# Regulatory Compliance Category > Labour Relations and Legislation Forum >  Advantages of collective bargaining for employer

## Dave A

What are the advantages of collective bargaining for an employer?
(I am being serious - I really want to know).

The only one that I can think of is where the nature of an industry is such that the Basic Conditions of Employment Act provides a significant obstacle to the adoption of a particular employment practice. In terms of the Labour Relations Act, a collective agreement may set terms in "contravention" of the BCEA - as long as it's agreed by both parties in a collective agreement.

But there are companies and industries which seem to willingly enter into collective agreements, even when this "benefit to employer" doesn't seem to be in play.
So what am I missing?
What other possible benefits for the employer might there be?

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## sterne.law@gmail.com

Even the sector employment practices does not require the collective bargaining route. Government can make a sectoral agreement to regulate an industry.

The main reasoning or thought process is to prevent proliferation of unions in the work place therefore a company need only deal with one union. Normally the other unions get shut out by setting a threshold. Some logic to that for the employer. Conversely if there is more than one union there will in all probability be no majority, which is not good for the union or employees.

It rolled along quite nicely but we've seen the downside of this in the mining industry. Employees may not like a union but are stuck and forced to join if they seek any say. The recent High Court victory about extending an agreement to non members looks to shake things up, and there is no doubt that it will come before Constitutional court.

Returning to the original question - the advantage only comes about where there is sense and logic, factors that are not very common in unions. There is some advantage where the agreements are negotiated on longer terms such as three years, with increases linked to a formula such CPI or some such objective measure, thus creating some stability, allowing for planning and only having the dreaded negotiations every 3 years. Worked well in the motor industry but now you have the unions wanting yearly negotiations.

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Dave A (12-Aug-13)

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## Dave A

> The recent High Court victory about extending an agreement to non members looks to shake things up, and there is no doubt that it will come before Constitutional court.


Any useful links to read up on that, Anthony?

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## Dave A

Oh, and this might interest you - unions / collective bargaining vs the right to work.

I got there looking for studies measuring the effects of collective bargaining on economic growth. Of course our local example might be the collapse of our textile industry, but some might suggest that the rise of imports from China was a significant contributor. So looking elsewhere...

Although the USA is not particularly regarded as a country with progressive labour legislation, the state-by-state nature of the country does produce some interesting diversity when it comes to labour legislation - and a study where the same article had this to say on the matter:




> There is evidence that right-to-work laws—or, more broadly, the pro-business policies offered by right-to-work states—matter for economic growth. In research published in 2000, economist Thomas Holmes of the University of Minnesota compared counties close to the border between states with and without right-to-work laws (thereby holding constant an array of factors related to geography and climate). He found that the cumulative growth of employment in manufacturing (the traditional area of union strength prior to the rise of public-employee unions) in the right-to-work states was 26 percentage points greater than that in the non-right-to-work states.


That's a pretty significant difference when you're trying to reduce unemployment.

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## Blurock

Collective bargaining serves to destroy jobs and is being used as a political toy, not for the benefit of the worker. 

How can we justify a worker in e.g. a small Free State town earning the same as a worker in Durban? Obviously there is more demand in the city and the level of education is generally higher. Is it fair to remunerate a lower skilled worker the same as a highly skilled one? The urban worker will also spend more on transport and accommodation than the rural one.

I am not in favour of collective bargaining as it will also demotivate the productive worker who earns the same as the unproductive one. I prefer merit as a measure as long as it is transparent and fair. That is often the problem in the workplace where employers will "milk the system" at the expense of the workers. 

I believe that if HR practitioners performed their jobs correctly, as more than just an extension of management, there may be no need for staff to join unions.

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## sterne.law@gmail.com

http://www.bdlive.co.za/national/lab...mum-wages-case

http://www.freemarketfoundation.com/labour-challenge

The court papers and some stats in support of the argument
http://www.freemarketfoundation.com/...papers%201.pdf

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Citizen X (13-Aug-13), Dave A (13-Aug-13)

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## Dave A

:Hmmm:  It would be handy if we could get an answer on the question "What is sufficiently representative" to extend a collective agreement to non-parties out of law rather than from the politicians. Great to see a case making progress down that road at last.

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## sterne.law@gmail.com

NEEASA the employers organisation of SEESA has also joined the action.
The 'standard' for sufficient representation in terms of concluding a collective agreement was 30 percent, but once that agreement was concluded a new threshold could be set within the agreement, hence the ability for an employer and union to shutout the other unions, a rather unhealthy situation, so much for free markets and fair competition.

On unions a rather interesting case is heading towards the constitutional court. Two union members were refused representation and sued the union, successfully in the High Court and upheld in the SCA.

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Citizen X (13-Aug-13), Dave A (13-Aug-13)

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## Dave A

> Returning to the original question - the advantage only comes about where there is sense and logic, factors that are not very common in unions.


Now that I've been a member of an employer representative organisation for close on a year now, I'm starting to think sense and logic might be in short supply right through the system. There's a culture in place, an absolute belief in collective bargaining being "good for the industry" somehow, that is akin to religion.

Start asking "why", start challenging the thinking and...
I've really had the most surreal discussions on this in the past few months.

Any news on that "extension to non-parties" case?

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## wynn

This argument doesn't affect me because I don't employ anyone, that is probably why I have come to it so late.

My question is if you have 100 employees and the threshold for unions is 30% and after achieving the threshold the union decides to call a strike, what happens to the other 70 non members? Do they not have the right to decide that it is not in their interest to strike, do they not have a say in weather to call a strike or not?

Sure the union has the right to represent members but if the majority of employees, even a minority has the right to not strike without being intimidated?
Only when the entire workforce are members and a significant majority (65%) vote for action can the union dictate that nobody works.

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## Justloadit

@wynn

This is the current problem at the mines, the majority of the miners want to work, but they are intimidated and prevented from working.

The situation is slowly coming to a head, where the companies will simply close because of the high cost to produce product, creating more unemployment.
But I suppose, change only takes place when one hits rock bottom. It seems that unions think that money simply rolls in the door because there is a business in place.

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## wynn

Still offers no advantage to the employers though.

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## sterne.law@gmail.com

http://www.gilesfiles.co.za/collecti...r-jr306211-lc/

http://www.gilesfiles.co.za/collecti...o-non-parties/

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Dave A (18-Apr-14)

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