Collective bargaining, which involves the negotiation and conclusion of collective agreements, is the principal means by which employers and workers’ organizations determine terms and conditions of employment. Once workers’ and employers’ organizations have been freely established, collective bargaining is therefore central to the exercise of freedom of association and to systems of industrial relations. Over the years, it has proven its worth as a democratic instrument for overcoming conflicts of interests, thereby avoiding recourse to more obdurate forms of industrial action, such as strikes. As a safety valve ensuring a peaceful, cooperative and therefore more efficient labour market, it is therefore a cornerstone of any advanced democracy and developed market economy.
The emphasis placed on collective bargaining in the ILO’s basic human rights instruments and in the law and practice of the vast majority of member States is testimony to its importance in a modern economy. It also amounts to clear recognition of the principle that workers’ organizations should, on behalf of their members, be able to negotiate terms and conditions of employment with employers which are better than each worker could achieve individually.
Collective bargaining is consequently a means of overcoming the initially unequal bargaining power of individual workers vis-à-vis their employers through the negotiation of collective agreements, which supersede the conditions set out in individual contracts of employment. In return, employers can expect improved productivity and greater loyalty from a more highly motivated and skilled workforce enjoying better working conditions.
The promotion of collective bargaining is one of the central and most important concerns of the ILO.1 As is recognized by the Declaration of Philadelphia, the ILO has a "solemn obligation ... to further among the nations of the world programmes which will achieve ... the effective recognition of the right of collective bargaining, the cooperation of management and labour in the continuous improvement of productive efficiency, and the collaboration of workers and employers in the preparation and application of social and economic measures."2
The importance of collective bargaining has recently been reaffirmed by the ILO Declaration on Fundamental Principles and Rights at Work of 1998, according to which all the ILO’s member States, even if they have not ratified the Conventions in question, have an obligation, arising from the very fact of membership in the Organization, to respect, to promote and to realize, in good faith and in accordance with the Constitution, the principles concerning the fundamental rights including the effective recognition of the right to collective bargaining (Paragraph 2 (a) of the Declaration).
The right to collective bargaining is recognized and protected by several ILO Conventions and Recommendations, in particular Convention No. 983 and the Collective Bargaining Convention, 1981 (No. 154).4
The right to engage in collective bargaining is also recognized in some other important international texts including the Inter-American Charter of Social Guarantees (1948), the European Social Charter (1961) and the European Community Charter of Fundamental Social Rights of Workers (1989).
The importance of the obligations laid down in these instruments cannot be overemphasized, particularly as the institution of collective bargaining comes under increasing pressure from recent economic and social developments.5
The primary objective of national policy in this field should be to promote and encourage free and voluntary collective bargaining which allows the parties the greatest possible autonomy, while establishing a legal framework and an administrative structure to which they may have recourse, on a voluntary basis and by mutual agreement, to facilitate the conclusion of collective agreements.6
Convention No. 98 requires countries which ratify it to take:
Measures appropriate to national conditions (…), where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements (Article 4).
Convention No. 154 provides more straightforwardly that "measures adapted to national conditions shall be taken to promote collective bargaining" (Article 5, paragraph 1).
One of the primary means by which member States seek to comply with this obligations is through the enactment of labour legislation, often supported by other means, such as collective agreements, arbitration awards, administrative rules and regulations, decrees and ministerial orders.7 They also frequently establish of administrative bodies to monitor observance of the respective legal obligations and to provide conciliation and mediation services to assist the parties.
The degree to which it is appropriate to use legislation to promote and develop collective bargaining, and the level of detail to be included in legislation depends on national conditions, and particularly on the strength or otherwise of the national tradition of collective bargaining.8 For example, depending on the context, a government may consider it appropriate to enact detailed procedures and mechanisms governing collective bargaining. In other cases, it may simply be necessary to refer in a statutory provision to the right of employers, their organizations, and trade unions to engage in collective bargaining. Tailoring the level of regulation to suit national conditions is critical. Just as the lack of a clear legislative framework can undermine collective bargaining in some countries,9 over-regulation can have a similar result in others.10
It is very widely recognized that the obligation to promote voluntary negotiations with a view to the regulation of terms and conditions of employment by means of collective agreements implies an obligation to guarantee to the parties concerned the right to engage in collective bargaining. Where national circumstances so require, it may also involve the need to make provision for a certain number of ancillary legal obligations so that the right to collective bargaining can be effectively exercised in practice, including a duty under certain conditions to recognize the party for collective bargaining purposes and to negotiate with that party in good faith.
Under the relevant ILO Conventions, the right to engage in collective bargaining applies to all workers' organizations and all employers and their organizations,12 except to the extent that certain specific exclusions are permitted and to any possible limitations related to the representative character of an organization.
With regard to exclusions from this right, Conventions Nos. 98, 151 and 154 provide that the extent to which they apply to members of the armed forces and the police may be determined by national laws or regulations or national practice.13 This means that national laws or regulations may apply these guarantees completely, partially or not at all to members of the armed forces and the police and their organizations.
Moreover, Convention No. 98 explicitly provides that it does not deal with the position of public servants engaged in the administration of the State. This means that, while such persons enjoy the right to organize by virtue of Convention No. 87, the guarantees set out in Convention No. 98 do not extend to them, although Convention No. 98 does provide that it must not be construed as prejudicing their rights or status in any way.14
The ILO's supervisory bodies have found that these exclusions are to be applied in a restrictive manner. In the case of public servants, the Committee of Experts has drawn a distinction between, on the one hand, public servants who by their functions are directly employed in the administration of the State, who may be excluded from the scope of Convention No. 98, and, on the other hand, all other persons employed by the government, by public enterprises or by autonomous public institutions, who should benefit from the guarantees set out in the Convention.15
A restrictive view should also be taken of the exclusions relating to the police and the armed forces. For example, in one case the Committee on Freedom of Association found that civil aviation technicians working under the jurisdiction of the armed forces could not be considered, in view of the nature of their functions, as belonging to the armed forces and as such liable to be excluded from the guarantees set out in Convention No. 98.16
The right of workers' organizations to bargain collectively is recognized in the vast majority of countries in law or in practice, although this right is often subject to the exclusions mentioned above.
National legislation sometimes explicitly defines the parties entitled to bargain collectively and the level at which bargaining may take place. The parties between whom bargaining may take place are typically defined as workers' organizations (or trade unions) on the one hand and individual employers, several employers negotiating jointly or organizations of employers on the other.
As regards the levels at which collective bargaining may take place (such as the establishment, enterprise or branch of activity), there is no generally accepted best level for bipartite collective bargaining. The appropriate level or levels for bargaining depend on the strength, interests, objectives and priorities of the parties concerned, as well as the structure of the trade union movement, employers' organizations and traditional patterns of industrial relations17.
Paragraph 4 the Collective Bargaining of Recommendation, (1981) No. 163, indicates that:
Measures adapted to national conditions should be taken, if necessary, so that collective bargaining is possible at any level whatsoever, including that of the establishment, the undertaking, the branch of activity, the industry, or the regional or national levels.
Legislation that restricts the choice of the parties in this regard may contravene Convention No. 9818 and the principle that workers' and employers' organizations have the right to organize their own activities and formulate their own programmes.19 On the other hand, legislation may establish a framework for collective bargaining to which the parties may have recourse, if they so wish.
Example
Collective bargaining cannot occur unless the parties involved have recognized one another for that purpose.20 Such recognition may be voluntary, as is the case in some countries where it is based on agreements or a well-established practice. However, to safeguard against the refusal by some employers to negotiate with trade unions representing the employees concerned, many countries have adopted legislation obliging employers to recognize a trade union for collective bargaining purposes, subject to certain conditions.21 In such cases, the question of whether or not an employer is obliged to recognize a trade union for this purpose normally depends on the definition established of the representativeness of organizations in relation to those whom they seek to represent.
At its simplest, a provision of this kind can identify who is responsible for carrying out collective bargaining, thereby assisting the parties involved to recognize one another.
Example
The determination of the representativeness of organizations can be a difficult issue, particularly in countries where there exist a multiplicity of trade unions and where bargaining generally takes places at the enterprise level, but also in cases where bargaining takes place at the industrial branch and national levels.22
Many countries have adopted legislation establishing procedures for the determination of the representative status of a party for the purposes of collective bargaining. It should be noted in this respect that, the concept of most representative organizations is recognized, for the purposes of representation in ILO bodies, by article 3, paragraph 5 of the ILO Constitution. However, the ILO's Committee of Experts has indicated that, in order to avoid any opportunity for partiality or abuse, where procedures of this kind exist, they should be based on objective and pre-established criteria.23
Example
Finally, with regard to the representative status of organizations, it should be noted that, while legislative provisions on this subject often lay down quantitative criteria (in view of the desire for objectivity), these provisions may also contain criteria such as authenticity, independence and territorial scope.
Example
In some countries, legislation makes provision for the recognition of a trade union as an exclusive bargaining agent in a bargaining unit. This allows the trade union concerned to represent all the employees in the unit for collective bargaining purposes, to the exclusion of other trade unions which may have members in the unit. Such legislation is usually found in countries where collective bargaining takes place mainly at the enterprise or establishment level and where the existence of trade union multiplicity makes collective bargaining complex and difficult. As there is a risk of this procedure being used to exclude from the collective bargaining process organizations that are freely chosen by workers, the ILO supervisory bodies have taken the view that where a statute provides for the certification or designation of an exclusive bargaining agent, certain safeguards should be included, namely:
Because of the need to provide for safeguards of this kind, legislation respecting the recognition of exclusive bargaining agents tends to be rather detailed and usually includes provisions regarding:
Example
Legislation establishing the procedure for the certification of an organization as an exclusive bargaining agent for all employees in a bargaining unit normally imposes a duty on such agents to represent all the employees fairly, whether or not they are members of the union.
Example
In some cases, and particularly when public policy seeks to promote collective bargaining at the industrial branch level, countries have adopted legislative provisions establishing an institutional framework for such bargaining. Such frameworks may simply rely on recognition procedures, while others may establish an institutional structure that can be used by parties wishing to bargain at this level.
Example
Effective collective bargaining involves the stimulation of dialogue and the promotion of consensus.26 A number of countries have endeavoured to do this by setting forth a statutory duty in the legislation intended to oblige the parties at the bargaining table to engage in fully informed negotiations. The ultimate purpose of this kind of duty is to ensure that the parties have every possible opportunity to reach agreement. In some instances, this duty is limited to a duty to negotiate, while in others it is expressed as a duty to bargain in good faith.
In this respect, it should be recalled that the ILO Committee on Freedom of Association has emphasized the importance that it attaches to the principle that employers and trade unions should negotiate in good faith and endeavour to reach an agreement, particularly in situations, such as essential services, where trade unions are not allowed strike action.27
Example
One of the principal obligations arising out of the duty to bargain in good faith is for the employer to provide the trade union with the information required to be able to engage in meaningful negotiations (see Recommendation No. 163, Paragraph 7(1)).28
Example
In line with the emphasis that is placed on voluntary bargaining and the free choice of bargaining parties, international labour standards establish a broad definition of collective bargaining and its subject matter. Article 2 of Convention No. 154 defines collective bargaining as extending to:
all negotiations which take place between an employer, a group of employers or one or more employers' organizations, on the one hand, and one or more workers' organizations, on the other, for (a) determining working conditions and terms of employment; and/or (b) regulating relations between employers and workers; and/or (c) regulating relations between employers or their organizations and a workers' organization or workers' organizations.
In line with the above, if it is considered necessary to define in law the subject matter to which the right to bargaining collectively extends, this should be defined broadly. In some countries, the case law (jurisprudence) establishes a distinction between issues on which the parties are obliged to negotiate, if one of the parties so requests, and issues on which the parties may voluntarily negotiate if they so agree. Occasionally, legislation establishes an obligation to include provisions in collective agreements on specified matters, such as the settlement of disputes over the interpretation and application of the agreement.
Example
Legislation on collective bargaining frequently includes provisions regarding collective agreements themselves. These provisions tend to cover such matters as:
Legislative provisions on this subject usually require agreements to be in writing, indicate the parties to the agreement, be signed by representatives of the parties and indicate the date on which they are to come into force. They sometimes also require the parties to include provisions on certain substantive issues, such as procedures for the settlement of disputes arising out of the agreement.
In accordance with the Collective Agreements Recommendation, 1951 ( No. 91), Paragraph 3(1):
Collective agreements should bind the signatories thereto and those on whose behalf the agreement is concluded. Employers and workers bound by a collective agreement should not be able to include in contracts of employment stipulations contrary to those contained in the collective agreement.29
Legislative provisions on this subject generally state that collective agreements are legally binding upon the parties thereto and on members of any organization party to the agreement. Provisions are also often included to the effect that the agreement is incorporated in or modifies the terms of any contract or agreement in force or concluded subsequently between the parties covered by the agreement.
Some jurisdictions require the parties to submit the collective agreement to the public authorities for approval before it becomes valid. Provisions of this kind are compatible with Convention No. 98, provided that they merely stipulate that approval may be refused if the collective agreement has a procedural flaw or does not conform to the minimum standards laid down in the applicable legislation.30 However, the possibility of interference in the right of the parties to engage freely in collective bargaining arises if the authorities are allowed full discretion to reject an agreement, which constitutes a violation of the principle of voluntary negotiations and the autonomy of the parties.
This requirement is frequently imposed by legislation. It is intended to allow the relevant public authorities to follow developments in collective bargaining, determine whether there is any legal flaw in an agreement and inform the parties thereof. It also means that the authorities concerned can be better prepared to assist the parties in dealing with any disputes arising out of the agreement or in later negotiations between the same parties.
National legislation sometimes requires employers to ensure that employees are informed of the collective agreements applicable to them (see Recommendation No. 91, Para. 8(1)).
The practice of the extension of collective agreements to employers and employees other than those to which they are directly applicable is mainly found in countries in which industrial branch level collective bargaining is prevalent. The legislation providing for this practice normally sets out a number of conditions relating to the representativeness of the parties to the agreement in relation to those to whom it would be made applicable, the requirement of a prior request by one or both of the parties to the agreement and the consultation of the representatives of those to whom it is to be extended. Recommendation No. 91, Paragraph 5(2), indicates that:
National laws or regulations may make the extension of a collective agreement subject to the following, among other, conditions:
(a) that the collective agreement already covers a number of the employers and workers concerned which is, in the opinion of the competent authority, sufficiently representative;
(b) that, as a general rule, the request for extension of the agreement shall be made by one or more organisations of workers or employers who are parties to the agreement;
(c) that, prior to the extension of the agreement, the employers and workers to whom the agreement would be made applicable by its extension should be given an opportunity to submit their observations.
Some of the examples given below cover a number of the above issues. Examples are given of provisions relating to a single issue when they are easily separable.
Example (General) Example (Legal force) Example (Registration of collective
agreements) Example (Notification of collective
agreements) Example (Extension of collective
agreements)
1. See for example, Promotion of collective bargaining, International Labour Conference, 66th Session, 1980, p. 62.
2. Declaration of Philadelphia, 1944, Article III.
3. The importance of this Convention is emphasized by the fact that, as of mid-2003, it had been ratified by 153 member States, the second highest ratification rate of any ILO convention.
4. Other relevant instruments include the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87); the Collective Agreements Recommendation, 1951 (No. 91); the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113); the Workers’ Representatives Convention (No. 135) and Recommendation (No. 143), 1971; the Rural Workers’ Organisations Convention (No. 141) and Recommendation (No. 149), 1975; the Labour Relations (Public Service) Convention (No. 151) and Recommendation (No. 159), 1978; and the Collective Bargaining Recommendation, 1981 (No. 163) (which supplements Convention No. 154). For other Conventions and Recommendations relevant to collective bargaining, see Collective bargaining: A fundamental principle, a right, a Convention, Labour Education 1999/1-2, Nos. 114-115, (ILO), p. 125.
5. See Gernigon, B, op. cit., p. 29.
6. General Survey of the Reports on the Freedom of Association and the Right to Organize Convention (No. 87), 1948 and the Right to Organize and Collective Bargaining Convention (No. 98, 1949, Report III (Part 4B), (ILC, 81st Session, 1994), para. 247.
7. See, for example, the references in Convention No. 154, Article 4.
8. For a recent discussion of the extent to which different countries use legislation to promote collective bargaining, see Casale, G., Collective bargaining and the law in Central and Eastern Europe: Some comparative issues (ILO-CEET, Working Paper No. 20, 1997).
9. See Bronstein, A. "Collective bargaining: A comparative analysis" in Collective bargaining: a fundamental principle, a right, a Convention, op. cit., p. 35.
10. See Rueda-Catry, M., Sepùlda Malbràn, J.M., Vega Ruiz, M.L. "Many social sectors are today demanding that trade unions work out a common position in the framework of the social dialogue" in Collective bargaining: A fundamental principle, a right, a Convention, op. cit., p. 53.
11. The right to collective bargaining is closely linked to the right to organize and to strike (see Chapters II and V).
12. Negotiations may also be conducted with workers' representatives (rather than organizations), as indicated in Convention No. 135 and Recommendation No. 143.
13. See Convention No. 98, Article 5, paragraph 1; Convention No. 151, Article 1, paragraph 3 and Convention No. 154, Article 1, paragraph 2.
14. See Chapter II.
15. General Survey, para. 200.
16. Digest of decisions and principles of the Freedom of Associaton Committee of the Governing Body of the ILO, Fourth (revised) edition, (ILO, Geneva, 1996), para. 805. In some countries, the members of the police and the armed forces are entitled to engage in collective bargaining. See, for example, the discussion of the case of the Czech Republic in Casale, op. cit., p. 14.
17. As Bamber notes, both centralized and decentralized bargaining may have advantages and disadvantages, depending on the context. See Bamber, op. cit., p. 434.
18. General Survey, para. 249.
19. Digest, para. 782.
20. Promotion of collective bargaining, op. cit., p. 15.
21. General Survey, para. 240; Promotion of collective bargaining, op. cit., p. 16.
22. A topic as complex as this cannot be considered fully in these guidelines. However some of the more important issues are addressed. For further consideration of the issues involved see, for example, Bamber, G, et al, "Collective bargaining" in Blanpain eds., Comparative labour law and industrial relations in industrialised market economies, 6th and rev. ed., (Kluwer, The Hague, 1998) p. 414; Casale, G., Union representativeness in a comparative perspective, (ILO/CEET, Report No. 18, 1996).
23. General Survey, para. 240. See also Paragraph 3(b) of Recommendation No. 163.
24. See Gérard Lyon-Caen and Jean Pélissier, Droit du travail, 16th edition, 1992, pp. 557-58 (para. 623).
25. General Survey, para. 240.
26. Bronstein, op. cit., p. 34.
27. Digest, para. 243.
28. Similar obligations exist under other international instruments, such as the OECD Guidelines for Multinational Enterprises, 1976 and the European Union Directive on European Works Councils, 1994.
29. See also Digest, para. 818.
30. General Survey, para. 251.