuing process

Process of Active Collaborative Negotiation and Study Team Technique1. Actors to act on internal team agreement to principles of ACN and STN

a. Deal with affective concerns—Ano ang ating agam-agam? Bakit? Paano ito mareresolba? Anong prueba ang kailangan? Anong epekto nito sa ating liderato? How would management deal with long term implications?

b. Internal collective bargaining—Sino ang hindi kumbinsido? Bakit? Paano kapag bumalik ang dating paniniwala?

2. Implementation of confidence and trust building strategiesa. Industry benchmarkingb. Process benchmarkingc. Opening up of free flow of informationd. Opening up standards of business performancee. Socialization strategies

3. Inter-party teambuilding handled by outside or neutral facilitators4. Resolving real or perceived conflicts

a. Surfacing issues and concernsb. Actively dealing with historical sources of conflictc. Putting in place regular mechanisms for resolving conflict

5. Partnering proactive mechanisms


a. Have parallel structures for involving union in productivity and efficiency matters

b. Invoke proactive philosophy in dealing with labor and discipline matters

c. Let union deal actively with labor matters; invoking maturity and integrity

6. Advancing shared visionsa. Defining collective goodb. Anchoring specific good on the collective good

Exercise: Try to look at these specific goals, and link them to collective goals


Collective Good Labor Objectives

Flexibility of managing enterprise

Job security

Increased profitsReturn on stockholders

equity’

Higher WagesShare on productivity

improvementEfficiency, lower labor

costsBetter benefits

Lower operating costs Better physical conditions of work

Leaner workforce, flexible work

arrangementsExpansion without new

employment

More employment, increased union

membership

Protecting market share Industry union cooperation

Greater job coverage, rotation, job flexibility

Job satisfaction

Greater management control,

Management prerogative

Industrial democracy, greater participation at

workValue of meritocracy and

performanceSeniority means

acceptable consistent performance



Collective Good Labor Objectives

Capital accumulationLong term

Welfare tendenciesShort term

Others?

7. Study groups or study teams are formed for every issue or concern identified in the CBA

a. Teams identify fundamental goals and stakeholders sub-goals; they analyze flow of occurrence (e.g. like stream analysis)

b. Teams try to agree on common measures and definitions; parameters and boundaries

c. Teams research, gather evidence togetherd. Teams explore solutions in a workshop manner—circular seating

arrangement, alternating with each partye. Question and answer data gathering and problem solving

technique to arrive at solutions vs. demand and counter offer (may be allowed to explore stakeholder interests)

8. Solutions could be agreed upona. As ultimate/target in a pre-decided parameterb. Range of possibilities with givens

9. The solutions are transformed into a legal document, just like in a CBA.

Other Related Literature: The Mutual Gains Enterprise by Kochan6

“What kind of an enterprise can help restore competitiveness in industry? There is a remarkable consensus among a wide range of scholars, management writers, labor leaders and human resource professionals…

“These principles are not derived only from academic theory or from the mistaken glorification of a single organization’s economic success. The consensus is the product of both theoretical and empirical research and more than a decade of trial and error and comparison of traditional and transformed human resource and organizational practices. What sets this consensus apart is that no single practice is seen as the silver bullet or simple solution. Rather, it is the combined and mutually reinforcing effects of a broad-based and deep commitment to these principles followed

6 The Mutual Gains Enterprise: Forging a Winning Partnership among Labor, Management and Government, 1994. Thomas A. Kochan


by effective implementation that add up to a new system of employment relations.

Principles Guiding the Mutual Gains EnterpriseStrategic Level

Supportive business strategiesTop management commitmentEffective voice for human resources in strategy making and

governanceFunctional (Human Resource Policy) Level

Staffing based on employment stabilizationInvestment in training and developmentContingent compensation that reinforces cooperation, participation,

and contributionWorkplace Level

High standards of employee selectionBroad task design and teamworkEmployee involvement in problem solvingClimate of cooperation and trust

Collaborative Negotiating Tactics Seek to conduct negotiations on neutral ground; convert available ground

to friendly ground’ Elicit the other party’s agenda items, and assert your own items;

incorporate both Consider other party’s demands and requests Alternate initial offers and demands on items with other party Respond with moderate offers or moderate demands Indicate reasons for commitment to item outcomes; probe the other

party’s reasons Seek equitable exchange of concessions with the other party Delete, add, or yield items if mutual interests converge Honestly assess your and the other party’s concessions Seek equitable exchange of concessions from the other party Seek mutually beneficial outcomes when conceding or accepting

concessions on items7

7 Negotiation, 1999. Roy Lewicki, et al. Third Edition


Behavioral NormsParties in the study team must try to observe the following behavioral norms. It is a good practice to stop when there’s a tendency to revert to traditional bargaining. This is a common possibility because of differing stakeholders. A designated “reminder” within each party will cool down emotions when things get tough. There must be no effort at establishing psychological advantage thru

location, time, agenda, positions, concessions, etc. There must be no effort at withholding information Every party can seek to clarify issues and facts in an open and honest

manner The team explores acceptable solutions rather than “going for least

expectations” Members of the team do not put each other on the defensive, invoking

inability to compromise; of being the bad guy Lapses of regressing to narrow stakeholder interests will be coached back,

gently reminded, rather than scorned Teams have ultimate authority to decide within accepted parameters; or

decisions have greatest influence Avoid us vs. them strategies Teams go into lots of details and information before making decisions Members strive to control emotions as they color perceptions Do not reject and rebut arguments within the team; reframe attempts to

deal with the problem with collective or fundamental goals in mind Respect personal relationships; avoid ascendant attitude Always emphasize mutual interests

Problem Solving Approach During the STN1. Define the situation. What makes it a problem? ]2. Diagnose causes of problem

a. Gather datab. Use tools of analysis: fishbone diagram, frequency tables

3. Generate alternatives and options. Cite pros and cons for every option4. Always anchor solutions on mutual goals and objectives5. Choose best solution, define rationale

Illustrative Case through WorkshopLabor proposes the granting of Perfect Attendance Incentive


1. What is the main objective of the proposal? Does the proposal resolve an issue or problem?

2. What are related issues and concerns to this proposal? 3. What are related management goals?4. Explore alternatives with the same objectives5. Decide whether to adopt incentive or another, but gaining the same

objective

Traditional Negotiation Mistakes and How to Avoid Them1. Use of win-lose approach. Focusing on narrow stakeholder interest.

Always use a win-win approach.2. Inability to challenge negotiation styles results in breakdown of

communication. Team negotiation is designed to be as flexible as possible using problem solving approaches.

3. Satisfying others because of relationship rather than finding solutions to a problem. Focus on solutions that benefit both parties.

4. Bargaining vs. negotiating. Focus not just on the bottom line but on how costs are incurred, elements, causes, etc. Use detailed information to understand problems.

5. Traditional negotiators use a fixed target. Team negotiators use a range of values to allow for a probability of success.

6. Traditional negotiators fail to choose own team members properly, not being able to control their own team. Team negotiators pay attention to potential team personalities, knowledge of the situation, egos, ability to work as team member, shared interest in reaching a reasonable settlement, past history and so on.

7. Traditional negotiators often fail to establish priorities. Team negotiators recognize what can, within specific limits and non-negotiables.

8. Traditional negotiators fail to plan and anticipate other perspectives. Team negotiators look at the big picture.

9. Traditional negotiators negotiate with unclear authority. Team negotiators establish authority.

10. Traditional negotiators take notes and debrief. Team negotiators take notes, clarify, and track progress.

Skilled Team Negotiators1. Planning Skills

a. Long effective planning timeb. Exploration of range of optionsc. Establish common ground


d. Long term focuse. Setting acceptable limitsf. Negotiates linked issues

2. Face to face behaviorsa. Avoids verbal “irritators”; self-praises; favorable things about

themselvesb. Explores of issues rather than just counter proposalsc. Uses respectful language: Can I ask a question; What if; If I could

make a suggestiond. Can test for understanding; Can summarize for clarificatione. Asks questions f. Gives internal information—how one feels; expression of feeling

build trust3. Interpersonal skills

a. Express strong feelings appropriatelyi. Recognize feelingsii. Being awareiii. Develops a range of expressioniv. Relates tone to substance

b. Remains rational in the face of strong feelingsi. Acknowledges feelingsii. Remains above the frayiii. Surfaces emotions; lets them all outiv. Separates causes of feelings from substantive problemsv. Is purposive

c. Be assertive without damaging the relationshipi. Disentangle relationship issues from substantive issuesii. Be soft on the personiii. Be firm but open

d. Improve relationships without damage to a particular outcomei. Good relationships help reach good outcomesii. Try to acknowledge merit in something they have doneiii. Acknowledge a need on your part

e. Speak clearly to promote active listeningi. Speak for yourselfii. Avoid attribution and check assumptionsiii. Use short and clear statementsiv. Ask them to repeat what we’ve said


f. Actively inquire and listeni. Explicitly allocate time to listen and understand the other

sideii. Separate understanding their arguments from judging and

responding to themiii. Repeat back their statements in your own wordsiv. Inquire actively about the reasoning behind their

statements.

III. The Workers’ Association, Its Goals and Bargaining Needs

1. What is a Labor Organization?

- any union or association of employees which exists in whole or in part for the purpose of collective bargaining or dealing with employers concerning terms and conditions of employment (Labor Code Art. 212,g.).

a. Importance of Understanding Unions1. to understand how the union defines its purposes and how these

are translated into bargaining objectives; 2. to understand the power structure of unions and how decisions are

made within it;3. to understand the different bargaining needs of its leaders, its

members, and other sectors within it, like its women members, and;

b. Structure of UnionsA typical union structure is the organizational set-up of the union that

facilitates cooperation among the members and the officers. It shows the source of the decision-making authority of its officers, and how the membership has the final authority on all matters (in theory, that is).

1. General Membership Assembly or Congress- highest decision-making body of a union, composed of all members of

the union or their representatives, and from it emanates all the power within the union.

2. Executive Board or Council


- immediate representatives of the general membership, composed of unit or chapter representatives and the executive officers. It lays down the specific plans and policies in reference to the general decisions of the membership.

3. Executive Officers- acts as the implementing arm of the union. It is tasked to oversee the day-to-day operations of the union, decides on actions required in the implementation of its programs and activities.

4. Working Committees - main operating units of the union. It specializes on a specific task,

concern or problem, such as on a particular program; well-organized and well-functioning unit of the organization and assist the executive officers in the direct implementation of plans and programs, e.g. labor education committee, finance committee, publication committee, social welfare, etc.

c. Types of Unionism by BeliefsUnions have different political or ideological leanings or beliefs.

Political beliefs tell us about the general direction of unions, as these beliefs become the overall framework within which union activities are conceptualized, pursued and implemented. The political beliefs of unions are usually reflected in their range and depth of bargaining goals.

1. Political-led UnionismA type of unionism that gives priority to national, political and legal

issues and considers unions as instrument firstly and primarily for political power, only secondarily as vehicles to uplift workers’ condition. It advocates control of unions by a labor party that aims to seize state power. It relegates trade union struggle as secondary to the over-all political or armed struggle of the party. In this case, decisions are made by the political leaders rather than by the general membership.

2. Genuine UnionismStanding on the “authentic” principle and objectives of unionism, this

brand of unionism balances the economic, political, and ideological concerns of the workers, advocating a holistic view of unionism. Genuine unionism is founded on the following basic principles: democracy, independence, unity, militancy, responsibility, and solidarity.

3. Economic UnionismAlso known as “rice and fish or bread and butter” unionism. These

unions’ philosophy limits the goals of trade unions to economic demands and limited political demands that can be responded at the enterprise level.


They focus on wage increases and other financial benefits. It regards political issues as secondary or not so important, and concerns itself on the material well being of its members. Indifference to the societal and political issues limits its participation in initiating changes in the society.

4. Yellow UnionsThis is the worst type of unionism because it collaborates with the

management at the expense of the workers. Usually it comes out with a “sweetheart contract” with the management. Supposedly fights for the interest of the workers, but in the end, bows down to the wishes of the management. Labor organizations that practice this type of unionism are called “company unions”.

d. Structures of Unions

1. Independent UnionThis is an enterprise-based union that is not affiliated with any

federation. A union of this kind conducts its progress and services by itself, and does not have support from a mother organization, such as a union federation.

2. Local UnionIt is affiliated with a certain labor federation, which in turn is part of a

center. It has either acquired its legal personality by joining with a duly registered federation or by registering itself but still retaining its membership in a federation.

3. Craft UnionThis is the earliest type of unions; composed of workers of a specific

craft or skill, for example, electricians, irrespective of their place of work and who their employers may be. Salesmen and monthly salaried employees, and other homogeneous (iisang klase o katangian) employees which comprise a union could be considered a craft union.

d. General FederationIt is an aggrupation of local unions regardless of their employer,

industry or skills. This type of union is based on the premises that workers can easily advance their interest if they link up with workers in other workplaces. The Labor Federation as a central organization provides services to the member unions and usually initiates local organizing.

e. Industry UnionIt organizes all workers within a specific industry, e.g. the food

industry, metal or chemical industry. Thus, skilled, unskilled, white or blue collar, all belong to one union or federation as long as they work in that


particular industry or sector, e.g.. The National Union of Workers in the Hotel and Restaurant Industry (NUWHRAIN).

f. ConfederationThis is federation-type of organization whose members are organized

according to their sectors or industries. Thus, the basic unit is not local union, but rather, the sectoral aggrupations or industry unions.

g. AllianceIt is the aggregation of unions in one line of industry, in a

conglomerate (different companies with same owner), in a geographical area or in an industrial center. These are generally issue-based organizations with membership coming from several federations and were formed for purposes of coordinated unions actions.

In any alliance, each member-union retains its own organizational structure and identity. Any union, independent or affiliated can join an alliance. This is mainly to voice their interest.

Example: a) area-based: K’SAMA-SAMA (KAB-KAMAO): Kristiyanong Samahan ng mga Manggagawa sa Mandaluyong.

b) Industry-based: GATELA (Garments and Textile Labor Alliance)

c) Conglomerate: Ilaw at Buklod ng Manggagawa (IBM, San Miguel Corporation Subsidiaries)

h.. Labor CenterIt is an organization of workers, which is national in scope and consists

of local unions, federations, industry union and alliances. It seeks to represent all workers on issues that are national in character. It also takes up issues that have impact on the society as a whole and asserts the laboring people’s position in such concerns. It also negotiates/lobbiee with government in matters such as labor legislation, wage increases, and on economic and other social policies. As whole, it operates in the realm of politics and economy.

The major labor centers in the country are the following:1. Lakas Manggagawa Labor Center (LMLC)2. Kilusang Mayo Uno (KMU)3. Trade Union Congress of the Philippines (TUCP)4. Federation of Free Workers (FFW)5. WFTU Affiliates

2. Goals and Objectives of Unions

a. Goals


Unions exist to represent the interests of workers in the determination of terms and conditions of employment. Through collective bargaining, the rights and welfare of workers are thus protected and advanced.

Unions also exist to create a working environment that is conducive for development, productivity, equitable distribution of power and wealth as well as for cooperation and equal opportunity to all.

b. Objectives

1. Economic development and welfareThe primary motive why workers join or form unions is their

unfavorable living and working conditions for which they want to make changes. Perennially confronted by low wages, lack of benefits, suppression and job security problems, workers form union for collective action.

2. Respect and protection of rightsEmployers do not have absolute power over its workers. Workers have

their rights too that must be recognized and respected. Unions are formed as a protection against possible abuses by management and to ensure the recognition of these rights.

3. Social responsibilityUnions also link up with other unions and other sectors to focus efforts

on societal problems such as unemployment, human rights abuses and other worker rights.

4. Humane, relevant and nationalist cultureUnions impart different values and attitudes. Its socio-cultural

perspective has for its objective the humanization of the person. Submissiveness and indifference and passivity are traits which unionism seeks to abolish.

5. People’s empowermentOne’s capacity to act, participate decisively and influence the course of

events simply means empowerment.

c. Principles of Unionism

1. Democracy. Since unionism is a collective undertaking, the essence and practice of participative democracy must be manifested in every degree of organizational motion. Hence, the decision-making processes must be ensured that each and every member is afforded his rights and duties.


2. Independence. Unions are autonomous organizations of workers. It must remain independent from the control of management/employer, political parties and government. It must constantly assert and protect the interests of workers.

3. Unity. As a basic principle, the concept of unity involves struggle. Workers’ unity is a source of power, which shields them from the built in advantage of employers as to resources and degree of influence in society.

4. Militancy. Unions are organizations whose main strength lies in the collective actions of its members. Its main weapons are political actions, concerted activities and the right to strike in pursuing the struggle for improved terms and conditions of work.

5. Responsibility. Workers are accountable not only to their sector but to society itself. Responsible unionism means tempered and sober use of workers’ rights, including the indispensable right to strike. This holds true especially in the public services where public office is a public trust.

6. Solidarity. Unionism is anchored on the belief that workers must confront their problems and assert their rights collectively. Solidarity is but an expression of unity among all workers, both private and public. Thus, trade unions must form or join union communities in the local, national and international levels free form any restrictions, whether occupational or geographical in nature.

d. Long Term Interests of Unions

The following situations portray the long-term goals of unions. These are pictures of conditions at work that could be ideal for employees in terms of participation and economic security.

1. Industrial democracy- a system of labor relations that characterizes a programmed and systematic approach to more worker emancipation in the economic and social sectors combines with redistribution of power, equitable income, and greater workers’ participation in decision-making.

2. Co-ownership- a long term goal in which workers through the unions are part owners of the company. The processes for co-ownership could be bargained for in the form of employees stock options which are payable over a number of years through salary deduction.

3. Co-determination- a system of workers’ participation where workers’ representatives sit as full members on the supervisory or


management bodies administering the company or enterprise. This labor-relations system is institutionalized in Germany.

4. An incomes policy- a belief that the level of standard of living increases with high wages, and high productivity. Workers enjoy a high level of living given high wages that could afford goods and services, thereby increasingly economic activity that redounds to increased economic growth.

3. The Flow of Political Power Within a Union Organization

The heart of daily activities of industrial relations exists at the firm-based union, the local union or the independent union. It is at this level or organization where the union members participate in most undertaking. Unions should operate just like any other organizations, even similar to a business organization.

The union is guided typically by the executive committee to serve and meet the needs of the rank and file. It is the executive committee’s responsibility to ensure that the day to day operations are handled effectively and efficiently; collecting dues; forwarding dues to the federation, working with management in negotiating, implementing and administering the contract. In other words, the union is to effectively represent its workers-members.

Two major purposes of the union are seen from its responsibility. These purposes revolve around contract negotiation and handling grievances. The union, with or without the assistance of the federation representatives, conducts the collective bargaining sessions with management.

It is the union’s responsibility to be aware and to try to achieve through negotiations the desired needs of each member.

Thus, the local union must be well informed of its members’ expectations. This can be obtained in various ways, through surveys (with questionnaires), but particularly through membership meetings. After negotiations have been completed, union officers present the package to the rank and file members for ratification.

As part of the contract administration, the union’s representative--normally the union show steward--ensures that the contract is being correctly followed. Any deviations or violations of the contract arising from its implementation can result in a grievance being filed. The union at the firm processes the grievance and ensures that it is resolved appropriately.


Union Management

General Membership Top Management

Board of Directors Middle ManagementExecutive Committee Lower ManagementOther Committees Workers or EmployeesGeneral Membership

In management, the power to make decisions resides at the very top level, usually reserved for the board of directors, the chairman of the board or the company president. The president usually has absolute power, however an executive committee consisting of vice presidents typically works with the president in making strategic decisions regarding the company. Beyond this top level of management, many organizations have a middle layer of managers. These managers take directions from the strategic goals of the organization. In an organization, middle-level managers typically have power and authority limited to the extent desired by top management.

Beyond the middle level of management is first line supervisors who direct workers activities. First line supervisors generally have the authority and power necessary to complete the tasks they manage. Their authority is rather limited. Under the supervision of the first line supervisors is the majority of individual in an organization, the employees or the workforce. In a classical organization structure, these employees have no authority or power, they simply follow the direction of management.

In contrasting labor and management structures, it is apparent that in unions the majority is supposed to rule and in management the minority makes the decisions. For the most part, these structures serve their respective organizations well. In unions, it is necessary for the expectations of all members to be heard. Accordingly, unions must afford all members the opportunity to voice their concerns. In management, as the saying goes, too many cooks spoil the pot. Running efficient and effective organizations requires clear direction, clear lines of authority and accountability and good communication flows.

a. Problems in Negotiating Attributed to Structure

The critical element of differing structures and power bases may manifest itself during the contract negotiations. When one looks at the composition of the negotiating teams from both sides, a fundamental issue


arises. Why do some contracts fail to be ratified, even as labor and management work together to reach a mutual agreement?

The explanation may revolve around the cast of characters in these negotiations and their power or authority to “sign” the contract. For all intents and purposes, those involved appear to be the appropriate individuals. However, one element is missing.

From the management’s perspective, the chief negotiator in the private sector generally has the authority to commit the company to the agreements reached. Throughout the negotiations, when management’s spokesperson agrees to any provision of the contract, that mutually agreed-on issue typically becomes part of the new contract. The union’s chief representative serves the will of the members at negotiations. This spokesperson attempts to achieve those gains that the rank and file have charged their leader to obtain. Yet, when all is done, and the two chief spokespersons appear to have a mutually agreeable contract, it cannot be accepted and implemented as a legal document. The tentative contract must be submitted to the rank and file union members for their approval. Only if ratified does the contract become legal. However, if the rank and file oppose the contract or any of its terms, the negotiations are not over.

4. Union Membership and the Determination of Bargaining Needs

a. Socio-demographic profile from Membership Forms

1. Sex or gender status: in a union with more female members, it is necessary to focus on objectives that focus on the specific needs of women members like maternity benefits, and maybe child care. With more male members, especially if household heads, the union must focus on take-home pay sufficient for a decent standard of living.

2. Age: What is the proportion of members with more than ten years of service? Are there many members retiring within the duration of the CBA? If members are senior employees, they might value seniority provisions of differentials in wages, and preference for promotions. They would also need retirement benefits that are commensurate to their services in the company.

On the other hand, if you have young employees, they might value educational scholarships or support to continue formal education.

3. Educational Attainment: The provision of support for those within the school age could be appreciated by these members. Promotion or training opportunities for those who have shown interest in improving themselves.


4. Number of dependents: Most employees expectedly would be with families, and therefore, the sufficiency of the take home pay is of great importance to them, especially if these member-employees are the household heads. The number of other income earners in the family would however give us an idea of other contributing family members to the total family income.

The family income could be augmented by livelihood projects that could be bargained for in the CBA. Other benefits such as medical insurance, death benefits are relevant to the number of dependents.

5. Length of service: Members with long records of service in the company would appreciate differentials that recognize seniority, like premium for length of service, and priority for promotions, recall and generous separation pay based on length of service.

6. Status of employment: The unusually high numbers of probationary and temporary workers (be they members or not members of the union) is an indication to the union leadership of potential workers that could be regularized, and therefore could become union members. Their status of employment would need clarification in the Collective bargaining agreement.

7. Other Characteristics: The union representative must be aware of other characteristic so that their needs could be responded to in the collective bargaining agreement.


IV. The Employer, Its Philosophy, Goals and Bargaining Targets

1. Management Philosophies Towards UnionsWhat possible employer attitudes are there towards union? What

explains management attitudes toward labor?

a. ConflictThe union does more than “undermine employee loyalty to the

company” at such a time; it frequently goes well beyond the borders of the factual and bruises management egos in the process. Add managerial fears of decision-making encroachments and of union values that are antithetical to those of management, as well as the other grounds for management’s opposition to unionism on top of such an emotion charged atmosphere, and it should not be surprising that many companies in the period immediately following their unionization embraced a philosophy of “no acceptance” of the union. Only in the face of the law and union power could unions extract concessions from such management and then only quite begrudgingly and on as temporary basis possible.

b. As Armed Truce Attitude“Workable adversary relationship” and because they do seek a

situation, they have normalized it. The union representatives return the feelings of their management

counterparts, and the struggle for power goes on indefinitely. Wages, hours, and other rigidly construed employee-relations areas are dealt with as their issues arise, but the more crucial question of union security versus management rights, being insoluble in such an atmosphere, continually blocks more constructive dealings. “If you need mercy, forget about it,” a manager says with bitterness, “You’re not going to get it from my company.”

c. Power BargainingCan accept the union and tend to pride themselves on their sense of

“realism” which leaves them no choice but to acknowledge the union’s power. The union must prepare to bargain with management on the position of strength. Every centavo must be rationalized in dealing with the employer who believes in power bargaining.

d. AccommodationThe rules of both emotion and raw power are minimized, in favor of the

management’s adjusting to the union as it is. There is acceptance as to the presence of the union. The union is further seen as less of an enemy than a necessary evil. Such a belief encourages management to have a more positive approach to labor relations.


e. Cooperation and Full Productive Engagement There is a full acceptance of the union as an active partner, and that is

included in a formal plan of management. The union is seen as having a responsible role in the management of the company. There is danger if the union is seen as being co-opted.

The management supports not only the right but also the desirability of union participation, and the union reciprocates by actively endorsing the employer’s rights and need for an adequate return on its investment. There is a joint dealing of both personnel and production problems as they occur.

f. CollusionThere is too much harmony in this relationship that members are

suspicious of leaders not being able to work for the genuine interest of the membership. Employers have been known to bribe union officials to agree to bargaining table concessions. Worse are leaders who agree to substandard conditions contained in what is known as sweetheart contracts. Sometimes the union leaders in this situation are promoted to supervisory positions.

In this situation, one can observe interest free loans, ownership interests in the company, and the placement of company insurance contracts with insurance agencies owned by management with commissions for union officers.

2. Why Do Management Resist Unions?

a. Collective bargaining necessarily decreases the area of management discretion. It is the manager who tends to be held ultimately responsible for the success or failure of the business, and not the union. Hence, employers feel it essential that they reserve for themselves the authority to make all major decisions, including those the union might construe to be affecting “the welfare of the men.” In short, they feel that they must still be allowed to remain, on all accounts, “the boss.”

b. The manager may look upon the union as a troublemaker, bent upon building cleavages between management and workers where none would otherwise exist. Union leaders are seen as bringing trouble to an organization. The manager says that without the union, there would have been harmony between managers and employers. The union is also disliked because it emphasized the shortcomings of the managers.

c. Many managers view unions as underminer of employee loyalty to the company. The worker is divided between the union and management. Before the union came, the managers were the only source of orders and inspiration. With the union, the employee has support when he/she disobeys an unreasonable demand of management. Given that


workers have a choice now, management also fears the division brought about by union.

d. Reputation of the labor movement has preceded the arrival of unionism in the plant. Management was not forced to deal with a real union until now. Because managers only knew what little they knew of unions from the media, the relatively unsophisticated employers have been alarmed by the widely publicized reports of radical unions, irresponsible union strikes and corrupt union leaders. Given this, management have usually unfounded fears about unions.

e. The major values of the labor movement as perceived by management. Most of the values of unionism such as stress on seniority, work method controls and decreased workloads and emphasis on objectives of job or employment security, and workers democracy go against management objectives of efficiency, flexibility and greater control at the work place.

f. A “union-free” condition is a status symbol in the managerial community. In employer meetings, a union-free condition of organization brings a certain kind of respect and awe from other employers. It can be a source of disbelief and inspiration, of how management has successfully fended off the “threats” of unionism. The union-free status is considered a badge of good management.

3. What the Employer Wants in Negotiation

The objective of the employer in collective bargaining is not simply maximization of profits. More often than not it simply seeks to obtain the least expensive settlement in the short run. But bargaining from the employer’s side is usually more complicated than this.

a. Employer’s primary objectives in bargaining

1. Not to be put at a disadvantage when compared to their competitors. Management does not want to have higher labor costs than its competitors, as low labor costs enhances the enterprise’s profitability and assists its viability.

2. To keep shareholders or owners of the company happy. The shareholders become very sensitive when labor costs become a substantial part of overall costs. A high wage settlement in collective bargaining might cause the return in investments to fall. When shareholders have cause to be unhappy in collective bargaining, managers may bear the brunt, and in extreme cases may lose their jobs. Managers who bargain with labor and


who want to keep their jobs, simply have to cut costs. Owners of companies exert pressure on managers who bargain with labor.

3. To pursue its chosen labor policy. A company may want to pursue a chosen policy with regards to its human resource or labor. It may want to be seen as a good employer with satisfied employees apart from any measures to improve profits or efficiency. It might wish to follow this policy regardless of whether it is unionized or not. For example, a multinational firm would want to give the best packages, while a local firm would want to keep wages just above the minimum.

4. Aspects of Collective Bargaining Requiring Management’s Attention

In more specific terms, management will focus their attention on certain aspects of the company’s operations while preparing for collective bargaining negotiations. More often than not, top management will have to give the parameters to the negotiators to keep the following aspects under control. These are the following:

a. The cost impact: A collective bargaining settlement can be very expensive for a firm, and once the agreement is signed, it might be too late for top management to moderate a very big settlement.

b. Internal conflicts. During the negotiations, disputes may arise between the labor relations’ staff and the company’s production managers, a condition that might require settlement by top management.

c. The standards of the corporation. In times of disputes in the negotiations, the visions and values of the company may become involved so that top management may wish to influence the discussions.

d. Attitudes of personnel. To maintain its human organization, including the attitudes of management and employees, is also a responsibility of the organization. Management would not want to appear to be too hostile against its own employees.

5. Other Management Considerations in Collective Bargaining

Management would also be looking into the following aspects of the industry and the economy while preparing to negotiate with the union.

a. labor market conditions, and wage rates. Is the economy on the upswing? Are there a lot of unemployed? What are wage rates for the


industry? A robust economy would mean better demand for products, and a greater ability on the part of management to respond to wage increases.

b. inflation and CPI increases. Is inflation high? How are CPI indicators? Too high an inflation means loss of purchasing power of the peso, and a great probability of high demands for wage increases on the part of labor.

c. expected profits. How much the company can afford to grant in terms of wages and benefits would depend on its expected profits in the years covered by the CBA.

d. potential losses from a strike. Can the company sustain a long strike from its union? Sometimes the losses from a strike when the demand for a company’s product is so high that denying labor’s demands at the table is less costly than dealing with a strike.

e. influence of one settlement on other issues. Management keeps a total picture of the agreement that sometimes agreeing on one benefit means denying another.

f. union settlement in the industry and outside. Because employers have their own industry groups, they make an effort to monitor the bargaining results within and outside of their industry. Too high a settlement would incur the ire of their industry colleagues while keeping costs within reasonable levels might increase competitiveness.

6. Employer Characteristics that impinge on the CB process

There are characteristics of a company under scrutiny by its union. These characteristics might determine some of the behaviors that management representatives display across the bargaining table.

a. Nature and ownership of the company. Is it a multinational, Filipino, American or Chinese owned? Is it a corporation or family owned? Generally, multinational companies are more established with deep financial resources, and are therefore more able to withstand greater financial demands from the union. Sometimes, too, the citizenship of the owners of the company could explain their position towards unions and bargaining.

b. Industry where company is located. In an industry where there are a lot of competitors, the union expects management to guard its financial resources more tightly. Industry bargaining patterns, level of wages and benefits of competitors will influence the bargaining dynamics of management.


c. Technology. Is your company labor or capital intensive? Labor-intensive companies are more likely to have lower wages and benefits because of their great number of employees. Capital or technological intensive companies that employ lesser number of employees are perceived to have greater capacity to afford higher financial packages.

d. Products and services. What do you produce? The nature of the company’s products can also influence the level of bargaining outcomes. Is it a basic commodity? (better package because of a consistent demand); is it a luxury product? (if economy is good, great possibility of a good contract); is it for the mass market? (depends on the economic situation, positive if economy is good).

e. Competitors. Who are your competitors? Are you the leading company in the industry? What is your share of the market? If you are the leading company, the union will expect a better contract. But if the company belongs to the lower bracket of the industry, the union is expected to fight it out for every provision of the CBA.

f. HRD policies. The company’s beliefs about its employees are usually contained in its HRD manual. The Union utilizes that to full advantage, exploiting concepts like “our human resources are our most valuable assests.” . On the other hand, management may use positive beliefs and ideals to support its position.

g. Productivity and efficiency rates and profits. How did the company do in the last few years in terms of productivity, efficiency and profits? High rates in these indicators mean that labor contributed to the company’s positive position. The union will claim partial if not major credit for it, then translate that to bargaining goals.

h. Status of employment of employees. Are there a lot of contractual and temporary employees over a long period of time? If yes, the company can probably afford to regularize them. They must become union members through collective bargaining.

i. Others. Processes, technologies, programs adopted by the company. Were the union involved in a number of programs and did so cooperatively? If so it will use such positive experiences with management to minimize bargaining differences and to show the union’s willingness to be part of the development of the company.

Management’s Willingness to Take Strike*

* Noe, Hollenbeck, Gerhart, Wright. Human Resource Management, Gaining a Competitive Edge. 2000


1. Can the company remain profitable over the long run if it agrees to the union’s demands? Yes if labor costs can be passed on to consumers without losing

business. This is likely when the price increase is small because labor costs are a small fraction of total costs and there is little price competition in the industry.

Union’s may share part of management’s concern with long-term competitiveness because a decline in profitability may translate to loss of jobs. This won’t matter if the union will sacrifice members with low seniority.

2. Can the company continue to operate in the short run despite a strike?

If the union goes on strike, can the company take loss of revenues and profits in case of disruption? In case of high demand, this option for the employer is not attractive. If demand is low, this will not be of much concern.

Under what conditions can management able to withstand a strike?1. Product demand- when demand for product is strong, management

is less able to afford a strike because greater revenue and profits loss. 2. Product perishability—certain products produced by certain workers

in an industry will be permanently lost, thus increasing revenue losses. 3. Technology—a capital intensive organization is less dependent on

workers to run organization, thus can withstand a strike4. Availability of replacement workers—when jobs are scarce, there

are lots of replacement workers available. This makes the strike less attractive to the union

5. Multiple production sites and staggered contracts—other sites can take on production demand in case there is an ongoing strike in one plant

6. Integrated facilities—when plants are integrated, coupled with just-in-time systems make it difficult for management to produce when one sub-system is paralyzed

7. Lack of substitutes for the product—a strike is costly to a producer if other suppliers are available; this can result not just short-term losses but permanent shift in brand loyalty.

8.

Suggested Workshop Activity

1. What do you think are the major drivers of management in negotiating with the union? List them down.


_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. List down your characteristics as employer as discussed in section 6. How will it affect the projection of your bargaining position?

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________


Management Preparations for Negotiations

1. Three Basic Management Steps to Negotiation

a. Selection and composition of a management panel. Management selects the best-suited negotiating panel, including back-

up teams, from the best possible that can be found within the company, and legal advisers from outside the company that it can afford. Depending on the philosophy of management, the panel can be very cooperative or very hostile, rude or professional, respectful or overbearing.

The union usually studies the personalities of the management panel it will meet in the first session of the negotiation. Management panel members must do the same.

b. Preparation of data, supporting information, and other mechanisms.

Management cannot be faulted because it wants to control and direct the flow of negotiations but it is, most of the time, guilty of “extravagance of over preparations”. Management prepares everything that is related to labor and the negotiation including the possibility of a strike. The management team even goes on teambuilding sessions to lessen internal disputes, in addition to skills programs such as decision-making and bargaining techniques.

While most unions scramble to prepare at the last moment, management conscientiously prepares for negotiations.

c. The company prepares a Masterplan for the negotiations.Management plans in advance a blueprint for its negotiation with labor,

including the list of the issues and the sequence of dealing with those issues. Management is after consistency in following a planned course of negotiation. This is the main reason why unions have a difficult time proposing an alternative set of rules in tackling substantive issues in the ground rules.

2. Bargaining Items that Management Prepare

During management’s preparation for negotiation, it gathers actual documents to support its position. Its faithful documentation process gives strength to its effectiveness during actual negotiations. Below is a sampling of the items that it prepares:

a. A copy or summary of the minutes of the previous CB negotiation with the union.


b. The existing or expiring CBA broken up into its separate clauses; experience with each clause; pros and cons, advantages and disadvantages, changes to be proposed by management, and the anticipated union demands for changes are included.

It is a cross-reference file enabling the management negotiator to determine quickly what contract clauses would be affected by a proposed change in another area. It also contains the general history behind the development of these specific contract terms.

c. Internal data of the firm with respect to its labor costs, with corresponding subtotals for every peso or centavo demand of labor.

d. Data regarding the labor costs of other firms, both competitors and non-competitors in the same geographic location; rates paid within the industry; local labor market rates for occupations governed by the agreement; settlements gained by unions identified as pattern setters, and changes in cost of living figures since the last negotiation.

Other internal economic data such as cost of wages, benefits, other recreation programs, overall earning levels, and the amount of cost of overtime and premium are important.

e. Information about the union, its leadership, financial status and background, and any other special circumstances bearing on the union’s role in the negotiation.

f. A list of union’s expected demands and their impact on the company.

g. A list of resource people in the company who are knowledgeable on the impact of proposed CBA changes on the company’s operations and costs.

h. Anticipation of the possibility of a strike or the reduction of vulnerability to a strike. Additional security or police assistance may be required to enforce rules, and to observe entry and exit procedures. Supplies, customers and governmental agencies will require notification if a strike takes place. For important customers, alternative methods of supply, including supplying through competitors may be undertaken.


VI. The Contract and Specific Issues in Bargaining

General Classification of Issues in Collective Bargaining

The issues in collective bargaining could be classified into two general categories, economic and non-economic. Economic issues are those that directly involve peso equivalent or have costs, while non-economic issues refer to political or social provisions like job security or union security. The delineation is not strict as some non-economic issues can still cost money.

A. Non-Economic Issues

1. Scope of the CBA: who is covered and who is not; primarily through the process of exclusion or inclusion; a listing down of the scope of the bargaining unit or a listing of job positions included in the bargaining unit. This is compulsory.

2. Union Security Clauses: defines the status wanted by the Union in terms of treatment of existing members, new members and non-members, and the responsibility of the management with regards to these rights. This too is advised.

3. Job Security: usually lists down the recognized causes for dismissal, and conditions for continued employment; in addition, procedures for layoff. This is compulsory.

4. Seniority: defines seniority as it is controlling in what situations, e.g. layoffs, differentials, promotions, transfers, etc.

5. Company rights and management functions: a listing of usual and traditional management functions; also known as management prerogatives.

6. Union rights, bulletin board, check-off: a listing of the rights of unions to certain union functions such as attendance to grievances, the right to a bulletin board, and check off of members’ dues or fees.

7. Grievance procedure: a listing of the mechanism to process grievances, to include the steps, personalities involved and the period for adjustment in each step, ending with procedures on voluntary arbitration. This is compulsory.


8. Family planning, and labor education: a provision encouraging management to sponsor family planning and labor education programs for the company’s workers. This is encouraged.

9. Enrichment of jobs: encourages management to provide programs for the reduction of monotonous jobs. This is encouraged.

10. Separability clause: the provision which states that in cases some parts of the contract are illegal, only these parts are declared illegal; all the rest are to be implemented. Sometimes it is called “saving clause”.

11. Complete settlement clause: the provision stating that prior to the signing of the agreement, parties were given all opportunities to present claims and counterclaims, and with the CBA, everything is settled.

12. No strike-no lockout provision: encourages both parties to observe the provisions of the contract and to resolve all conflicts using accepted means without resorting to strike or lockout. This is compulsory.

13. Procedures for ratification: how members will ratify the contract.

14. Contract Bar rule: a prohibition on other parties to contract another CBA within the lifetime of the original CBA.

B. Economic Issues

1. Wages: provides for the basic rates for each job level, and corresponding increases per period. This is compulsory.

2. Wage supplement and fringe benefits: additional provisions on payment of premium on holidays, nightwork, restday, and overtime pay for ordinary days and other days. Other provisions related to wage supplements include also the following:

a. leaves (sick, vacation, maternity, paternity, bereavement, emergency, etc.)

b. bonuses: midyear, yearend, profit sharing, productivity, etc.c. premium pay for night work, holiday, restday, birthday, etc.d. uniform provisionse. meal allowances or subsidiesf. transportation allowance or subsidiesg. retirement/pension plan. Most of these provisions are common in

CBAs.

3. Separation pay: in just causes of separation, how much can the employee receive, this is compulsory; gratuity pay--in recognition of the employee’s long service.


4. Medical or hospitalization benefits: usually a provision for the coverage of the plan, and identification of medical organization responsible for the plan; also, the responsibilities of management.

5. Signing bonus: usually as an incentive to union members to sign or approve the contract; a “sweetener”.

6. Other benefits like housing, loan assistance, educational assistance, etc.

The Collective Bargaining Agreement and Its Specific Provisions

The following section is a discussion of the range of possible provisions that comprise a collective bargaining agreement. The objective here is to determine the most relevant, and those that respond to the needs of the company in its relationship with its employees, the Union and its members; the bargaining power displayed by the union, and the possibility of the Union acceding to the counter offers of management union.

A. Preamble and purpose clauses: this contains the philosophy of management and labor in the conduct of industrial relations and the aims of the collective bargaining agreement. The Whereases…

B. Union Status: under this section are provisions on security of the union, and collection of union dues. 1. union shop: new employees automatically become union

members after a specified period. 2. preferential shop, open shop: the employee can choose to

become a member or non-member.3. agency shop, or payment of agency fee: those who are not

members of the union but derive benefits from the CBA pays the agency fee.

4. maintenance of membership shop: members at the time of the signing of the CBA must retain membership as a condition of continued employment

5. union recognition as sole bargaining agent6. union membership requirements7. hiring through the union: closed shop: an individual can only

apply for employment if she is a member of the union.8. joint hiring hall9. voluntary check-off: payment of monthly dues10. other provisions for collective union dues11. union activity during the working hours12. use of bulletin boards


13. work on non-union materials14. union label and shop card15. wearing of union insignia

C. Union rights, activities, and responsibilities: other provisions on union activities and use of bulletin boards1. union activities on company time and premises2. visits by union activities3. access to company records4. bulletin boards

- number and location of bulletin boards- approval of notices- content of notices- other clauses

5. union label and shop card6. pledges against discrimination and coercion7. inclusion of union constitution and by-laws

D. Managerial rights: covers the extent of management rights1. general management prerogatives

- enumeration of management rights- management rights subject to agreement provisions- management rights subject to grievance procedure or negotiation- management rights not to be used for discrimination or to affect

employees adversely2. plant rules

- establishment and revision of rules- informing employees of rules- enforcement of rules

3. changes in plant site or location of employment- restriction on removal of plant- removal of plant site allowed

4. contracting and subcontracting- conditions under which contracting is permitted

- full use of space, equipment of workers- contractor’s relations with union- maintenance of agreement and wage standards- registration of contractors- regulations concerning subcontracting- other clauses

5. general wage provisions- general wage clauses- period and form of wage payment


- wage differentials according to type of business- sex differentials- disabled and older employees- hazardous or unpleasant work- automatic pay increases based on length of service- pay during temporary transfer- call-in and call-back pay: premium for being called back to work after regular working hours.- waiting time and down time- portal to portal pay- reporting to pay- travel pay and out-of-town work- deductions for poor work- uniforms and equipment- non-monetary additions to wages- production work prohibited by foremen- wage reductions prohibited- reopening on wages- retroactive back pay- pay for negotiations on company time- additional pay for union stewards and officers

E. Wage-adjustment plans: specifies adjustments that could be made in the lifetime of the agreement1. permissive wage-adjustment plans2. legislated wage adjustment plans3. profit sharing4. improvement factors5. performance-based adjustments

F. Incentive-wage plans: specifies formula for incentives1. provisions establishing or changing incentive systems2. union participation in setting piece rates3. rate adjustments through grievance procedure4. revision of rates5. guaranteed earnings6. equal opportunity under incentive plan7. safeguards on group incentives

G. Time studies and standards of production: provisions covering work standards1. time study safeguards2. protection standards and work loads3. size of crew


H. Guaranteed employment or annual wage plans1. guaranteed employment2. guaranteed annual wage3. supplemental unemployment benefit plan

I. Pension plans: specifies membership status and operation of plan1. contractual obligations2. eligibility rules for membership in plan

- computation of creditable service3. qualifications for benefits

- retirement- permanent disability- death benefits

4. retirement age5. employees’ benefit rights on separation from service6. amount of pension

- uniform amounts- graduated benefits- deductions- conditions governing payment, continuation, suspension of pension

payments7. financing the plan

- non-contributory plan- contributory plan

8. administration- disposition of funds on termination of plan- effective date of plan

J. Severance Pay or Dismissal Compensation: gives formula for separation pay1. choice of dismissal wage or furlough2. unemployment compensation deducted from dismissal pay3. fund specified4. re-employment after receiving dismissal pay5. dismissal pay clause with retirement features

K. Vacations: clarifies availment of leaves and coverage1. eligibility requirements2. conditional vacation rights3. amount of vacation pay4. vacation substitutes5. vacation rights in case of discharge or layoff6. loss of vacation rights7. timing of vacation period


8. sabbatical leave plans

L. Hours of work: specifies period and length of time for certain activities1. regular hours2. shift hours3. flexible schedules4. starting and finishing time5. meal periods6. rest periods7. clean-up time8. clothes changing time9. meetings called by employer10. making up of lost time

M. Overtime: clarifies payment, and other overtime-related policies1. overtime rates2. restriction on overtime3. equal distribution of overtime4. cancellation of overtime5. minimum overtime6. meals

N. Shift Operations: covers policies and regulations on shifts1. restriction on multiple shifts2. shift differentials3. choice of shifts4. temporary exchange of shifts5. split shifts6. rotation of shifts7. shift partner

O. Sunday and Holiday Work: specifies payment for extra day work1. premium rates for Sunday and holiday work2. continuous-process and maintenance work3. eligibility for holiday pay4. holidays with pay5. holidays without pay6. making up holidays

P. Leave of absence with pay: guides availment of other leaves1. leave for any “reasonable” excuse2. leave for union business3. leave for civic duty4. leave for school attendance5. sick leave6. maternity leave


7. family sickness and death8. religious holidays

Q. Leave of absence without pay: provides for appropriate situations of leaves without corresponding pay1. supplemental pay while on union business2. paid death-in-the-family leave3. paid sick leave

R. Seniority: what are bases for seniority, and seniority-controlled situations1. company or plant-wide seniority2. departmental or occupational seniority3. probationary period4. period of non-employment5. seniority in plant merges6. seniority status of foreman7. seniority lists8. superseniority for union officers and key employees

S. Layoff and re-employment: clarifies conditions for retrenchment and recall1. union consultation2. work-sharing3. combined work-sharing and layoff plans4. layoff according to seniority5. “bumping”6. layoff of apprentices7. seniority in re-employment8. loss of re-employment rights

T. Discharges, discipline and quits: specifies conditions for discharge and related situations1. causes for discharge2. probational and temporary employees3. advance notice of discharge4. appeal of discharge5. back pay on reinstatement6. sole right of employer to discharge7. suspension8. quits

U. Grievance procedure: steps, actors and prescriptive periods in the procedure1. shop committees


2. joint committees3. negotiating procedure4. written notice of grievance5. time limits for handling grievances6. pay status of shop stewards or union representatives7. protections to shop stewards or union representatives

V. Arbitration: procedures for arbitration1. arbitration for particular disputes2. permanent arbitration3. cost of arbitration4. protection against delays and deadlocks5. arbitration proceedings6. investigations by arbitrator7. restrictions on arbitrator8. retroactive awards

W. Strikes and lockouts: clarifies conditions for strikes and lockouts1. prohibition of strikes and lockouts2. penalties and stoppages3. effect of work-stoppage on status of agreement4. strikes allowed to enforce agreement or arbitration award5. no stoppages until failure of grievance procedure6. strike after membership vote7. picket lines8. sympathetic strikes9. jurisdictional strikes10. protection of property

X. Plant productivity and labor-management cooperation1. management responsibility for efficiency2. Union and employee responsibility and pledges of cooperation3. Joint labor-management responsibility and cooperation

- joint production committees- joint suggestion committees- joint safety committees- joint employment stabilization committees- multi-purpose joint committee- general purpose joint committee

Y. Labor-Saving and Adoption of New Technology- conditions and process for adoption of new technology1. right of management to introduce technological changes2. prohibition or restriction of technological change3. union participation in technological changes


- rates and work loads on jobs affected by technological changes4. minimizing effects of technological changes

- no dismissal of employees affected- maintenance of previous earnings- priority in transfer to new machines- preference in vacancies to displaced employees- retrenchment pay- other safeguards

Z. Apprentice and learners1. apprentices

- restrictions on number of apprentices- prohibition against hiring of apprentices- qualifications for entering apprenticeship- union membership- qualifications of employers- length of apprenticeship period- discharge of apprentices- quits and resignations- layoffs- re-employment- guaranteed employment- joint apprenticeship committeestraining on the job- other types of instruction- rate of pay- hours and overtime- admission to journeyman status- seniority status

2. learners- requirements for hiring learners- rates of pay

AA. Health, safety and insurance: benefits and process related to safety and health1. routine physical examinations2. paid physical examinations3. dental care4. paid sick leave5. group life insurance6. accidental death and dismemberment insurance7. death benefits8. sickness and accident insurance9. group hospitalization insurance10. group surgical insurance


11. individual hospitalization insurance12. individual surgical insurance13. catastrophic hospitalization and surgical insurance14. major medical insurance15. first aid facilities16. sanitary facilities17. eating facilities and cafeteria18. safety organization19. safety and fire protection equipment20. safety awards

AB. Miscellaneous benefits: provisions on other benefits1. provision of parking for employees2. charity and other collections3. Christmas bonus4. Christmas party, or summer outing5. credit union or cooperative seed funding6. year-end bonus7. educational assistance

AC. Miscellaneous provisions: provisions for special sectors1. employment of temporary workers2. aged, handicapped or disabled workers3. employment of women4. working rules5. outside activity or moonlighting restrictions6. patent rights and inventions7. personnel records8. identification badges9. copies and reproduction of the agreement

AD. Extension of the Scope of the Agreement: the coverage of the agreement in cases of expansion and other conditions1. employer associations2. change of employer’s identity or merger3. extension of agreement to additional plants4. extension of agreement to competing firms5. contracting and subcontracting

AE. Duration and renewal1. temporary extension of expired agreements2. arbitration of agreement of terms3. modifications during life of agreement4. reopening on wages and other provisions*

* Reference: Wilson Randle, Collective Bargaining Principles and Practices, 1966.


Management must study implications of each provision on any and all aspects company operations


VII. Strategies and Tactics in Negotiation

1. Prior Considerations in Negotiation

a. There is no substitute for adequate preparations. Negotiators should not underestimate the preparation needed for negotiations. Below are reasons why advance groundwork is necessary.

1. It creates confidence. Because you have prepared adequately, you are confident about your ability to present your position.

2. It speeds up negotiation. The quality of information that you are able to present to your counterpart facilitates the negotiation.

3. Constructive thinking is done better during preparations than under the stress of negotiation. The stress of negotiation clouds judgment, but because you have adequate preparation, you should not be alarmed. Preparing ahead of the actual negotiation, you are able to anticipate the positions of the other party.

4. There’s access to many sources of information. Do not wait until the actual negotiation to procure needed information. Collecting information ahead of time gives you the advantage of long study and deeper understanding.

b. Allow for a long period of preparation. There must be complete development of necessary data. Allot a long time to understand the complex set of information necessary to negotiate with the Union. Understanding the operations of the company, your counterpart panel, your financial statements, and your strategic relationship with the Union might take a while to understand.

c. For some aspects, preparation is a continuing day-to-day affair. Company policies and practices must be scrutinized, observed and problems documented as they occur. Upon signing of the agreement, preparations for the next round of negotiation begin. Problem documentation is needed to innovate on existing programs and rules.

d. Understand the Union’s power structure, power sources, and personalities. A study of the profile of the Union negotiators will assist the management panel towards working with or negotiating with the real decision-makers in the Union. Management negotiators can also devise behavioral strategies towards these actors.

e. Management’s bargaining position must start from resolved internal conflicts. It is a widely accepted strategy that negotiators themselves work to come up with a master plan wherein their decisions are arrived at in a consensus. It is problematic on the part of any party when its panel members cannot agree by themselves when facing the other party. It


is a good idea for panel members to go into teambuilding exercises, negotiation strategies including assertiveness training programs.

2. Development of Proposals and Counter Proposals

Any party may prepare for the probability of exchange of proposals in writing even before the actual negotiation begins. This is possible where a mature relationship exists between the union and management.

For a review, the following are essential sources of information that were tackled earlier.

Sources of Information

a. Analysis of industrial relations policy.- compile all forms of policies- note down problematic areas; relate to CBA improvements

b. Analysis of contract. The contract can always be improved or its strong points retained.

- a number of clauses will appear acceptable as written. No changes.- other clauses will be acceptable with changes. Actual changes may

be written down.- some clauses may be found hazy. A new clause is written and

constitutes a proposal.- some clauses will be clearly unacceptable because of changing

conditions. A persuasive counter proposal should be prepared.

c. Suggestions from Other Management Officers. Try to keep in touch with other management officers as to their own recommendations on how the CBA could be improved. These should be noted down and compared with the notes on the review of the CBA.

d. Analysis of Grievance. The grievances give us a view of the rules of the company that could be relaxed, modified or altogether removed because employees for one reason or another cannot cope. Modification or relaxation of penalties is an normal object of negotiation by the Union.

e. Contract violations. Contract violations arising from misunderstanding of the language of the contract is another source of information. The panel can suggest a joint committee to review provisions which were sources of misunderstanding and to revise these.


f. Union membership survey. A processed set of survey results gives the most accurate view of the needs of the membership. This is however done by the union.

g. General information sources. Information about the economy, the industry, new technologies, etc., can give the panel a wide picture of the environment of collective bargaining.

3. The Prenegotiation Session

Preparatory bargaining activities may begin before actual negotiations. Contacts with management panel may begin in earnest a few months before the actual negotiations. Management panel members do this to study the behavior and personality of union panel members.

Panel meets to strengthen unity. The panel, no matter if they have been together for some time must meet regularly to strengthen their positions. The panel should role-play their own areas of expertise as a prelude to actual negotiations.

b. Prenegotiations with Union are usually possible in mature, and stable bargaining relationships where they are confident to reveal major initial demands. This is advantageous to both because they are able to analyze initial counter proposals, and prepare supporting factual data for actual negotiations.

4. Constitution of the Bargaining Panel

The Ideal Member of the Negotiating Team1. Command of language- knows how to communicate effectively2. Knowledge of operations- understands the operations of the

company3. Power of decision- authorized to decide for the company4. Dependability- stands by his decision5. Prestige- occupies a high position in the company hierarchy6. Integrity- is known to be honest and respectable7. Personality- able to present a good image of the company and

panel

Bargaining Techniques at the Negotiation Table


There is no standard or fixed pattern or set of behavior under normal bargaining techniques. Various approaches are to be utilized depending upon the problem involved, the bargaining relationship, and the personalities of L and M negotiators.

But here are some tips:1. Serenity, toughness, and acquiescence: Differences in technique

require the utmost flexibility on the part of the negotiators.2. There is no proof that being tough, unreasonable, and inflexible

produce greater concessions from the other party.3. At the conclusion of every session, one party must take charge of

reviewing activities that have taken place. 4. Ordinarily, issues are taken up one at a time, and agreement reached

on each item-- considering each issue, discourages “horse trading”, and may preserve an atmosphere of agreement.

5. Tackle easy items, then hard items--there’s perception of progress, and encouragement.

6. Or sandwich hard with easy items, to build an atmosphere of cooperation.

7. Parties may follow the “lump” or “basket” approach on all issues. Only when the total monetary package has been analyzed can the parties counter each other on the non-monetary issues.

8. There is more logic to the practice of making any agreement on a particular issue tentative and dependent upon the completion and signing of the entire contract. This encourages a “total picture” approach.

9. Consider administrative conduct of the negotiation. The chair should be able to call on experts in his panel team.

10.Do not argue within the team.11.Know when to call for a caucus. 12.During intervals in negotiations, the team may break up into small

groups to study several issues at once. Report to whole team the results of the discussion. Decisions could be by consensus or majority, but show unity before the other panel.

13.Analyze and explore areas of disagreement. Show understanding and commitment to areas of agreement.

14.Do not turn down a proposal with an immediate flat and decisive “no”. Counter proposals should be made as encouraged by law and by constructive bargaining practice.

15.Counter proposals are not true bargaining if the initiative rests entirely with one side, nor is it good technique to employ only defensive or negative negotiation.


16.The value of “recess” bargaining should not be overlooked. A recess should be called to consider the situation, consolidate arguments, and initiate counterproposals.

17.Greater detail in the contract results in fewer misunderstanding.18.Consider the final language of the contract. Non-legal form involves

both parties to write the contract. Legal form necessitates lawyers. 19.The importance of intent should be emphasized since it clarifies the

interpretation of the contract. 20.Allow other non-interested parties to read the provisions of the

contract.21.A little time and effort spent in eliminating obscure and equivocal

language can prevent many disputes.

6. Other suggestions for negotiation behavior:1. Learn the value of a change in subject. When no agreement is in sight,

table the issue, and move on to less controversial matters.2. Be a good listener. Let each speaker finish talking. There will be time

enough to offer a counter proposal or issue a denial after the facts have been obtained.

3. Do not hurry negotiation, the other party may become irritated, and the atmosphere may deteriorate. If negotiations slow down, call for a recess.

4. Learn to identify the techniques giving the best results. Discard those that which irritate the other party with no productive results. Use the techniques that minimize the existing differences.

5. Question the evidence offered. Through questions, the group may obtain insight into the other group’s point of view and perhaps get an indication of the arguments that they may use. Questions may also expose weaknesses in the other party’s position.

6. Use data and facts only after they have been thoroughly verified. Be honest and know the information, for erroneous or false statements can seriously affect negotiations.

7. Hold statistical materials in reserve and carefully prepare an opening for their use. Graphical data are more convincing than raw figures.

8. If there are “pie in the sky” or unrealistic demands, sidetrack them carefully without ridicule, for the other party may be looking for an opportunity to become angry.

9. Be factual rather than emotional. Think through the arguments, issues and problems.

10. Occasionally bring up matters of common interest and agreement.


11. Beware of arguments of “principle”. Negotiators feel more emotional about principles than they do about specifics.

12. Proper language assists bargaining. Bargainers should avoid inflammatory remarks questioning the sincerity or good faith of the other party. Do not refer to personalities or use red-flag words such as arbitrariness, abuse, anti-union, etc. since they may excite emotions.

13. Avoid taking a stand publicly through releases or advertisements in advance of or during negotiations. A publicized position makes concessions difficult and may stall the negotiations.

14. Do not take unfair advantage of the other party. Constructive collective bargaining takes place in an atmosphere of confidence; trust, not in one of suspicion and doubt.

15. Do not threaten to lockout at the bargaining table. The implied threat is already present and gratuitous threats destroy the confidence of one party in the other during negotiations.

7. Generic Union Tactics Shown During Negotiation1. Union regularly show its strength through membership’s vote of

confidence to convince management of union all-out support.2. It can resort to threat of sanctions during negotiations but not at the

table. The officers get ready for a vote of confidence with an early strike vote that would enable the officers to determine the best time at which to strike.

3. Slow down on the job; following rules rigidly. 4. Threat of aiding competitors during the strike. 5. Deterioration of interpersonal relations and communications within the

enterprise.*

Please feel free to provide feedback re this material. Get in touch with Prof. JAF Palafox thru

<[email protected]>

* Reference: Davey Harold, Contemporary Collective Bargaining, 1982.


The Game of NegotiationProblem Solution

Positional Bargaining: Which Game Should you Play?

Change the Game—Negotiate on the

MeritsSoft Hard Principled

Participants are friends

Participants are adversaries

Participants are problem solvers

The goal is agreement

The goal is victory The goal is wise outcome reached efficiently and amicably

Make concessions to cultivate the relationship

Demand concessions as a condition of the relationship

Separate the people from the problem

Be soft on the people and the problem

Be hard on the problem and the people

Be soft on the people, hard on the problem

Trust others Distrust others Proceed independent of trust

Change your position easily

Dig in your position Focus on interests, not positions

Make offers Make threats Explore interestsDisclose your

bottom lineMislead as to your

bottom lineAvoid having a bottom

lineAccept one-sided

losses to reach agreement

Demand one-sided gains as the price of agreement

Invent options for mutual gain

Search for the single answer; the one they will accept

Search for the single answer; the one you will accept

Develop multiple options to choose from; decide later

Insist on agreement Insist on your position

Insist on using objective criteria

Try to avoid a contest of will

Try to win a contest of will

Try to reach a result based on standards independent of will

Yield to pressure Apply pressure Reason and be open to reason; yield to


principle, not pressure

Source: Edward Herman, 1998. Collective Bargaining and Labor Relations, Simon and Schuster.


Union-Management Cooperative Approaches to Use Depending on Problem or Objective

Organizational ProblemsProblem Area Possible Approaches

Market Labor-management promotion institutesLM marketing teamsJoint advertising programsCustomer supplier partnershipsCustomer service programsJoint seminars for customersNew product developmentUnion label campaign

Financial GainsharingProfit sharingEmployee stock ownership programsAlternative compensation systemsHealthcare cost containment

Investment Joint investment fundsPension fund investmentsESOPs

Adapting to change Strategic collective bargainingLabor-management committeesSociotechnical designWork redesignJoint visioningStrategic scanningSearch conferencesJoint benchmarking

Community contribution/ image

Joint promotion campaignsCustomer service programsJoint volunteer effortsAdopt a school/educational partneringLabor-management relationsStrategic collective bargainingIntegrative collective bargainingUnion-management conflict resolutionGeneral labor management committeesSupervisor-steward leadership developmentJoint relationship building processRelations by objectivesProblem solving grievance handlingGrievance mediation


Operational ProblemsProblem Area Possible ApproachesFacilities New plant design task forces

Joint facility redesign committeesSociotechnical redesignWork redesignErgonomics

Technology New technology joint committeesUnion management task forcesSociotechnical designCellular manufacturingSelf-directed work groupsJoint meetings with vendorsNew product development Total productivity maintenance

Productivity Individual and group incentivesProductivity gain sharing programsNew technology committeesFlextime/alternative shift arrangementsQuality circlesTotal quality managementTotal productivity maintenanceWork redesign

Quality TQM/organizationUnion management task forcesQuality circlesSociotechnical redesignNew technology committeesQuality improvement projectsStatistical quality controlQuality function deployment

Resources use Joint conservation/environment committeesUnion management task forcesWork redesignNew technology committeesL/M/community environmental committeesProcess and environmental auditsJoint recycling efforts

Employee ProblemsProblem Area Possible ApproachesEmployment Security Strategic collective bargaining

Contracting in task forcesJoint marketing efforts

CB Negotiation Materials


New product developmentJoint training and employee developmentBoard level representationJoint investment activitiesJoint job placementJob banks

Working conditions Strategic collective bargainingIntegrative collective bargainingProblem solving grievance handlingGeneral labor-management committeesHealth and safety committeesQuality circlesQWL programsWork redesignFlextime/alternative shift arrangementsSociotechnical redesignErgonomics of facilities and technologyProcess and safety auditsWork redesign

Career development Joint orientation sessionsApprenticeship committeesTraining committeesSelf-directed work groupsPay for knowledge/performancePreretirement trainingJoint layoff preparationPlant closing assistanceEmployee educational counselingTuition assistance

Communications Board level representationLabor management committeesUnion management task forcesJoint newslettersJoint employee meetings

Personal and family concerns

Employee assistance programsProblem solving grievance handlingOn site day/elder careWellness programsDrug and alcohol counselingJoint family support effortsAttendance programsLiteracy programs

© JAF Palafox, UP School of Labor & IR 73

CB Negotiation Materials

Source: Edward Cohen-Rosenthal, Mutual Gains: A guide to union-management cooperation, 1993. Ithaca, New York.

© JAF Palafox, UP School of Labor & IR 74

enhancing cb negotiation competencies for nestle management

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