THE PROCESS OF COLLECTIVE BARGAINING AND THE QUESTION OF ITS OBSOLESCENCE

THE PROCESS OF COLLECTIVE BARGAINING

AND THE QUESTION OF ITS OBSOLESCENCE

VERNON H. JENSEN

the process of autonomous bargaining. The parties to collective bargaining should be competent and willing to do the whole job themselves.

It must be acknowledged that in some quarters collective bargaining has suf- fered abuse or perversion, but limited failures of this type do not render collec- tive bargaining obsolete. One should not scrap an institution having vitality and great usefulness simply because there are some abuses. These need to be corrected. The fact, however, remains that there is no satisfactory substitute for collective bargaining if we want freedom of pri- vate decision making in the employment relation. It needs to be underscored that collective bargaining is private two-party decision making and that no other method of rule making and rule adminis- tration can achieve what collective bar- gaining does in a free democratic society.

Collective bargaining has always had opponents. For years it had to make its way in the face of political and economic antagonisms and legal obstacles. Never- theless, because bargaining is the essence of most transactions in our enterprise system, and because the pursuit of eco- nomic self-interest is a fundamental axiom of that system, collective bargain- ing was bound to develop and had to be accommodated.

Although collective bargaining still has its outright enemies, they are not our primary concern. It also has some un-

bargaining is not obsolete. Collective bargaining performs a

fundamental and valuable function which cannot be fulfilled as well in our society by any other means. Moreover, it performs that function more compatibly with our heritage of democracy than any other device designed to regulate em- ployment conditions.

THE CURRENT CRITICISM OE COLLECTIVE BARGAINING

It is my thesis that current comments about the inadequacies and failures of collective bargaining and criticisms that it distorts the economy are developed illogically and without factual founda- tion. By disseminating knowledge about the nature of the bargaining process and by underscoring the genuine approval given by much of industry to the fruits of its practice, the critics might be silenced and the meddlers checked. If the public adequately understands the process of collective bargaining, it will insist that collective bargaining be allowed to run its course generally, without interference from the government or from third par- ties, except on limited occasions when the parties themselves seek technical as- sistance. Even here there is danger that experts will make themselves indispens- able, thus undermining to some extent

Vernon H. Jensen is professor at the New York State School of Industrial and Labor Relations, Cornell University.—EDITOR

546

COLLECTIVE BARGAINING 547

witting enemies. Among them axe those employers who think collective bargain- ing is a nuisance and who seek to capture unions or devise ways of emasculating or circumventing them.

Other unwitting enemies are those economists who find collective bargain- ing disruptive. They see it as an obstruc- tion to the proper working of the econo- imy. They viev; it as a monopolistic device ‘which causes distortion of the “normal” :relationships in the economy. They find it to be a major cause of what they call “cost-push” inflation. These economists are not die-hard antagonists, for they frequently profess to support collective bargaining when properly structured. But they proceed from an unrealistic concept of competition, and their line of thinking, followed to its logical con- clusion, leads to the obliteration of col- lective bargaining.

Collective bargaining may be in dan- ger from friends as well as foes. Well- meaning persons sometimes expect too much and mistakenly make suggestions for supplementation which cannot pos- sibly produce constructive results because the process of bargaining cannot accom- modate their proposals.

Whenever there is a major sdrike, many people will say, “We ought to compel the parties to arbitrate.” They argue that the costs of prolonged work stoppages could be avoided if the parties are re- quired to submit their dispute to a tribunal for adjudication. These people igiiore the alternative costs of arbitration which, although not measurable in dol- lars, are great, inasmuch as the important freedom of private decision making would be eroded.

Various assertions have recently been made that collective bargaining may be inadequate to solve the problems of the

present day. Some of these assertions come from supporters of collective bar- gaining who see major challenges posed to the free world, such as the sudden upsurge of the productive and political power of three continents, the changed character of international tradej and the acceleration of technological change. W. Willard Wirtz has said.

In a world that has shi:unk c^vemight and a national economy in wliich each part now depends on every other part and on the health of the whole] the con- tinuation of private collective bargaining as the important force in the future it has been in the past depend^ on the decision of the bargainers to exercise, or not to exercise, responsibility^ for the concerns that affect the whole economy. . . . The future of collective bfirgaining depends on whether its motive power and its procedures can be adjifsted and revised to periaadt a larger recognition and reflection of the common) national interests…. ̂

Archibald Cox, claiming tphat new conditions make the public consequences of wage and price decisions mijich vnder than in the past, has said that the govern- ment must have “an opportunity to be heard as spokesman of tlie wider public interest” while the decisions are being made. He says that “the principle must be recognized sooner or later” and “it is on its way to general acceptaijice.”-‘ Ar- thur Goldberg has said, “It is [time that labor and management and government embark together for the new wc(rld of the economic future, and leave behind the old hostilities and inadequate ^deas and

^W. Willard Wirti, “The Future df Collective Bargaining.” Address delivered at the Interna- tional Trade Fair, Chicago, 111., AugiisC 3, 1961. Daily Labor Report, No. 149, AugAst 3, 1961, p. D-2 (italics added).

^Archibald Cox, “Wages, Prices, tJovernment and Lawyers.” Address before Alundni of Har- vard Law School and Graduate Scllools. Daily Labor Report, No. 115, June 13, 1962[ E-1 (italics added). i

548 INDUSTRIAL AND LABOR RELATIONS REVIEW

misconceptions that have so long delayed a needed mutual effort.”^

Some critics deplore the use of eco- nomic power in collective bargaining and yearn for the arbitrament of reason. They look hopefully for signs of the latter and a reduction of the former. It has been asserted ruefully that “there has been much more of an interplay of eco- nomic power than an exercise of pure reason.”* Again, Arthur Goldberg, speak- ing of collective bargaining disputes, says, “we can no longer resolve them on the old testing grounds of economic force and the exercise of raw power.”^

It is urged that we work out new forms of “coordinated private and public ad- ministrative processes” and patterns of “convergent private and public decision making,” such as those which have emerged in several European countries, particularly in Scandinavia. This in- volves a third-party role on government’s part. Others have suggested that major bargains be made under a public spot- light.

The tasks which many of the friends of collective bargaining believe it must tackle are largely beyond its scope. There are problems aifecting labor and manage- ment relations which collective bargain- ing cannot solve. The proposal that col- lective bargaining adjust itself to larger, even world, horizons is not feasible and some of the friends of collective bar- gaining admit this when they say “what collective bargaining can do to meet the current problems remains to be answered.”®

The first important question is whether

‘Arthur Goldberg, Address to Printers’ League Section of Priming Industries of Metropolitan New York. Daily Labor Report, No. 85, JVTay 1, 1962, p. E-I (italics added).

nVirtz, op. cit., p. D-2. “Goldberg, op. cit., p. E-1. “Wirtz, op. cit., p. D-2.

collective bargaining should be expected to solve these problems. Can the process thus be changed without the loss of its essential values? Perhaps collective bar- gaining is worth preserving as it is for what it can do effectively. I suggest that we should not covet the “pattern of con- vergent private and public decision mak- ing” prevalent in some European coun- tries. These countries have never had the same degree of freedom that has been enjoyed in this country. Eurtherniore, there is a real question whether the basic freedoms of collective bargaining can continue in the United States if the government plays an increasingly active role. The fact that certain procedures work in a small country’, with its own institutional arrangements, does not mean that they would work in a large country like the United States which has a different heritage. In addition, the Scandinavian and some other European systems function successfully, not because of collective bargaining, but through the instrumentalities of labor parties. These systems entail a cost, and. the question is whether the cost would be too great for us. The basic values of t?ie process of collective bargaining as we know it, namely private decision making and pai- ticipation of employers and workers, may be lost if the process is forced to change.

We need to recognize that collective bargaining is not an instrument for re- solving all problems in the industrial re- lations universe, let alone society as a whole. It is not the instrument for solv- ing problems of the whole society. Nor should those who engage in bargaining be expected to give heed to exhortations to check themselves in their limited domain in order to conform to a policy promul- gated for the larger universe. Collective bargaining is a private approach to

COLLECTIVE BARGAINING 549

immediate and particular problems. At the same time, collective bargaining does function within certain restraints—and these may be inexorable indeed—which the bargainers can ignore only at their peril. The factors in the macrocosm may be a part of these restraints, but to be important they must have a direct impact upon the parties. Otherwise, the parties cannot be expected to take them into account.^ The bargainers are entitled to seek the maximum results obtainable within the existing effective restraints. The union, like the corporation, operates on the basis of enterprise. Both pursue economic self-interest. To gain the most for its members in a given situation is the purpose for the union’s existence. But in doing so, it cannot flout the market and other restraints without suffering the consequences.

To provide a test of the criticisms of collective bargaining and a frame of reference for consideration of proposals that may come in the future, it is im- portant that the process of collective bar- gaining be fully understood.

CONDITIONS PRECEDENT TO AND POSTULATES ABOUT COLLECTIVE BARGAINING

Even though collective bargaining has gained a fair degree of acceptance as an institution of our society, the basic na- ture of the process has not always been understood. People sometimes fail to see why no other rule-making process for employment relations is of equal merit.

^t does no good to argue that if bargainers do not give consideration to broad objectives of society, they will be forced to do so by legislation or the heavy hand of government, for the remedy would destroy freedom that is the hallmark of the system. At the same time, this does not mean that the parties at the bargaining table might not profitably join with others in a different forum to seek solutions of the larger problems.

Whether collective bargaining can function at all in a society depends upon the national milieu of institutions, laws, and the roles played by government, management, and labor. Fortunately the requisite conditions have developed in the United States, although soime of them had to be fostered ancJ it may be- come necessary consciously |to preserve them. The best way to protect collective bargaining is to make sure that we under- stand the process and its values.

BASIC POSTULATES

1. A geniiine interdepen4ence exists between the parties. Each needs the other. The bitter conflict frequently char- acterizing the establishment of collective bargaining at the outset proved in most situations to be transitory. lioth parties are dependent upon the ongoing enter- prise. Even when they ha/e disputes which lead to work stoppages, neither party considers the relationship termi- nated and tJiey strive to £ djust their differences. Both are limited by the re- quirement that the enterprise must be kept going. Otherwise there i:ould be no bargaining Oiver the fruits oE the enter- prise. The interdependence is more than pecuniary. It is also a reflect ion of ideo- logical compatibility. Bargaining takes place within the enterprise system and both parties are committed to the sup- port of the system.*

2. The parties, however, also have diverse or conflicting interests. Bargain- ing takes place over these conflicting interests. One should never fexpect com- plete union-management cooperation. One should not expect the parties to depart from their roles as adversaries. One should not expect a uWon leader

^It is doubtful if collective batgaining on a continuing basis can take place except under a condition of ideological compatibility.

550 INDUSTRIAL AND LABOR RELATIONS REVIEW

to ignore his role as an advocate, and he should not be urged to be a statesman nor to be concerned primarily with the public interest.

3. The union appeals to workers with respect to certain of their interests, such as job security and economic improve- ment. These interests attach the workers to the union. It must be noted, however, that a union is not a monolithic organiza- tion. At least three groups in it may be recognized: the hierarchy or paid staff, the dedicated or core group, and the rank and file. Each of these groups has separate needs. Other internal differences may be division between seniors and juniors, or between skilled and unskilled. Each of these factors may have to be accommodated.

Management, too, in addition to hav- ing interests which in part are diverse from those of the union, is characterized by subgioups, each of which has separate interests and needs.

4. The parties to collective bargain- ing are not completely informed of the precise nature of the position of the other. They, of course, know their own positions, provided there is internal unity. And if they are sojihisticated, they will know a great deal about each other, although their knowledge is not likely to be complete. It is obvious, however, that sophisticated bargainers may have realistic expectations of the terms of settlement which they will finally achieve. To some extent, therefore, the formali- ties of bargaining will have some char- acteristic of a ritual. This has been recognized and, in some situations, the bargaining may be little more. But to reduce all collective bargaining to a mere ritual is to distort the process and miss its importance. Even when each of the chief negotiators understands the requirements of settlement, the internal

bargaining in either the union or the company may be critical. What may appear to be ritual is a necessary allow- ance of time to work out serious internal differences.

5. Both parties operate within certain internal and external restraints. The needs and expectations of the various sections within each organization impose limits upon the freedom of the agents who do the bargaining. Bylaws and poli- cies, as well as the internal politics of the organizations, set limits for the bar- gainers.

There are, in addition, external re- straints. Broadly, these are economic, political, social, and legal. The parties must operate within the restrictions and limits imposed by society, whether in the form of laws, customs, economics, politics, or morals.

6. It must be assumed that the parties, over time, find some balance of poxver. Any situation in which one party has power arbitrarily to impose its will on the other is not a situation in which bargaining can take place. Power to paralyze is alien to the collective bar- gaining process.

If the power concept of collective bar- gaining is rejected, one will have to choose from among limited alternatives. Rejection of power as the moving force in transactions sacrifices a central feature of an enterprise society. If it is rejected there are really only two alternatives to collective bargaining, both involving the compulsion of government: (1) compul- sory arbitration or fact-finding, or (2) legislative enactment. Either of these would destroy the values which the col- lective bargaining process offers.

FACTORS INFLUENCING PRACTICE

The process of collective bargaining in any given situation^—plant, communi-

 

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