Employment Bargaining Research Articles

The potential impact of the Fair Work Amendment (Secure Jobs, Better Pay) Act 2022 on collective bargaining in Australia: Reviewing the new multi-employer bargaining provisions and other measures to promote bargaining

2022 was a year of major change in the legal framework for industrial relations in Australia. Newly elected in May 2022, the Albanese ALP Government immediately commenced an ambitious reform agenda for labour relations, convening a National Jobs and Skills Summit in September 2022, and shortly thereafter achieving the passage of the Fair Work Legislation Amendment ( Secure Jobs, Better Pay) Act 2022 (SJBP Act). One central aim of the SJBP Act was to address shortcomings in the legal framework for collective bargaining found in the Fair Work Act 2009 (FW Act), and to this end, the amendments introduced new provisions for multi-employer bargaining, made changes to the agreement approval provisions and changed the bargaining landscape around intractable disputes. This article examines key aspects of the SJBP Act impacting collective bargaining in Australia. In particular, we consider the new provisions for multi-employer bargaining in the ‘Single Interest Employer Bargaining’ stream along with amendments of the FW Act relating to the commencement of bargaining for single-enterprise agreements, agreement-making using small voting cohorts, the resolution of intractable bargaining disputes, applications to terminate enterprise agreements, and the sunsetting of the so-called ‘zombie’ agreements. This analysis of the new legal provisions is situated in the context of recent union campaigns and bargaining disputes at various Australian employers, enabling us to explain the rationale for the amendments and assess their practical utility and limitations.

Learning to signal graduate employability: an exploratory study of UK students’ experiences of online recruitment processes

ABSTRACT Graduate employment programmes offer university students the prospect of a reasonable salary and development opportunities. For employers, such programmes offer a talent pipeline and a means to identify future leaders. The psychological contract which develops during recruitment processes creates high expectations on both sides of the employment bargain. A corollary is that graduate programmes usually entail highly competitive, multi-stage selection processes, in which applicants must repeatedly demonstrate their employability in online psychometric tests and computerised activities before progressing to the final selection stage. Drawing on Foucauldian theories of governmentality, this study uses interviews (n = 17) and focus groups (n = 2) to explore how final-year students at a post-1992 English university navigate graduate recruitment processes, and learn to signal what they believe is employability. The article shows how students’ understanding of employability is formed not only through traditional channels such as university careers services or employer communications, but increasingly through third-party (and often commercial) ‘helper’ apps offering online test-practice sessions, templated careers advice, and other methods for gaming the recruitment process. These helper apps can have distorting effects, producing graduates focused on the performance rather than the substance of employability.

Structural Labor Rights

American labor law was designed to ensure equal bargaining power between workers and employers. But workers’ collective power against increasingly dominant employers has disintegrated. With union density at an abysmal 6.2 percent in the private sector—a level unequaled since the Great Depression— the vast majority of workers depend only on individual negotiations with employers to lift stagnant wages and ensure upward economic mobility. But decentralized, individual bargaining is not enough. Economists and legal scholars increasingly agree that, absent regulation to protect workers’ collective rights, labor markets naturally strengthen employers’ bargaining power over workers. Existing labor and antitrust law have failed to step in, leaving employers free to coordinate and consolidate labor-market power while constraining workers’ ability to do the same. The dissolution of workers’ collective rights has resulted in spiking income inequality: workers have suffered economy-wide wage stagnation and a declining share of the national income for decades. To resolve this crisis, some scholars have advocated for ambitious labor law reforms, like sector-wide bargaining, while others have turned to antitrust law to tackle employer power. While these proposals are vital, they overlook an existing opportunity already contained in the labor law that would avoid the political and doctrinal obstacles to such large-scale reforms. This Article argues for a “structural” approach to the labor law that revives and modernizes its equal bargaining power purpose through deploying innovative social scientific analysis. A “structural” approach is one that takes into account workers’ bargaining power relative to employers in determining the scope of substantive labor rights and in resolving disputes. Because employers’ current buyer power strengthens their ability to indefinitely hold out on worker demands in the employment bargain, the “structural” approach seeks to deploy social scientific tools to tailor the labor law’s provisions so that they resituate workers to a bargaining position from which they could equally hold out. This Article makes three key contributions. First, it documents the dispersion and misalignment of workers’ collective rights under current labor law, detailing the historical narrowing of workers’ collective rights to limited tactics by a small set of workers against highly protected individual enterprises and the concomitant rise of employer power (Part I). Second, it introduces and schematizes the wealth of social scientific literature relevant for evaluating the relative bargaining power of employers and employees (Part II). And finally, it offers concrete proposals for how to apply these social scientific tools and insights to three areas of the National Labor Relation Board’s adjudication and regulatory authority: the determination of “employer”/”employee” status, the determination of employees’ substantive rights under section 7 of the National Labor Relations Act (NLRA), and the determination of what counts as sanctionable unfair labor practices under section 8 of the NLRA (Part III).

Financial Resilience in Labor Negotiations

We investigate the use of financial resilience as a strategic tool in labor negotiations. In a dynamic model of employer-employee negotiations, low leverage and long-term maturity improve a firm's ability to withstand strikes. If employees suffer more from negotiations, this improved resilience strengthens the employer's bargaining position. Using data on union elections and policy changes, we find that firms increase (decrease) debt maturity in response to higher (lower) employees' bargaining power while keeping leverage unchanged. In contrast to previous studies, our findings indicate that firms respond to more powerful employees by increasing their financial resiliency to negotiations and strikes.

Bilateral Delegation in Duopoly Wage and Employment Bargaining

We study bilateral delegation in wage and employment bargaining between firms and unions in a Cournot duopoly. Incentive delegation creates frictions for each party between its objectives of within‐firm rent extraction and market/job stealing from the rival firm. The net effect is restraint in production, resulting in a larger bargaining pie. But each player's payoff will be inversely related to his bargaining power. We also show that if players are given a choice to delegate, they will not resort to delegation when their bargaining power is sufficiently high. This is in contrast to the scenarios commonly assumed in many models. Copyright © 2016 John Wiley & Sons, Ltd.

Psychological contract breach, organizational justice and emotional well-being

Purpose– Psychological contract breach, which represents instances when organizations fail to fulfil their side of the employment bargain, has been associated with salient concepts in strategic human resources management. The purpose of this paper is to investigate moderated mediated relationships involving breach, organizational (procedural and interactional) justice and emotional well-being.Design/methodology/approach– The study draws upon quantitative data collected by means of a questionnaire that was administered to 620 full-time technical and shop-floor employees in an automobile-parts company in Malta. The questionnaire included psychometrically validated scales on breach, justice and well-being.Findings– Breach partially mediated the relationship between justice and well-being while justice levels did not differentiate this mediating effect except for interactional justice. Finally, the interaction between procedural and interactional justice failed to explain the mediating role of breach over and above their single contributions although interactional justice seemed to make a bigger impact.Research limitations/implications– This study contributes towards a better understanding of the relationships between breach, justice and well-being. The major limitation is that because of its cross-sectional nature, causality cannot be inferred.Practical implications– Given that managing the employment relationship impacts on how people feel and hence perform, understanding how breach, justice and well-being are related, is strategically important to human resources management.Originality/value– To the authors’ knowledge, there is no previous research that links breach, justice and well-being in one study.

Bilateral delegation in wage and employment bargaining in monopoly

We study efficiency and distributional implications of bilateral delegation in wage and employment bargaining in monopoly. Delegation causes underproduction, and the bargaining pie severely contracts rendering mutual gains from delegation impossible. With an increase in the union’s bargaining power profit may perversely rise and the union’s utility may fall.

Coordinated employer bargaining and globalisation: a study of the men's clothing industry in Quebec, 1974–2012

AbstractThis article looks at the political economy of employer coordination of collective bargaining in the clothing or apparel manufacturing industry in Canada over three phases of globalisation: from the Multi‐Fiber Agreement in 1974 to the impact of the entry of China in the WTO. Although prevailing accounts emphasise the force of exogenous change and the likely decentralisation of bargaining structures and demise of bargaining coordination by employers, this case highlights how unions and employers sought to preserve their institutional model. We find that actor strategies and their interrelations are a central part of the explanation of this apparent institutional stability, despite the real force of economic, organisational and public policy factors. However, it is a dynamic stability in which change processes, reflecting shifting power relations, are leading to important shifts in the nature of employer coordination.

The Impact of Dubuque Packing Co. Upon the Collective Bargaining Practices of Attorneys and Their Clients

AFL-CIO funded-research that presents empirical results from a survey of a cohort of most prominent labor and union attorneys that establish a strong negative correlation between the National Labor Relations Board’s contraction of employer bargaining duties and their decisions to relocate work from union to non-union sites. The NLRB’s conclusion that plant relocation decisions can be made unilaterally by employers increases the likelihood that employers will relocate to save money spent on, inter alia, union wages and benefits. However, such a decision is contrary to the Congressional determination that national labor policy espouses and encourages collective bargaining.

The effect of employee stock ownership on wage and employment bargaining

When workers can bargain over wages and employment, standard insider–outsider models predict underemployment if the number of insiders is small and overemployment if the number of insiders is large. For instance, a union will restrict employment growth in an expanding firm and oppose layoffs in a contracting firm. This paper shows that employee stock ownership can solve both problems and that the necessary ownership share is often relatively small. The results are compared with related results in the literatures on profit-sharing and labor-managed firms. Journal of Comparative Economics 33 (3) (2005) 565–583.

The Effect of Employee Stock Ownership on Wage and Employment Bargaining

When workers can bargain over wages and employment, standard insider-outsider models predict underemployment if the number of insiders is small and overemployment if the number of insiders is large. For instance, a union will restrict employment growth in an expanding firm and oppose layoffs in a contracting firm. This paper shows that employee stock ownership can solve both problems and that the necessary ownership share is often relatively small. The results are compared with related results in the literatures on profit-sharing and labor-managed firms.

Currency devaluation in an open-shop union

This paper sets up an efficient wage–employment bargaining model embodying both styles of closed- and open-shop union in the context of an open economy. The paper's main purpose is to highlight the impacts of a domestic currency devaluation on the labor market and aggregate output. It is found that the effects of currency devaluation, in general, are not unequivocal. Particularly, owing to the influence of the membership effect, its impacts are crucially related to the operation style (closed shop or open shop) of the union.

On the Role of Regulation in Union - Employer Bargaining

AbstractThis paper provides some analysis of microeconomic criteria for the regulation of union - employer wage bargaining in the context of a decentralised wage determination system. Using a simple model, where the employer has monopoly power in the product market, it is shown that an efficient collusive bargain struck between union and employer will benefit the consumer. This result holds under quite weak assumptions about the objectives of the union. Under not unreasonable assumptions about the nature of union objectives, the collusive bargaining outcome will be better for the consumer them removing the monopoly power of the employer while the monopoly power of the union remains. The implication for wages policy is that rather than proscribe collusive bargaining between a union and an employer with monopoly power, regulation should assist such bargaining as there are social benefits.

“So, what's the deal?” the state of the psychological contract in a ‘new’ university

This article argues that there is a need to focus on, and have insight into, the nature of the psychological contract, or employment bargain, existing between senior managers and lecturers within the turbulent environment of a ‘new’ university in 1990s. The research discussed in this article analyses the changing nature of the contract through conversational analysis of interviews with senior managers and lecturers. It explores the understandings each group has of the contract and the subjective experience of work. The article concludes that there is a gap, between the two employee groups, in terms of the interpretation of the contract and the employment bargain. Effective management it is argued, must take account of the need for reciprocation and fit between perceptions of the work agenda.

Union–Firm Interaction and the Right to Manage

In the context of price‐setting oligopoly, this paper shows that there may be consensus in union–employer bargaining for limiting the scope of bargaining to determining wage levels and allowing the employer to act unilaterally when competing in the product market. A strategic commitment by each union–firm pair to a right‐to‐manage framework, rather than a participatory approach, may benefit the bargaining parties since this entails higher negotiated wage rates which, by dampening competition in the product market, may allow for an increase in the amount of surplus generated by the parties.

Corporate mergers and union wage premiums

Corporate mergers possibly enhance the labor negotiation advantage of employers. This study investigates the association between wage levels and merger activity to test the employer bargaining strength hypothesis. The results indicate significantly lower union wages as a consequence of merging. Merger activity, however, does not influence wage levels of non-union workers. These findings are supportive of the employer bargaining strength hypothesis.

Protecting the Employment Bargain

Protecting the Employment Bargain

A Bargaining Analysis of American Labor Law and the Search for Bargaining Equity and Industrial Peace

2. Employer Rents 428 3. Productivity Increases Associated with Employee Organization 431 B. Employer Responses to Union Wage Demands....... 434 1. The Employer Demand Curve Response ......... 434 2. The Employer Bargaining Response 436 C. The Costs of Collective Bargaining . ...... 440 1. The Costs of Collective Bargaining as Ordinary Transaction Costs 440

Tests of alternative wage employment bargaining models with an application to the UK aggregate labour market

In this paper we propose a test that discriminates among alternative models of bargaining for wages and employment. The test rests on a theoretical framework which encompasses both the labour demand and the efficient bargain models of wage and employment determination. It is based on testing the cross equation restrictions implied for the coefficients of union power variables in reduced form wage and employment equations. The test is illustrated for the Layard and Nickell model of the aggregate UK labour market, for which it is found that one can reject both the labour demand model and the hypothesis that wage employment bargains are efficient, in favour of a generalised model of inefficient bargaining for wages and employment.

Single employer bargaining: structures and strategies

This article argues that managerial control over industrial relations is becoming more centralised. Managers are deliberately following a strategy which balances elements of centralisation and decentralisation. There are implications both for management and for the future study of single employer bargaining.