Wage Issues under Collective Bargaining

Wage Issues under Collective Bargaining

Collecting bargaining involves negotiations between unions representing employees and employers with an aim of establishing better working terms and conditions. Collective bargaining involves looking into issues such as working hours, remuneration and other employment terms. Unions and employers does not necessary have to agree on issues, but they are required to bargain on various issues affecting employment in good faith. The main hypothesis in this study is that industries which use the collective bargaining process to resolve wage issues have a low labor turnover, high productivity, and low incidence of strikes. The second hypothesis is that employees in industries which embrace collective bargaining agreements have a higher job satisfaction.

Numerous researches have been carried out on the importance of collective bargaining in industrial conflict resolution and industrial harmony. Majority of these studies indicate that collective bargaining plays a significant role in industrial conflict resolution and in ensuring industrial harmony. An empirical study conducted by Adewole (2011) in the state of Nigeria highlights the critical role that collective bargaining plays in industrial conflict resolution. The study found that frequent negotiations with workers representations can effectively reduce conflicts. This study was conducted in five manufacturing industries. From the number of respondents interviewed, 78 percent of them were in favor of collective bargain as the best method for resolving conflicts with employers. The rest (22%) felt that strikes or demonstrations was the best method of solving conflicts.

Hayter, Fashoyin & Kochan (2011) carried out a detail study to determine the role played by collective bargaining in the U.S. according to the study, collective bargaining has served as a platform for reducing inequalities in the workplace, improving the working conditions, improving basic wage of workers and as a source of innovation. According to the trio, collective bargaining played a critical role during the recent 2008 economic crisis. Collective bargaining reduced potential conflicts between workers and enterprises at a time when chances of developing conflicts were significantly high. The study examines the role various collective bargaining agencies have played in different parts of the world, including the U.S. Hicks also (2014) conducted an empirical study of the role played by collective bargaining in the aftermath of the 2008/2009 recession. The study indicates that employers were able to reach a no-salary increment agreement with employees in the years after the recession without any major labor issues.

Treuren & Frankish (2014) examines the factors which contribute to employee satisfaction in the workplace. Among these factors, is the impact of employee understanding of the terms and conditions of the employment to job satisfaction. The study involved an analysis of employees in a non-profit organization. The results indicated that employees who clearly understood every facet of the employment contract recorded better satisfaction levels. Satisfaction of employees contributes to high retention of employees or low turnover rates. Collective bargaining helps employees understand the employment contract details and hence high job satisfaction.

In conclusion, the assumptions stated in the hypothesis are a true reflection of the critical role played by collecting bargaining in various industries. Drawing on the numerous studies, collective bargaining reduces employee turnover and incidences of strikes. In addition, the studies indicate that collective bargaining increases the productivity and job satisfaction levels of employees.


Adewole, O. A. (2010). Collective Bargaining as a Strategy for Industrial Conflict Management in Nigeria. Journal of Research in National Development, 8(1): 1-12.

Hayter, S., Fashoyin, T., & Kochan, T. A. (2011). Collective Bargaining for the 21st Century.       The Journal of Industrial Relations, 53(2): 225-247.

Hicks, S. (2014). Post-Recession CBAs: A Study of Wage Increases in the Agreements of Four   State-wide Faculty Unions. Journal of Collective Bargaining in the Academy, 6(4): 23-           76. Retrieved from: http://thekeep.eiu.edu/jcba/vol6/iss1/4

Treuren, G., & Frankish, E. (2014). The Impact of Pay Understanding on Pay Satisfaction and     Retention: Salary Sacrifice Understanding in the non-for-profit Sector. Journal of       Industrial Relations, 56(1): 103-122.

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