IMPACT OF COLLECTIVE BARGAINING PROCESS ON THE REMUNERATION OF WORKERS


IMPACT OF COLLECTIVE BARGAINING PROCESS ON THE REMUNERATION OF WORKERS

ABSTRACT

The study focuses on the impact of the 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. The 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                                             i

Certification                                         iii

Dedication                                         iv

Acknowledgment v

Table of contents                                     vii

Abstract                                         x

CHAPTER ONE

1.0    Introduction                                     1

1.1    Background to the Study                             1

1.2    Problem Analysis                                 3

1.3     Research Objectives                                 4   

1.4    Research Question                                 4

1.5    Statement of Hypothesis                             5

1.6    Scope of Study                                 5

1.7    Significance of Study                             6

CHAPTER TWO

2.0    Review of Literature                                 7

2.1    Historical Background                             7

2.2    Nature of Collective Bargaining                         9

2.3    Types of Collective Bargaining                         12

2.4    Product of Collective Bargaining                     12

2.4.1    Procedural Agreement                             13

2.4.2    Significance of Procedural Agreement                 13

2.4.3.    Issues for Discussion in Procedural Agreement             15

2.4.4     Substantive (Collective) Agreement                     18

2.4.5    Legal Enforcement of Collective Agreement                 18

2.5.     Collective Bargaining Process                         21

2.6    Parties Involved In Collective Bargaining                 23

2.7     The Functions and Objectives of Collective Bargaining         26

2.8     Benefits of Collective Bargaining                     27

2.9     Conditions for Successful Collective Bargaining             29

2.9.1     Pluralism and Freedom of Association                 30

2.9.2     Trade Union Recognition                         30

2.9.3    Observance of Agreement                         31

2.9.4    Support by Labor Administration Authorities             32

2.9.5    Good Faith                                     32

2.9.6    Proper Internal Communication                     33

2.10     Developing Negotiations Skills in Collective Bargaining         34

2.11     Current Trend in Collective                         42

2.12    Current Trend in Collective Bargaining In Nigeria             44

2.13     The Food, Beverage, and Tobacco Unions in Nigeria         45

2.13.1 Food Beverage and Tobacco Senior Staff Association (FOBTOB) 46

2.13.2 Association of Food Beverage and Tobacco Employers (AFBTE) 48

2.13.3 National Union of Food Beverage and Tobacco Employees    

(NUFBTE)                                     49

CHAPTER THREE

3.0    Research Methodology                             50   

3.1    Restatements of Research Questions and Hypothesis             52

3.1.0 Research Question                                 52

3.1.1    Hypothesis:                                     52

3.2    Research Design                                 53

3.3     Characteristics of the Study Population                 53

3.4     Data Collection Instrument                         54

3.5     Analytical Techniques/Statistical Treatment of Data         54

CHAPTER FOUR

4.0     Presentation and Analysis of Data                     57

4.1     Respondents' Characteristics and Classifications             57

4.2     Presentation and Analysis of Data According

To the Research Questions                         63

4.3     Hypotheses Testing                             72

4.4     Discussion                                     76

CHAPTER FIVE

5.0     Summary, Conclusion, and Recommendation             80

5.1     Summary                                     80

5.2    Conclusion                                     82

5.3    Recommendation                                 83

BIBLIOGRAPHY                                 85

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 constrained 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 owed 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 a 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 of 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 and employee 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 continued 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 the collective bargaining process is to reach an 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 sectors where the 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;

⦁    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.

⦁    Spurious request by the trade unions; not basing their demands on current economic realities.

⦁    Delay tactics in a bid to avoid negotiations by the management.

⦁    Management hiding under the guise of a national agreement to shy away from enterprise-level bargaining or vice visa as the case may be.

⦁    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.

⦁    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 the collective bargaining process and its 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;

I.    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.

II.    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.

III.    To establish if there exists any significant percentage change in wages over time between, the junior and senior staff over time as a result of collective bargaining.

IV.    To make policy recommendations 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 the collective bargaining process have 'on the 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 the 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 influenced by the bargaining power of unions and the 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 a wide range of alcoholic and non-alcoholic fruit drinks were 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 groups 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 the collective bargaining process on wage determination and the inherent bargaining power needed as it relates to skills/educational background to reach a collective agreement.

.

IMPACT OF COLLECTIVE BARGAINING PROCESS ON THE REMUNERATION OF WORKERS



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