Essay on Wage Issues under Collective Bargaining

Introduction

The decision made by employees in any organization to unionize marks the beginning of collective bargaining. Collective bargaining is defined as the process of negotiations that take place between employers and employee representatives who are officials of the union. It is an important process handled by employers, organization, and the trade unions that put in place fair wages and better working conditions for employees, and creates a conducive environment for sound labor relations. Simply put, it determines and regulates the terms and conditions for employment (Grimshaw, Bosch, & Rubery, 2013). Furthermore, collective bargaining is a fundamental international right as is enshrined in the ILO Constitution which therefore means that an employer has no way of denying his/her employees their rights. Contract negotiations primarily affect the following areas; wages and wage-related issues, employee benefits, administrative clauses, and institutional issues (Marginson, 2009). This paper is aimed at identifying wage issues under collective bargaining and finding solutions and recommendations for these issues.

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Wage and Wage-Related Issues

Wages are monetary remuneration (or compensation, labor, personnel expenses) paid to an employee by an employer in exchange for satisfactory work done. Wages form the most important discussion during contract negotiations or collective bargaining. Determination of basic wage rates is a delicate issue that cannot simply be identified by the employer on his/her own. The introduction of the labor union representatives helps to ensure that everyone's desires are heard, and after careful deliberations, an amicable wage rate figure is put forward that is payable and is equivalent to the work done (Grimshaw, Bosch, & Rubery, 2013).

Wages have particular issues that are related to it. These issues should also be considered during contractual negotiations. The determination and adjustment of wage rates after a period is one such consideration. Wages are meant to rise with rising economy. It is, therefore, important to keep such issues in mind and work out a formula that has a clause that ensures for this rise. It could also be identified as cost of living adjustments. Wage differentials are a labor term that relates to and analyzes the wage rate against risk, unpleasantness or undesirable attributes of a job. Overtime rates refer to the wages that an employee should earn for work done in excess of actual normal work hours. These rates are usually higher than normal wages. Wage adjustments refer to a change in the wage rate of an employee. It often moves up rather than downward (Jefferson, 2017). Collective bargaining should take into account wages and its related issues when determining working conditions and pay for each employee.

Employee Benefits

Employee benefits also identified as fringe benefits, perks or prerequisite are all non-wage compensation that is offered to employees together with their normal salaries and wages. Some of the employee benefits are mandated by the law to be included in the pay package of employees. Mandatory benefits include; Medicare, Social Security, Federal Insurance Contribution Act (FICA) (applies to the federal government and is used to fund Medicare and social security). These should be contributed by both employers and employees (Grimshaw, Bosch, & Rubery, 2013).

Employee benefits could also include pension plans, paid holidays, paid vacations, dismissal plans, unemployment benefits, and dismissal plans. These are usually provided by employers who identify how much their employees contribute to their growth and feel the need to compensate them not just monetarily, but also in kind. Benefits make an organization more attractive to potential employees. Other than the mandated employee benefits, most of the other employee benefits are tools used to motivate employees, reduce employee turnover and ensure that the employees feel secure while working for the organization. It is very common in competitive organizations that are known to poach employees from each other, and the benefits are useful in tying down important employees to the organization (Jefferson, 2017). Collective bargaining is an important tool in ensuring that employee benefits address the employee benefits without hurting the organization.

Institutional Issues

Institutional issues focus on the rights and duties of the employees, the employers, and the unions. The employer has his/her duties and obligations in the organization same as the employees and labor unions. However, there are instances where these institutions are faced with problems that affect how they meet their obligations. Certain institutional issues are seen as either ignorance or overstepping the boundaries placed for each institution in an organization. These tend to bring unnecessary tension to the members. Collective bargaining is aimed at addressing these issues detailing how they are to be handled in the future (Marginson, 2009).

Institutional issues include; union security, work-life programs, and their qualities, and check off procedures. Unions should not just have the security of office which is autonomous to the employer; they should also have basic security especially when dealing with vital issues. The quality of work-life programs created by the employer should consider employee needs to ensure that there is maximum organizational performance. It is important for collective bargaining to offer information in this area that is necessary for achieving the set objectives. Checkoffs are deductions by employers from employee wages for union contributions (Marginson, 2009). Discussions on how the procedure for effecting checkoffs is important so as not to upset employees.

Administrative Issues

Administrative issues deal with the relationship that exists between the employer and the employee. Some of the administrative issues include; seniority, employee discharge and discipline procedures, technological changes, health and safety, job security, work rules, leaves, training, and health and safety. All these have to do with the relationships that exist between the employees and the organization or the employees and the employer (Jefferson, 2017).

They are issues that affect the administration and require that the implementation of some of these issues to be dealt with by the administration (Marginson, 2009). It is important that the collective bargaining agreement takes into account these administrative issues so that there is a known way of dealing with these administrative issues when they rise in the future.

Recommendation

To ensure that there is no wage-related grievance from unions about employee wages, an organization should implement systems that identify with these issues. For instance, I would recommend that an employer should use salary ranges in determining pay, review and compare these with the same business organization and their wage rates and adjust the wages where necessary together with other stakeholders at the contract negotiation table/collective bargaining table.

It is important to identify a salary range based on the title he/she holds plus his/her level of education and experience. By coming up with these, the employees are paid according to determined criteria that ensure that each employee is compensated according to how he/she ranges in these criteria. Comparing these ranges and figures with those of other similar companies and their payment package identifies how much is commonly paid so as not to underpay or overpay the employee. It also helps to ensure an employee cannot leave because of better wage pay in another organization because what is being offered is equal or slightly more. The collective bargaining will ensure that the figure determined meets everyone's needs which reduces the risk of wage-related grievance (Grimshaw, Bosch, & Rubery, 2013). I believe that using this method is the best way of ensuring grievances is kept at bay.

Conclusion

In conclusion, collective bargaining is an important tool in addressing the needs of employees especially in areas dealing with wages and other benefits. Most organizations have kept grievances at bay because of these negotiations. Employees are the biggest beneficiaries because, before collective bargaining, payment was made as per the choice of the employer. Indeed, some issues are major talking points during collective bargaining as described above. They include; wages and wage-related issues, employee benefits, administrative clauses, and institutional issues. These cause problems during negotiations. However, they can be settled amicably. Collective bargaining is here to stay as it is the best solution for ensuring that both sides, employer and employee leave the table happy.

References

Grimshaw, D., Bosch, G., & Rubery, J. (2013). Minimum Wages and Collective Bargaining: What Types of Pay Bargaining Can Foster Positive Pay Equity Outcomes? British Journal of Industrial Relations, 52(3), 470-498.

Jefferson, M. (2017). 12. Trade unions: recognition, collective bargaining, and industrial action. Law Trove.

Marginson, P. (2009). Performance pay and collective bargaining: a complex relationship. Rethinking Reward, 102-119.