Collective bargaining is an important way of:
- providing for real discussion and negotiation over terms and conditions of employment, and
- helping with building productive relationships between employers, employees and unions.
Negotiations form a part of the bargaining process and include formal and informal discussion designed to reach agreement. Negotiating that supports productive workplaces usually involves discussion between the parties about topics such as wages, conditions and the quality of the workplace. Some important parts of negotiating are:
- sharing relevant information for effective solutions
- focusing on issues and their underlying interests, not personalities
- focusing on the present and future, not the past
- recognising and understanding the other party’s interests as well as your own
- developing options
- evaluating the options against objective criteria.
There are many negotiating styles and more than one approach can be used in any negotiation. Models may combine styles. Each style has advantages and there are many variations in practice.
Different styles of bargaining include:
|The parties see themselves as adversaries||The parties see themselves as joint problem solvers||Parties recognise both points of difference and commonality|
|Bargaining is based on positions||Bargaining is based on interests||Claims will present positions while some important areas will be addressed as a common interest|
|Facts are used to maintain positions||Parties make a joint effort to determine facts||Fact support positions and are also explored together|
|Polarisation of parties and issues||Joint search for underlying interests||Parties seek common interests and understand and respect each other’s views|
|Parties have limited face-to-face contact||Face-to-face discussions||Relationships are prioritised while parties keep their point of difference|
|Winning arguments are sought||Workable options are sought||All options are explored, it is recognised that successful arguments have to be workable|
|Produce all or nothing resolution of issues||Produce resolution by integrating interests||Some interests are integrated, other interests need compromise based on a ‘best alternative to a negotiated agreement’ (BATNA)|
|Options narrowed quickly||Field of options is broadened||Communication and options remain open for as long as practicable|
|Characterised by mistrust and emotion||Characterised by respect and reason||Negotiators earns respect through focus on the problem not the person|
|Parties often unhappy with the outcome||Outcome must be satisfactory to all parties||Parties resolve on the basis of what they can “live with” in the circumstances|
|Can create mistrust and bitterness||Promotes trust and positive relationships||Professional relationships are maintained and knowledge is improved|
The relationship between advocates really matters, and often what is said away from the bargaining table, or not said, is more important than the formal dialogue. Making sure that decision-makers are kept in the loop when problems come up is an important step.
Some common ways of sharing information are below and support the principles of:
- effective communication
- making sure the relationship is always a priority
- taking a problem solving approach.
A caucus is a private meeting of a bargaining team. Parties in collective bargaining are not usually face-to-face all the time. There are many uses for caucusing:
- evaluating progress
- considering offers
- sorting through outstanding issues and re-prioritising
- costing and re-packaging a proposal for settlement, such as re-distributing the benefits between a claim for a pay increase and leave
- updating the team about the current state of bargaining
- resting and recharging.
Caucusing with a team can be valuable when:
- they seem to be going over the same ground again
- they have something new to consider
- tensions are rising
- they are exhausted.
Agree how long the break will be and keep the others informed of progress.
It can be useful to reduce the size of the team to help progress in bargaining, for example, it could involve the two lead advocates and an extra representative from each team. The purpose of such a meeting is for parties to explore possible options for progress, captured by the question: “If we were to move on this could you move on that?”
Sometimes the democratic nature of the decision-making means it is difficult for teams to split up but if those difficulties can be overcome, a smaller team may be a useful way of moving stalled negotiations forward again.
A working party is a group of representatives that meet during, or outside of, the bargaining process with a specific purpose. A working party may be formed to:
- resolve complex issues likely to create a diversion during normal bargaining
- defuse confrontation at bargaining.
It can be useful to draft a terms of reference document that outlines:
- what the issue is
- who will form the working party
- when the working party will meet
- how the working party will communicate
- agreements on confidentiality
- timeframe for concluding the business and disbanding the group.
Each party needs to ensure the working party is convened because if the issues are not dealt with they are likely to cause difficulty at subsequent negotiations. Setting down the first dates at the negotiations shows everyone’s commitment to the working party.
Positional or traditional bargaining is a well understood process and there is less risk for the negotiators because there are tight controls over the development and presentation of a position. However, an interest-based approach can give better outcomes as long as enough preparation has been done to create an environment that supports parties working together on joint problems and showing a real commitment to following the process.
It can be useful to map a problem or issue from the perspective of both parties/stakeholders. What are their interests? Which interests and concerns do the parties have in common?
From debate to dialogue
You can move from raw debate to polite discussion to skilful discussion to dialogue.
Following a takeover, a new business inherited a range of different terms and conditions of employment from all the businesses it had originally comprised. A key objective of the bargaining for both parties was to integrate the agreements with a standard set of terms and conditions for all staff. As part of the negotiations the management and the union identified the following groups of issues:
- redundancy compensation
- retirement and resignation leave
- long service leave
- retirement fund.
Against these issues the parties agreed that their interests were as follows:
Preserve overall value of existing terms
While there was one common interest of setting standard terms, there was also a conflicting interest. The agreed solution was to:
- “grandparent” existing redundancy scales and retirement and resignation leave entitlements only to staff employed before the takeover date
- bring in a new redundancy scale for new employees
- bring in long service leave after 10 years’ service to all new staff
- provide access to the retirement fund for all new and existing staff.
The agreement brought in standard terms and conditions and was affordable. It didn’t undermine existing terms for staff and met the interests of both parties.
The things each party wants in a proposed collective agreement are referred to as a party’s “claims”, for example, a pay increase, increased annual holiday entitlement, requirement to work on public holidays.
Clear presentation of claims makes sure parties understand what has been put forward and reduces misunderstandings. It’s helpful to:
- put the claims in writing with the reasons and any data supporting a claim
- provide the reason and data for rejecting a claim
- prepare all your claims before starting the bargaining because changing the reasons without good reason or tabling new claims without warning, or late in the process, can undermine trust and confidence between the parties
- leave room for flexibility. Bargaining generally involves a process of give and take. If your initial claims are presented on a “take it or leave it” basis, you risk being accused of not genuinely considering what the other side has to say.
You can avoid problems in communications by having agreed formats for the presentation of claims and counterclaims. This supports good faith obligations to be active and constructive, responsive and communicative in collective bargaining. Acting in good faith also means considering claims with an open mind and, if a proposal is not accepted, giving a sufficiently full explanation so that everyone understands why there is a disagreement.
Wage movements in collective bargaining are usually expressed as percentages, and advocates must understand how to calculate, and communicate the results of these calculations, to the bargaining table. Communications around the calculations are improved if advocates share the same way of presenting calculations. Firstly, it is important to be clear about what the offer covers – if it is wage rates and allowances, or only wage rates. Secondly, it is important to present it in such a way that the proposal is well understood.
- separate the wages and allowances
- separate out the steps that are incorporated into any proposal.
Remember, shifting the date that a rise in rates will commence changes the costs and value of the offer and this kind of shift can often assist reaching agreement within acceptable parameters for both parties.
Example of compounded increases
Follow the example below of a proposal for a wage increase at Possum Patch District Council.
The employer offers 2 year term: 1 July 2016-30 June 2018
All wages and allowances increased in two steps of 4% (compounded):
Step 1: (the first increase ) is 4% from 1 July 2016 – 30 June 2017 (calculated by multiplying the amount by (4%) 1.04)
Step 2: (the second increase) is 4% from 1 July 2017 – 30 June 2018 (calculated by multiplying (4%) 1.04 x (4%) 1.04 = 1.0816)
|Presentation||Rates per annum||Multiply
12 months per annum
|Multiply by 1.0816||8%
12 months per annum
|Possum handling allowance||$100 p/a||1.04||$104 p/a||1.0816||$112.48 p/a|
You can access a more detailed explanation of the preparation and presentation of proposals and counter-proposals in collective bargaining by reading Relationships and Arithmetic by Walter Grills.
Parties in bargaining should engage in genuine dialogue and discussion about needs, limitations and challenges. Each party must:
- consider what has been claimed, with an open mind
- give an explanation if a proposal is not accepted so that everyone understands why there is disagreement. The extent to which a party explains its decision may be relevant to whether the issues involved have been genuinely considered, and whether the behaviour is judged to have been in good faith. For instance, if an employer thinks they can’t afford to accept a pay claim, they should be prepared to explain why and to listen to responses with an open mind.
Delaying a response only for tactical advantage or dismissing a proposal without any consideration may not be acting in good faith.
Negotiating often involves many stages, including presenting and responding to claims, requesting and disclosing information, and resolving difficult problems. The relationship between the parties’ representatives is important.
The duty of good faith underpins collective bargaining. Unions and employers must:
- be active and constructive in establishing and maintaining a productive employment relationship
- be responsive and communicative
- meet together and consider and respond to proposals
- not mislead or deceive each other.
Moving from debate to discussion involves:
- paying attention to your intentions
- balancing advocacy with inquiry
- building shared meaning
- using self awareness
- exploring barriers.
Some of the skills that support good faith bargaining include:
- active listening
- asking critical questions
- effective note-taking
- presenting clear proposals.
It is good practice to name and date all proposals around claims and offers to ensure everyone is clear about what has been offered.
- Ensure that all parties get copies of a drafted proposal.
- Keep the format the same throughout the bargaining to remove misunderstanding around:
- hand writing defects
- effects of percentage movements described differently
- distortions created by multi-directional passing-on of information.
Bargaining representatives are responsible for:
- promoting the interests of the parties they represent
- the bargaining process itself, including doing all they reasonably can to make sure the process is orderly, efficient and effective.
Part of making the bargaining process successful is reporting back in an accurate and comprehensive way to the parties represented. Overly simple or incomplete reports of the other party’s position can mislead and inflame the situation; so can quotes taken out of context.
Bargaining representatives can give their views to the parties they represent, but can’t mislead or deceive. Focusing on one part of the negotiation at the expense of others could be misleading. A report back can be done by the bargaining parties jointly or separately. Good-practice options include agreeing on the facts to be released, or a written record of the bargaining.
Solving problems that come up in negotiations is an important part of collective bargaining. First you need to identify the problem and then decide on a strategy to solve the problem. For many problems the following may help:
- talk about it and clarify it as soon as possible – it may just be a misunderstanding
- take a break to clear your head (have a walk, coffee break)
- take a break to gather information, seek a fresh mandate or caucus to discuss options
- allow a small group think through a range of solutions
- use some creative thinking ideas with your team.
Some problems may benefit from a joint problem solving approach.
A joint problem-solving model
The parties may have different interests, but the approach to how these are discussed and resolved is important to a good and lasting resolution. Using a joint problem-solving process is a good faith approach to problem solving for complex issues that come up before or during negotiations if both parties want to work cooperatively toward a new solution.
The joint problem solving approach involves:
- trying to understand each other’s interests in an open way and sharing information to find the right solution
- focusing on the issues and brainstorming options before jumping to conclusions
- demonstrating behaviour that is respectful and reasonable so that parties promote trust and positive relationships.
The main stages of a problem solving approach are:
- gathering information
- exploring the problem
- identifying the issues
- coming up with options
- evaluating the options
- identifying the solution
- reality check the solution.
You can use our training tools for problem solving for more information.
Tools and Resources
Collective Employment Agreement Template - DOCX 105KB
A framework for a collective agreement, plus a range of draft clauses.
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