Part II. The right to organize and collective bargaining

Chapter X. Promotion of collective bargaining

Introduction

235. Article 4 of Convention No. 98 provides that "Measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment by means of collective agreements". (Endnote 1) This provision contains two essential elements: action by the public authorities to promote collective bargaining, and the voluntary nature of negotiation, which implies autonomy of the parties.

236. More generally, the Committee would like to express concern at two trends occurring in certain industrialized countries in particular, which have a negative impact on collective rights and hence on collective bargaining. First, in several countries there has been a recent tendency for the legislature to give precedence to individual rights over collective rights in employment matters. Second, although often dictated by objective considerations, structural change may be used to undermine the trade unions if the necessary measures are not taken by the authorities. In particular, this problem could arise in the public or semi-public sectors, where privatization often results in the fragmentation of bargaining units, and therefore of collective bargaining itself.

Promotion of collective bargaining

237. In the vast majority of countries the right of workers to negotiate their conditions of employment through collective bargaining is recognized in law or in practice. However, national legislation promotes collective bargaining in varying degrees; the main difficulties arising in practice concern the recognition of trade unions for the purposes of collective bargaining and the establishment of machinery and procedures to facilitate bargaining. Furthermore, special problems arise concerning bargaining in the public service.

Recognition of trade unions for the purposes of collective bargaining

238. In some countries legislation stipulates that only registered trade unions may be recognized as bargaining agents. If in addition the conditions required for registration are excessive, the development of collective bargaining may be seriously impaired. (Endnote 2)

239. The recognition of one or more trade unions as partners in collective bargaining immediately raises the question of their representativity. During its discussion on Convention No. 98, the International Labour Conference referred to this question and to some extent accepted the distinction sometimes made between the various trade unions according to their degree of representativity. Furthermore, article 3, paragraph 5, of the Constitution of the ILO establishes the concept of most representative organizations. Thus, the mere fact that legislation draws a distinction between the most representative trade union organizations and other organizations is not, in itself, reason for criticism. However, such a distinction should not result in the most representative organizations being granted privileges which go beyond priority in representation for the purposes of collective bargaining, consultation by governments or the appointment of delegates to international bodies.

240. Recognition of a trade union for the purposes of collective bargaining is sometimes optional, (Endnote 3) in which case the public authority should encourage employers to recognize trade unions which can prove their representativity. Recognition may also be voluntary when provided for in a bipartite or tripartite agreement (Endnote 4) or where it constitutes a well-established practice. (Endnote 5) In many countries, however, the legislation establishes a system of "compulsory" recognition where the employer, under certain conditions, must recognize the existing trade union(s). The Committee considers that it is important in such cases for the determination of the trade union in question to be based on objective and pre-established criteria so as to avoid any opportunity for partiality or abuse. Furthermore, when national legislation provides for a compulsory procedure for recognizing unions as exclusive bargaining agents, certain safeguards should be attached, such as: (a) the certification to be made by an independent body; (b) the representative organization to be chosen by a majority vote of the employees in the unit concerned; (c) the right of an organization, which in a previous trade union election failed to secure a sufficiently large number of votes, to request a new election after a stipulated period; (d) the right of any new organization other than the certified organization to demand a new election after a reasonable period has elapsed.

241. Problems may arise when the law stipulates that a trade union must receive the support of 50 per cent of the members of a bargaining unit to be recognized as a bargaining agent: a majority union which fails to secure this absolute majority is thus denied the possibility of bargaining. The Committee considers that under such a system, if no union covers more than 50 per cent of the workers, collective bargaining rights should be granted to all the unions in this unit, at least on behalf of their own members. (Endnote 6)

242. In other countries legislation stipulates that workers may be represented by more than one trade union, even in enterprise-level bargaining, or grants exclusive bargaining rights for a specific category of workers to the union which represents a certain proportion or a relative majority of workers. Representativity may be determined by the number of members or by secret ballot. (Endnote 7) The Committee considers that, in order to encourage the harmonious development of collective bargaining and avoid disputes, it would be desirable to draw up and apply objective procedures which make it possible to determine the most representative trade unions for the purpose of collective bargaining when it is not clear which trade unions the workers would like to represent them.

243. The provisions governing the recognition of trade unions are also closely linked to the obligation to bargain, which in some legislation takes the form of the obligation on the parties to "negotiate in good faith", compliance with this requirement and its consequences usually being evaluated by specialized bodies. In several countries legislation makes the employer liable to sanctions if he refuses to recognize the representative trade union, (Endnote 8) an attitude which is sometimes considered as an unfair labour practice. The Committee recalls in this connection the importance which it attaches to the principle that employers and trade unions should negotiate in good faith and endeavour to reach an agreement, the more so in the public sector or essential services where trade unions are not allowed strike action. (Endnote 9)

Machinery and procedures to facilitate collective bargaining

244. National legislation on the subject varies considerably; furthermore, several countries have decided to establish different systems for the public and private sectors in order to take better account of the specific characteristics of the latter.

245. Several countries provide for the setting up of joint bodies (within the enterprise or the branch of activity, or at the central or interoccupational level) within which collective agreements must be, or usually are, concluded. (Endnote 10) When the conditions imposed by law for participation in these bodies are such that they prevent a trade union which would be the most representative of its branch of activity from being associated in the work of the said bodies, the principles of Convention are impaired. The Committee considers in this respect that the criteria established by the law should enable such organizations to bargain collectively. Other legislation provides for the setting up of specialized, permanent (Endnote 11) or ad hoc (Endnote 12) institutions whose purpose is to help promote collective bargaining by studying general problems, drawing up codes of good conduct and giving advice to the parties to help them solve particular problems they may encounter. The specific task - though not necessarily the only task - of these institutions is to promote collective bargaining.

246. Various rules and practices are designed to facilitate collective bargaining, such as mediation and conciliation procedures - whether compulsory or voluntary - the prohibition of certain practices likely to hinder the development of collective bargaining, such as unfair labour practices; (Endnote 13) provisions to facilitate access by the parties to certain information, (Endnote 14) and in particular the communication to workers' organizations of information on the economic situation of the bargaining unit, the enterprise or companies in the same sector. In the view of the Committee, in the latter case, when the objectivity of such economic information is reasonably guaranteed, provisions of this kind are particularly useful, since they enable the bargaining agents to make a realistic evaluation of the situation and prevent simple errors of appreciation or poor communication from bringing about an impasse in the bargaining.

247. Whatever the kind of machinery used, its first objective should be to encourage by all possible means free and voluntary collective bargaining between the parties, allowing them 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 a collective agreement. Experience shows that the mere intervention of a neutral, independent third party, in which the parties have confidence, is often enough to break a stalemate which the parties would be unable to resolve themselves. The provisions of the Collective Bargaining Convention, 1981 (No. 154) are particularly useful in this respect; the accompanying Recommendation (No. 163) also lists a series of specific means which can be used to promote collective bargaining. In addition, the Voluntary Conciliation and Arbitration Recommendation, 1951 (No. 92), mentions some of the essential characteristics of conciliation and arbitration machinery: the joint nature of such machinery; voluntary recourse to procedures, which should be free of charge and expeditious. However, paragraph 7 of this instrument clearly recalls that none of its provisions "may be interpreted as limiting, in any way whatsoever, the right to strike".

Voluntary collective bargaining; autonomy of the parties

248. The principle of voluntary negotiation of collective agreements, and thus the autonomy of the bargaining partners, is the second essential element of Article 4 of Convention No. 98. The existing machinery and procedures should be designed to facilitate bargaining between the two sides of industry, leaving them free to reach their own settlement. However, several difficulties arise in this respect, and an increasing number of countries restrict this freedom to various extents. The problems most frequently encountered concern unilateral decision as to the level of bargaining; the exclusion of certain matters from the scope of bargaining; making collective agreements subject to prior approval by the administrative or budgetary authorities; observance of criteria pre-established by the law, in particular as regards wages; and the unilateral imposition of working conditions.

Level of collective bargaining

249. As was pointed out in Chapter VII, the right to bargain collectively should also be granted to federations and confederations; any restriction or prohibition in this respect hinders the development of industrial relations and, in particular, prevents organizations with insufficient means from receiving assistance from higher-level organizations, which are in principle better equipped in terms of staff, funds and experience to succeed in such bargaining. On the other hand, legislation which makes it compulsory for collective bargaining to take place at a higher level (sector, branch of activity, etc.) also raises problems of compatibility with the Convention. The choice should normally be made by the partners themselves, since they are in the best position to decide the most appropriate bargaining level, including, if they so wish, by adopting a mixed system of framework agreements supplemented by local or enterprise-level agreements.

Restrictions on the scope of bargaining

250. In some countries the nature and scope of negotiable issues are regulated by legislation, which either prescribes the discussion of certain matters to ensure that the parties themselves reach their own settlement on the major problems affecting them (Endnote 15) or prohibits the discussion of certain matters for reasons of general interest or public policy. (Endnote 16) Other countries set aside certain topics for the legislative authority to regulate, for example by excluding from bargaining certain matters which are normally included in conditions of employment. (Endnote 17) The Committee considers that measures taken unilaterally by the authorities to restrict the scope of negotiable issues are often incompatible with the Convention; tripartite discussions for the preparation, on a voluntary basis, of guidelines for collective bargaining are a particularly appropriate method to resolve these difficulties.

Other interventions by the authorities

251. In some countries legislation stipulates that collective agreements between the parties must be submitted for approval to the administrative authority, the labour authorities or the labour tribunal before coming into force. Provisions of this kind are compatible with Convention No. 98, provided 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 by general labour legislation. On the other hand, if legislation allows the authorities full discretion to deny approval or stipulates that approval must be based on criteria such as compatibility with general or economic policy of the government or official directives on wages and conditions of employment, it in fact makes the entry into force of the collective or works agreement (Endnote 18) subject to prior approval, which is a violation of the principle of autonomy of the parties.

252. The discretionary power of the authorities to approve collective agreements is by its very spirit contrary to the principle of voluntary bargaining, but this does not mean that the public authorities may not establish machinery to encourage the parties to collective bargaining to take voluntary account of government social and economic policy considerations and the protection of the public interest. However, such machinery is not likely to be supported by the parties concerned if the objectives which the authorities would like to see recognized as being in the public interest are not first submitted for consultation to the parties at the appropriate level within an advisory body, for example in line with the provisions of the Consultation (Industrial and National Levels) Recommendation, 1960 (No. 113).

253. The public authorities could also envisage a procedure to draw the attention of the parties in certain cases to considerations of general interest that might call for further examination by them of proposed agreements, provided, however, that preference is always given to persuasion rather than coercion. Thus, rather than making the validity of collective agreements subject to administrative or judicial approval, it might be prescribed that any collective agreement submitted to the Ministry of Labour would normally enter into force within a reasonable period after being filed; if the public authority considers that the terms of the imposed agreement are clearly contrary to the economic policy objectives recognized as being in the public interest, the case could be submitted for advice and recommendation to an appropriate joint body, provided, however, that the final decision would rest with the parties.

Compulsory arbitration

254. Another frequent problem concerns legislation which makes provision for recourse to compulsory arbitration in the event of failure of collective bargaining. Stressing that the different circumstances of the private, public and semi-public sectors may call for some qualifications, (Endnote 19) the Committee considers it necessary to elaborate somewhat its views on the subject.

255. A distinction is usually made between two types of disputes: on the one hand rights disputes (sometimes also called grievances) which concern the application or the interpretation of a collective agreement (Endnote 20) and, on the other hand, interest disputes which relate to the establishment of a collective agreement or to the modification, through collective bargaining, of wages and other conditions of work contained in an existing collective agreement. Only the latter are dealt with here.

256. Some confusion arises at times as to the exact meaning of the term "compulsory arbitration". If that term refers to the compulsory effects of an arbitration procedure resorted to voluntarily by both parties, this does not raise difficulties in the Committee's opinion since parties should normally be deemed to accept to be bound by the decision of the arbitrator or arbitration board they have freely chosen. The real issue arises in practice in the case of compulsory arbitration which authorities may impose in an interest dispute at the request of one party, or at their own initiative.

257. As regards arbitration imposed by the authorities at the request of one party, the Committee considers that it is generally contrary to the principle of the voluntary negotiation of collective agreements established in Convention No. 98, and thus the autonomy of bargaining partners. An exception might however be made in the case of provisions which, for instance, allow workers' organizations to initiate such a procedure on their own, for the conclusion of a first collective agreement. As experience shows that first collective agreements are often one of the most difficult steps in establishing a sound bargaining relationship, these types of provisions may be said to be in the spirit of machinery and procedures which facilitate collective bargaining. (Endnote 21)

258. As regards arbitration imposed by the authorities at their own initiative, the Committee considers that it is difficult to reconcile such interventions with the principle of the voluntary nature of negotiation established in Article 4 of Convention No. 98. However, it has to recognize that there comes a time in bargaining where, after protracted and fruitless negotiations, the authorities might be justified to step in when it is obvious that the deadlock in bargaining will not be broken without some initiative on their part. In view of the wide variety of legal frameworks (completed through national case-law and practice) established in the various member States to address what constitutes one of the most difficult problems of industrial relations, the Committee would only give some general guidance in this respect and suggest a few principles that could be implemented through "measures adapted to national conditions", as contemplated in Article 4 of the Convention.

259. In the Committee's opinion, it would be highly advisable that the parties be given every opportunity to bargain collectively, during a sufficient period, with the help of independent facilitators (mediator, conciliator, etc.) and machinery and procedures designed with the foremost objective of facilitating collective bargaining. Based on the premise that a negotiated agreement, however unsatisfactory, is to be preferred to an imposed solution, the parties should always retain the option of returning voluntarily to the bargaining table, which implies that whatever disputes settlement mechanism is adopted should incorporate the possibility of suspending the compulsory arbitration process, if the parties want to resume negotiations.

Economic stabilization measures

260. In recent years, an increasing number of governments, believing that the national economic situation required stabilization measures, have taken steps to restrict or prevent the free fixing of wages by means of collective bargaining, in particular for public servants. The Committee must, however, recall that if, under an economic stabilization or structural adjustment policy, that is for imperative reasons of national economic interest, wage rates cannot be fixed freely by means of collective bargaining, these restrictions should be applied as an exceptional measure and only to the extent necessary, should not exceed a reasonable period and should be accompanied by adequate safeguards to protect effectively the standard of living of the workers concerned, in particular those who are likely to be the most affected. (Endnote 22)

Workers in the public and semi-public sectors (Endnote 23)

261. Bargaining in the public service has special characteristics which are found in various degrees in most countries. The first reason generally given is that the State has a twofold responsibility in this sphere, since it is both employer and the legislative authority; the sometimes difficult distinction between these two roles and the virtual contradictions between them may give rise to problems. Furthermore, the State's room to manoeuvre depends very much on receipts from taxation and it is ultimately responsible to the voters for the way in which it utilizes and manages these resources in its role as employer. Lastly, according to certain legal and even sociocultural traditions, the status of public servants is incompatible with the concept of collective bargaining or even the right to organize. (Endnote 24) Although the legislation in many countries guarantees the right of collective bargaining for public servants, (Endnote 25) in others it is expressly denied them. (Endnote 26)

262. The situation of the public service is specifically dealt with in the Labour Relations (Public Service) Convention, 1978 (No. 151), and Recommendation, 1978 (No. 159), in terms similar to those of Convention No. 98. Article 7 of Convention No. 151 does, however, allow some flexibility in the choice of methods of determining conditions of employment in the public service, since it envisages procedures enabling conditions of employment to be negotiated between the public authorities and the organizations concerned, or "such other methods as will allow representatives of public employees to participate in the determination of these matters". As already noted, while Article 6 of Convention No. 98 allows public servants engaged in the administration of the State to be excluded from its scope, other categories should enjoy the guarantees of the Convention and therefore be able to negotiate collectively their conditions of employment, including wages. (Endnote 27)

263. While the principle of autonomy of the parties to collective bargaining is valid as regards public servants covered by the Convention, the special characteristics of the public service described above require some flexibility in its application. Thus, in the view of the Committee, legislative provisions which allow Parliament or the competent budgetary authority to set upper and lower limits for wage negotiations or to establish an overall "budgetary package" within which the parties may negotiate monetary or standard-setting clauses (for example: reduction of working hours or other arrangements, varying wage increases according to levels of remuneration, fixing a timetable for readjustment provisions) or those which give the financial authorities the right to participate in collective bargaining alongside the direct employer are compatible with the Convention, provided they leave a significant role to collective bargaining. It is essential, however, that workers and their organizations be able to participate fully and meaningfully in designing this overall bargaining framework, which implies in particular that they must have access to all the financial, budgetary and other data enabling them to assess the situation on the basis of the facts. (Endnote 28)

264. This is not the case of legislative provisions which, on the grounds of the economic situation of a country, impose unilaterally, for example, a specific percentage increase and rule out any possibility of bargaining, in particular by prohibiting the exercise of means of pressure subject to the application of severe sanctions. The Committee is aware that collective bargaining in the public sector "... calls for verification of the available resources in the various public bodies or undertakings, that such resources are dependent upon state budgets and that the period of duration of collective agreements in the public sector does not always coincide with the duration of budgetary laws - a situation which can give rise to difficulties." (Endnote 29) The Committee therefore takes full account of the serious financial and budgetary difficulties facing governments, particularly during periods of prolonged and widespread economic stagnation. However, it considers that the authorities should give preference as far as possible to collective bargaining in determining the conditions of employment of public servants; where the circumstances rule this out, measures of this kind should be limited in time and protect the standard of living of the workers who are the most affected. In other words, a fair and reasonable compromise should be sought between the need to preserve as far as possible the autonomy of the parties to bargaining, on the one hand, and measures which must be taken by governments to overcome their budgetary difficulties, on the other.

265. The two essential elements of Article 4 of Convention No. 98 refer to action by the public authorities to promote bargaining between the social partners and the voluntary nature of such bargaining. In the view of the Committee, it would be contrary to the principles of Convention No. 98 to exclude from collective bargaining certain issues such as those relating to conditions of employment, to make a collective agreement subject to prior approval before it can enter into force, or to allow it to be cancelled on the grounds that it runs counter to the government's economic policy. The parties in interest disputes should be given every opportunity to bargain collectively, during a sufficient period, with the help of independent mediation or conciliation. The government should endeavour to convince the parties to have regard voluntarily in their negotiations to major economic and social policy considerations and the general interest invoked by the government. If, for compelling reasons of national economic interest, a government considers that the wage rates cannot be fixed freely by means of collective negotiations, such a restriction should be imposed as an exceptional measure and only to the extent necessary, without exceeding a reasonable period, and it should be accompanied by adequate safeguards to protect workers' living standards. In the case of negotiations in the public or semi-public sector, intervention by the authorities is compatible with the Convention in so far as it leaves a significant role to collective bargaining. Measures which unilaterally fix conditions of employment should be of an exceptional nature, be limited in time and include safeguards for the workers who are the most affected.

Endnotes

Endnote 2

Endnote 3

Endnote 4

Endnote 5

Endnote 6

Endnote 7

Endnote 8

Endnote 9

Endnote 10

Endnote 11

Endnote 12

Endnote 13

Endnote 14

Endnote 15

Endnote 16

Endnote 17

Endnote 18

Endnote 19

Endnote 20

Endnote 21

Endnote 22

Endnote 23

Endnote 24

Endnote 26

Endnote 27

Endnote 28

Endnote 29

Cross references
Constitution: Article 3
Constitution: Article 19
Constitution: Article 22
Constitution: Article 35
Conventions: C151 Labour Relations Public Service) Convention, 1978
Conventions: C154 Promotion of Collective Bargaining Convention, 1981
Recommendations:R092 Voluntary Conciliation and Arbitration Recommendation, 1951
Recommendations:R113 Consultation (Industrial and National Levels) Recommendation, 1960
Recommendations:R159 Labour Relations (Public Service) Recommendation, 1978
Recommendations:R163 Promotion of Collective Bargaining Recommendation, 1981
Survey reference:251994G03 General Survey 1994, para. 71-75
Survey reference:251994G05 General Survey 1994, para. 167