Impact Of Collective Bargaining Process On The Renumeration Of Workers

Project and Seminar Material for Industrial Relations and Personnel Management

Impact Of Collective Bargaining Process On The Renumeration Of Workers


The study focuses on the impact of collective bargaining process on the remuneration of workers in Intercontinental Distillers Limited. In other to establish this fact remuneration indicator (wages) and the collective bargaining indicators (bargaining power and length of union membership) were identified. Other collective bargaining indicators like workers motivation and productivity were also identified.

Frequency distribution Tables, Spearman Rank order correlation was used to analyze the data so obtained from the administered questionnaires while the t-score statistical method was used to test the relevant hypotheses. Collective bargaining process tend to form the basis for wage determination in IDL (intercontinental Distillers Limited) workers unions and based on this it is recommended that good negotiation skills influenced by a well-informed trade union would go a long way to further enhance wage increases.

Table of Contents

Contents Page

  • Title
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Contents
  • Abstract

Chapter One

1.0 Introduction

  • 1.1 Background to the Study
  • 1.2 Problem Analysis
  • 1.3 Research Objectives
  • 1.4 Research Question
  • 1.5 Statement of Hypothesis
  • 1.6 Scope of the Study
  • 1.7 Significance of the Study

Chapter Two

2.0 Review of Literature

  • 2.1 Historical Background
  • 2.2 Nature of Collective Bargaining
  • 2.3 Types of Collective Bargaining
  • 2.4 Product of Collective Bargaining
  • 2.4.1 Procedural Agreement
  • 2.4.2 Significance of Procedural Agreement
  • 2.4.3. Issues for Discussion in Procedural Agreement
  • 2.4.4 Substantive (Collective) Agreement
  • 2.4.5 Legal Enforcement of Collective Agreement
  • 2.5 Collective Bargaining Process
  • 2.6 Parties Involved in Collective Bargaining
  • 2.7 the Functions and Objectives of Collective Bargaining
  • 2.8 Benefits of Collective Bargaining
  • 2.9 Conditions for Successful Collective Bargaining
  • 2.9.1 Pluralism and Freedom of Association
  • 2.9.2 Trade Union Recognition
  • 2.9.3 Observance of Agreement
  • 2.9.4 Support by Labor Administration Authorities
  • 2.9.5 Good Faith
  • 2.9.6 Proper Internal Communication
  • 2.10 Developing Negotiations Skills in Collective Bargaining
  • 2.11 Current Trend in Collective
  • 2.12 Current Trend in Collective Bargaining in Nigeria
  • 2.13 the Food, Beverage and Tobacco Unions in Nigeria
  • 2.13.1 Food Beverage and Tobacco Senior Staff Association (FOBTOB)
  • 2.13.2 Association of Food Beverage and Tobacco Employers (AFBTE)
  • 2.13.3 National Union of Food Beverage and Tobacco Employees (NUFBTE)

Chapter Three

3.0 Research Methodology

  • 3.1 Restatements of Research Questions and Hypothesis
  • 3.1.0 Research Question
  • 3.1.1 Hypothesis
  • 3.2 Research Design
  • 3.3 Characteristics of the Study Population
  • 3.4 Data Collection Instrument
  • 3.5 Analytical Techniques / Statistical Treatment of Data

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Respondents’ Characteristics and Classifications
  • 4.2 Presentation and Analysis of Data According to the Research Questions
  • 4.3 Hypotheses Testing
  • 4.4 Discussion

Chapter Five

5.0 Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography

Chapter One

1.0 Introduction

1.1 Background to the Study

From the primordial era, the association of people or the coming together of people in order to cam a living has been the major elements of human existence. This association which to a large extent is voluntary is however constraints by the fact that the parties involved are not able to choose their own workmates. Therefore, the relationship existing between these workmates has been otherwise referred to as industrial relations (FOBTOB Lecture September, 2007).

But the most important obligation owned by an employer to an employee is to pay his or her wages/salaries. Consequently, the fulfillment of this obligation tends to make up about sixty percent of the total cost of running the business (Cole, 2002).

However, one of the most important influences in the fulfillment of this obligation by a certain organization encompasses the presence of trade union and the subsequent bargaining strength of such a trade union.

More importantly, for the fact that fulfilling this wage obligation instigates a relationship between the employees and the employer, it therefore means that the concept termed “employee relation is one very paramount issue of discourse- it involves the interrelationship both formal and informal between the employer and the employee. But in a more specific term, industrial relation which is an aspect or employee relation is more concerned about how these relationships among others including wages and general work conditions or employee’s remunerations are regulated.

Principally, the regulation of this relationship between employer and employee is usually through a process of collective bargaining (Fashoyin, 1992). However, the employer must fulfill its obligation for the business entity to continue. Though, conflict of interest or opinions might arise in the course of this relationship. In order for the management andemployee to operate harmoniously, there must be in place machinery through which these differences of opinions could be resolved so that production will not be disrupted or the continuous existence of the system might not be threatened. This machinery, thus providing an opportunity for a harmonious relationship between both parties is what collective bargaining is all about- it is a practice by which employees and employers meet from time to time to settle the terms and conditions of employment (FOBTOB lecture, Sept.200?).

Collective bargaining has become a vital process in management-employee relations. It allows agreed rules of conduct to be arrived at between the parties involved (FOBTOB lecture, Sept.2007).Within these rules, terms and conditions of employment or the modalities for the remuneration of workers agreed upon are implemented. But the underlying factor of collective bargaining process is to reach agreement on terms that are mutually beneficial to both parties irrespective of divergence of interest and opinions (Fashoyin, 1992).

1.2 Problem Analysis

In the food, Beverage and Tobacco Industry and other industrial sector where Collective Bargaining process which is believed to be very effective and widely accepted mechanism in the determination of employment terms and condition the challenges associated with the process cannot be underestimated.

Some of the associated problems identified with this process might include the following;

  1. Paternalistic role of management; always wanting to solely determine the terms and conditions of employment and not wanting to give room for joint consultations or joint-decision making.
  2. Spurious request by the trade unions; not basing their demands on current economic realities.
  3. Delay tactics in a bid to avoid negotiations by the management.
  4. Management hiding under the guise of national agreement to shy away from enterprise level bargaining or vice visa as the case may be.
  5. Improper representation by the union representatives; they lack negotiation skills or they are either not well educated or are uninformed to engage in constructive and logical negotiations.
  6. Instrument of manipulation in the hands of management against their members or seeking personal interest.

The stated problems bring to fore the inherent imperfections associated with the collective bargaining process even if it had been adjudged one of the best mechanisms for setting terms and conditions of employment or in the settlement of disputes.

1.3 Research Objectives

The purpose of this research is to specifically discuss and evaluate collective bargaining process and it impacts on workers remuneration in Intercontinental Distillers Limited. In order to effectively achieve the purpose of the study and to further address the research questions an attempt is made to realize the following objectives;

  1. To carry out a review of the practices of collective bargaining in the food, Beverage and Tobacco industry in general and in Intercontinental distillers in particular.
  2. To determine the extent to which collective bargaining (bargaining power/length of union membership) over time has influenced wages of each category of workers in Intercontinental distillers limited.
  3. To establish if there exists any significant percentage change in wages overtime between, the junior and senior staff over time as result of collective bargaining.
  4. To make policy recommendation in line with our findings.

1.4 Research Question

In order to support the aforementioned objectives, this research attempt to answer the following questions;

  1. What significant impacts do approaches to collective bargaining process has ‘on remuneration of workers in Intercontinental Distillers Limited?
  2. What percentage change exists over time between the junior and senior staff unions due to different approaches to collective bargaining?
  3. What are the perceptions of IDL workers on the impact of collective bargaining process on motivation and productivity (bottom line)?

1.5 Statement of Hypothesis

  1. Ho; Wages will not be influenced by the bargaining power of the union and the length of union membership.
    H1; Wages will be influence by the bargaining power of union and length of union membership.
  2. Ho; Collective agreement or bargaining power will not lead to motivation and productivity of union members.
    H2; Collective agreement or bargaining will lead to motivation and productivity of union members.

1.6 Scope of the Study

In an attempt to review and evaluate the impact of collective bargaining on workers remuneration, two in-house unions (the Junior and Senior Staff Unions) in Intercontinental Distiller Limited under the Food Beverage and Tobacco Industry; makers of wide range of alcoholic and non-alcoholic fruit drinks was investigated:

The research, principally evaluated the effect of collective bargaining indicators (bargaining power, length of union membership) on wages, motivation and productivity).

The various reviews were obtained from data collected from texts, journals, and other means like the internet or related research work. Primary data was also gathered from the result of the questionnaire survey. This research is however not politically motivated neither will it tend to instigate certain group against the union or management in the organization but it is an avenue to substantively add to existing knowledge in this chosen area of study.

1.7 Significance of the Study

Collective bargaining otherwise regarded on a general term to mean industrial democracy is one mechanism for wage determination; be it at the industrial-wide level or at the enterprise level.

This study has become very necessary in other to further create awareness on the impact of collective bargaining process on wage determination and the inherent bargaining power needed as it relates to skills/educational background to reach collective agreement.

Chapter Five

5.0 Summary, Conclusion and Recommendation

5.1 Summary

This research study is an evaluation of the impact of collective bargaining process on the remuneration of workers in Intercontinental Distillers Limited. It is however evident that one of the most important obligation that the employer own the employee is too able to pay the salary/wages irrespective of the fact that such obligation would cost employer about sixty percent of the business running cost. (Cole, 2002). But the presence of trade union to a great extent influences the fulfillment of this obligation especially through the instrument of collective bargaining. Apart from influencing the wages/conditions of employment it also set the one for regulating the relationship that exists between both parties. In actual fact, collective bargaining is specifically an industrial relations mechanism put in place to determine the employment terms and conditions of workers.

But recently, collective bargaining mechanism has become more encompassing; not only setting rules that govern the relationship between the employer and employee as it relates to employment terms and condition. It has began to take into consideration how the business should be run, it has began to take into account competitive pressures faced by the organization and other issues relating to restructuring, new technology and organizational bottom line.

Although, collective bargaining is believe to take place at both the national and the enterprise level, but recently the trend has began to tilt more towards the enterprise level bargaining especially in’ industrialized nation like Sweden which has had a highly centralized bargaining system. Though, the faith in industrial-wide or centralized bargaining not still fettered but employers in this nations have began to feel that centralized bargaining does not give them the ample opportunity to use pay as an instrument for productivity enhancement and to compensate for skills and performance.

However, wherever parts of the world or economy that collective bargaining is being practice; not ruling out local or cultural modifications as it relates to individual nation or economy ~ which Nigeria is not an exception), collective bargaining have in recent times come to involve a more participative and non-adversarial style which is within the context of global competitive environment.

In the course of this research study however data were generated from the administered questionnaires, Apart from eliciting the personal characteristics of the respondents. The questionnaire also featured questions designed specifically embody the research questions and hypothesis. The research drew it sample population from intercontinental distillers’ limited staff unions- both the junior and senior staff unions. The research showed that collective bargaining especially at the industrial- wide level have great influence in wage determination of IDL staff unions. It was also observed that for the past five years, the major determinant of wage increment had been through the instrument of collective bargaining (especially at the .industrial-widelevel), which also having resounding influences 0nmembers’ productivity and source of motivation.

5.2 Conclusion

During ‘the course of the review of the relevant literature a better understanding of the subject matter was instigated, the regression and correlation analysis model and t-score was adopted in validating the research question and respectively testing the hypothesis. In the light of this development, the following conclusions were reached;

  1. That collective bargaining whatever level it is being practice is a form of mechanism that instigate industrial democracy.
  2. That there is a reasonable appreciation of collective bargaining in the practice of industrial relation in Nigeria.
  3. That collective bargaining process has had a significant impact in the determination of employment terms and conditions of member of trade union.
  4. That collective bargaining tends to create a sense of belongingness amongst both parties.
  5. It has also provided avenue for the workers to contribute to the development and progress of the organization.
  6. That collective bargaining in recent times have taken a new dimension to involve a more participatory and non-adversarial style within the context of global competitive environment.
  7. Even though the western democracy had began to consider more critically enterprise based collective bargaining mechanism. In a developing economy like Nigeria industrial-wide collective bargaining mechanism had been the centre point of collective participation in the protection of the interest of labor union and a source of motivation for the workforce in general.

5.3 Recommendation

No matter how effective collective bargaining mechanism had been it is however not devoid of some short comings. Some of the reasons adduced to such short comings include among others educational level of Union representatives, corruption on the part of union leadership, selection process of the leadership, lack of negotiation skills, deliberate avoidance of meetings on the part of management and selfish and egoistic trade union leadership on the one and the management on the other hand. Results of this study have underscored to an extent a few of this problem and it is in the light of this that the following recommendations are made;

  1. Union leadership involved in collective bargaining should be well educated in other to present a logical argument based on information available to them.
  2. In other to enhance the bargaining power of the union leadership any act or corrupt tendencies should be eliminated.
  3. The selection process of the union leadership should be democratic enough to avoid putting square pegs in a round hole.
  4. Development of negotiation skills of the leadership through the attendance of seminar, workshops is eminent as this will strengthen the bargaining power.
  5. True representation should be the watchword of any union leadership as selfish interest and egoistic tendencies are unhealthy and limit the realization appreciable welfare of workers.
  6. Prompt response to proposals on the part of management would lead to speedy conclusions of negotiations.
  7. Even though the complete elimination of the paternalistic role of management cannot be achieved a more participatory relationship will enhance a greater sense of belongingness.

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