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Improving Working Conditions through Collective Bargaining

03 Dec 2012

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NLC President, Abdulwaheed Omar



Linda Eroke

The need to strengthen collective bargaining machinery and ensure its acceptance in all sectors of the economy has been brought to the fore, as industrial relations experts have said that the absence of strong national and sectoral agreements has put downward pressure on wages and working conditions.

Collective bargaining is the process of negotiation on a whole range of issues bordering on the regulation of the terms and conditions of employment between workers and employers or government, aimed at collective agreement. In other words it is seen as the most rational process of determining and reviewing the terms and conditions of employment.

According to industrial relations experts, collective bargaining goes beyond the process of negotiation between unions and employers on issues directly affecting conditions of employment, as it is also a means of limiting unilateral decisions and actions by employers and governments.

Therefore, the role of unions is very crucial in collective bargaining arrangements as well focused and democratically run unions expand the scope of collective bargaining; thereby strengthening industrial democracy.

Industrial relations experts are of the opinion that there exists a relationship between collective bargaining and productivity. Specifically, they believe that there is considerable evidence that collective bargaining agreements actually reduce wage inequality which contributes to productivity and competitiveness.

For instance, the International Labour Organisation (ILO) warned that weakening or de-centralising collective bargaining arrangements could lead to more wage inequalities and social stability.
With the global economic crisis, some countries have decentralised collective bargaining arrangements and this action is taking its toll on wages.

According to the ILO, decentralising the process and letting companies negotiate in the absence of strong national and sectoral agreements, puts downward pressure on wages and working conditions.

ILO’s senior industrial and employment relations specialist, Susan Hayter, said the sharp rise in wage inequality in the United States and the United Kingdom in recent years can be directly linked to the decline in union membership and the associated decline in coverage by collective bargaining agreements.

“But when there is significant policy support for collective bargaining mechanisms, such as in Denmark, Finland, France, the Netherlands and Sweden, the gap between the highest and lowest wage earners is significantly lower. The position of the ILO is clear: it is up to the parties themselves to decide at what level they wish to negotiate.

“During the crisis, many employers, governments and trade unions recognised that collective bargaining was an effective tool to adjust to economic conditions and stay in business,” she said.
She pointed out that national and sectoral agreements provided a framework within which firms could tailor their response, thus reducing costs while at the same time preventing layoffs and protecting earnings.

“Examples are to be found in countries in Europe such as Austria, Germany and Belgium and elsewhere in countries such as South Africa, Brazil and Argentina”, she said.
Apart from dragging businesses down and reducing productivity, she said there is considerable evidence that collective bargaining agreements actually reduce wage inequality and can contribute to productivity and competitiveness.

According to her, when changes in work organisation are negotiated with workers and their representatives, improved company performance is often the result.
While wages and working time remain the primary issues for collective bargaining, the process is increasingly being used to address the specific concerns related to the global economic crisis. Pay is being linked to productivity, and flexible working time arrangements are being negotiated to balance work and family life.

And to respond to technological change and rising job insecurity, collective bargaining agendas now also include training and lifelong learning. That has worked particularly well in Europe, where countries with strong social partners and strong institutional support for collective bargaining have had the most success in setting up frameworks for continuing vocational training, benefiting both enterprises and workers in times of continuing economic uncertainty.

However, in Nigeria, many employers of labour are yet to take into account the need to protect industry and their organisations through collective bargaining agreements. This is because a large number of Nigerians in the wage sector are still not unionised. This may be due to the some factors which include hostility on the part of employers (as in the cases of the new generation financial institutions, telecom industry domestic airlines and most indigenous entrepreneurs engaged in various services).

It is sad to note that a large number of unionised workers particularly in the public sector are not covered by formal and well structured bargaining machinery which often lead to ad-hoc negotiations, occasioned by industrial crisis. Moreso, most government parastatals, with few exceptions, have no collective bargaining machinery.

Though the Federal Government has ratified ILO Convention 98, which guarantees the right to organise and to bargain collectively, however, government is yet to ratify Convention 151 on labour relations, which makes it obligatory to institute collective bargaining machinery in the public sector. Over the years however, conciliation and mediation, which are functions of labour administration, have greatly declined due to neglect by the ministry of labour.

Thus, the processes for access to both the Industrial Arbitration Panel (IAP) and National Industrial Court (NIC) to settle industrial dispute in the country are largely through the Minister of Labour. In addition, awards are not made directly to the parties but through the Minister, who has the right to refer the parties back to the Panel.

Nigeria Labour Congress (NLC) strongly hold the view that the problems of collective bargaining in Nigeria, in terms of its restricted nature, and the relative large number of workers outside its coverage, emanated from developments in the national polity.

President of the NLC, Mr. Abdulwaheed Omar, maintained that the development and practice of collective bargaining are hinged on trade union consciousness, the attitude of the public towards the trade unions and the level of respect for human rights and industrial democracy by the Nigerian government.

He listed the factors that weaken collective bargaining to include fear of official victimisation/intimidation by government and employers, divide and rule strategy of employers, lack of awareness of negotiation objectives by workers because of ineffective communication between bargainers and members and requirement for ministerial approvals of agreements reached.

Given the importance of collective bargaining in organisations, there is need to build and strengthen for unions and to broaden participation of workers and trade unions in policy formulation and implementation in order to prevent the negative impact on globalisation.

This is so because collective bargaining is the most effective process for winning improvements in the working conditions of workers in the workplace and given the need to achieve social, political and economic transformation through increased productivity, job security, motivation and involvement in union activities.

Tags: Business, Nigeria, Featured

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