IMPACT OF COLLECTIVE BARGAINING PROCESS ON THE REMUNERATION OF WORKERS

ABSTRACT

The study focuses on the impact of 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. 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

Acknowledgement                                                                                                    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 the Study                                                                                        5

1.7       Significance of the 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 constraints 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 owned 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 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 or 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 continuous 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 collective bargaining process is to reach 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 sector where 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 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 collective bargaining process and it 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 overtime between, the junior and senior staff over time as result of collective bargaining.

  IV.            To make policy recommendation 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 collective bargaining process has 'on 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 collective bargaining process on motivation and productivity (bottom line)?

1.5.i                   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 influence by the bargaining power of union and 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 wide range of alcoholic and non-alcoholic fruit drinks was 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 group 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.