Republic of the Philippines

BOHOL ISLAND STATE UNIVERSITY

Main Campus
Tagbilaran City

Vision: A premier Science and Technology university for the formation of world class and
virtuous human resource for sustainable development in Bohol and the Country.
Mission: BISU is committed to provide quality higher education in the arts and sciences, as
well as in the professional and technological fields; undertake research and development and
extension services for the sustainable development of Bohol and the country.

Name: Gilbeys D. Tangcawan, LPT, MATVE

Program: Doctor of Philosophy in Technology Management

UNIT VI: Collective Bargaining

Definition- It is a process where the parties agree to fix and administer terms and conditions
of employment which must not be below the minimum standards fixed by law and set a
mechanism for resolving their grievances. Bureau of Labor Relations

Dale Yoder defines collective bargaining as a situation in which the essential conditions of

employment are determined by a bargaining process undertaken by representatives of a group
of workers on the one hand and one or more employers on the other.

According to David and Robinson, the term “collective bargaining typically refers to the
negotiation, administration and interpretation of a written agreement between two parties that
covers a specific period of time.

Introduction of Collective Bargaining in the Philippines

The system of collective bargaining in the Philippines was formally introduced in the
Philippines in year 1953 when a favorable labor relations policy set the stage for the workers
in non-agricultural employment to unionize freely, and to engage in collective bargaining
with their employers on a bilateral basis. The labor policy framework was subsequently
modified to include some of the agricultural workers. Likewise, employees of corporate
agencies of the government have been able to exercise the right to self-organization and
collective bargaining.

Labor Code Law of the Philippines

Chapter III. Rights of Legitimate Labor Organizations

Article 242. - A legitimate labor organization shall have the right :

 a. To act as the representative of its members for the purpose of collective bargaining;
b. To be certified as the exclusive representative of all the employees in an appropriate
bargaining unit for purposes of collective bargaining;

c. To be furnished by the employer, upon written request, with its annual audited financial
statements, including the balance sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the union has been duly recognized
by the employer or 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;

d. To own property, real or personal, for the use and benefit of the labor organization and its
members;

e. To sue and be sued in its registered name; and

f. To undertake all other activities designed to benefit the organization and its members,
including cooperative, housing, welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to the contrary, the income and the
properties of legitimate labor organizations, including grants, endowments, gifts, donations
and contributions they may receive from fraternal and similar organizations, local or foreign,
which are actually, directly and exclusively used for their lawful purposes, shall be free from
taxes, duties and other assessments. The exemptions provided herein may be withdrawn only
by a special law expressly repealing this provision. (As amended by Section 17, Republic Act
No. 6715, March 21, 1989)

Art. 243. Coverage and employees’ right to self-organization.

All persons employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions, whether operating for profit or not, shall have
the right to self-organization and to form, join, or assist labor organizations of their own
choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those without any definite employers may form
labor organizations for their mutual aid and protection.

What does Collective Bargaining Involve?

Modernization, the need for quality, and increased productivity are important for competing
in the international market. Modernization may cause the introduction of modern automatic
machinery and may require high skilled laborers. Thus, modernization results in the
displacement, laying off, and retrenchment of workers. Such condition results in hostility
between the workers and the management. In such a case, management and workers must
come together and use the concept of collective bargaining. Collective agreements provide
the climate for the smooth working of the business.

An individual worker under financial constraint cannot bargain directly to the employer. In
such situation, the individual may be tempted to accept undesirable conditions including low
renumeration. There is a fear of loss of a job in the minds of the worker. This fear may be due
to ignorance, illiteracy and industry-specific skill factors. Collective bargaining allows
workers to band together into larger groups like trade unions, create a louder voice that can
help provide the benefits for the workers and employers.
Objectives of Collective Bargaining

 To foster and maintain cordial relations between the employer/ management and
employees
 To protect the interests of the workers and employer through collective action and by
preventing unilateral actions from being taken by either party.
 To keep outside the government interventions
 To promote industrial democracy

Collective Bargaining Structure

Bargaining structure - includes concepts of bargaining units and bargaining levels. The
bargaining unit represents employees who are covered by an agreement. It also describes how
bargaining unit is composed determines on behalf of whom and with whom bargaining is
done. Bargaining unit also determines whether negotiations are with plant level management,
with number of employees in specific industry or area or employees from different industries.

Bargain Level- Plant, Industry and National

Bargaining Unit- Group of employees covered by a particular bargaining

Bargaining Scope- Range of subjects to be covered in particular negotiation

Bargaining form- written and formal, or unwritten or informal

NEGOTIATION AND PREPARATION ACTIVITIES IN BARGAINING

Collective bargaining can be an intense process that can be stressful and difficult for all
parties involved. It often involves a lot of back-and-forths, with offers and counteroffers. But
the end goal is to reach an agreement.

The process goes through a number of stages. These steps can be summed up as follows:

1. Identifying the issues and preparing the demands

2. Negotiating
3. Coming to a tentative agreement
4. Accepting and ratifying the agreement
5. Administering the agreement

There are instances, though, where the parties involved can't come to an agreement. If
the negotiation period expires without a collective bargaining agreement in place, union
representatives may suggest that workers go on strike until their demands are met.

Employers, on the other hand, may decide to lock out their employees until a suitable
agreement is reached. If they are locked out, employees have the right to picket. In most
cases, neither party wants to reach these points, which are considered drastic measures that
are used as a last resort.

Types of Collective Bargaining

Composite Bargaining
Composite bargaining has nothing to do with compensation. Instead, it focuses on other
issues, such as working conditions, job security, and other corporate policies, These may
include hiring and firing practices as well as workplace discipline. The goal of composite
bargaining is to come up with a suitable agreement leading to a lasting and harmonious
relationship between employers and their employees.
Concessionary Bargaining
As its name implies, concessionary bargaining focuses on union leaders making concessions
in exchange for job security. This is common during an economic downturn or recession.
Union leaders may agree to give up certain benefits in order to guarantee the survival of the
employee pool and, ultimately, of the business.
Distributive Bargaining
This process is characterized as benefitting one party financially at the expense of the other.
This can come through increased bonuses, salaries, or any other financial benefits.
Distributive bargaining normally favors workers over employers.
Unions must have a higher degree of power in order for distributive bargaining to work.
Higher membership means more power. If an employer refuses to accept a union's demands,
it can call a strike.
Integrative Bargaining
Each party tries to benefit through integrative bargaining, which is why it's often referred to
as a form of win-win bargaining. Each side tries to consider the other's position and bring
issues to the table that aim to benefit both parties. As such, employees and employers both
stand to lose and gain with integrative bargaining.
Productivity Bargaining
This type of bargaining revolves around compensation and the productivity of employees.
Labor union leaders often use higher salaries and compensation as a way to boost employee
productivity, which leads to higher profits and value for the employer. In order for this kind
of bargaining to work, both parties need to agree to financial terms in order to increase
productivity.
Advantages and Disadvantages of Collective Bargaining

Advantages
As the name implies, workers have a larger voice through collective bargaining. Being in a
group with the same goal(s) gives employees more power to negotiate demands with their
employers. Companies may be able to shut out the voices of one or two employees but can't
necessarily do the same with a larger group of unified individuals.

Workplace conditions can see significant improvements and guarantee all workers with the
same protections under collective bargaining. This includes the implementation of health
and safety checks as well as suitable salaries, overtime pay, and vacation time.

Employers and employees are fully aware of their rights and responsibilities under a
collective bargaining agreement. Once employment terms are negotiated, a contract is drawn
up. Both parties agree to the terms, which are clearly defined.
 Disadvantages
As mentioned above, collective bargaining is often a long, drawn-out process that can take
weeks or even months. Employers and labor union leaders may have to go back and forth
with employment terms. Union leaders are required to update employees and must put the
terms to a vote. If employees vote to reject a contract, the negotiating process begins again.

Collective bargaining often comes at a high cost. Employees and employers may have to
take time off from work in order to negotiate. This means less time on the job and, therefore,
a drop in productivity. Lengthy negotiations can affect a company's bottom line.

The process is often considered biased. Because employees are able to band together under a
single union, employers may be forced to negotiate and accept unfavorable terms in order to
keep their businesses running without much disruption.

Pros
 Employees have a larger voice.
 Improves workplace conditions and protects employees
 Establishes rights and responsibilities of employers and employees

Cons
 Lengthy process
 Comes at a high cost
 Employers may be forced to negotiate and accept unfavorable terms.

Characteristics of Collective Bargaining

1. Collective Process- The bargaining is collective in the sense that all the
employee’s bargain through their representatives for their common interests
and benefits.
2. Equal Strength- Both parties bargain from a position of equal strength.
3. Strategic- Collective bargaining has progressed from a show of strength to one
where a sophisticated strategy is needed.
4. Flexibility- Collective bargaining is not a one-way street. it is a give and takes
a process.
5. Voluntary by Nature- By nature collective bargaining is a voluntary activity as
it is not imposed b any law. The parties also go for collective bargaining for
larger interests. They voluntarily have a meaningful dialogue on various
troubling issues.
6. Dynamic- Collective bargaining is a dynamic process because the way
agreements are arrived at, the process of negotiation, and the mental state of
the parties involved keep changing.
7. Continous Process- Collective bargaining does not start with negotiations and
end with an agreement, It includes many prenegotiations activities and also
further negotiations.
8. Negotiation- Negotiations form an important aspect of the process of
collective bargaining. There is considerable scope for discussion, compromise,
and mutual gain.
9. Bipartite process- The employer and the employees negotiate the issues
directly, face to face without the intervention of a third party. It can flourish
only in an atmosphere that is free from animosity, reprisal, external pressure,
or third party control. parties should not act unilaterally.
10. Political process- Collective bargaining establishes rules by which the
employment relationship is governed. Thus, bargaining is a political process,
as it establishes a constitution by which both interest groups abide.