The term ‘collective bargaining’ is over a hundred years old and by no means a new concept locally or abroad. This term was first used by Beatrice Webb, a British economist and labour historian. To date, collective bargaining has been regarded as one of the most important functions of a trade union on behalf of its members and itself. Collective bargaining is however used for other purposes by employers and businesses whereby employers seek to ‘level the playing field’ between themselves with uniform wage schedules, working conditions and benefits that are attributed to labour. The idea here is to enable businesses to compete on equal footing when it gets to the labour cost of its operations. Mediation, arbitration, strike and lock-out actions can also be part of the process.

Due to global economic downturn, businesses have suffered increasingly to keep their doors open, whereby many businesses had to restructure their operations which gave rise to retrenching their employees, apply for business rescue and even business closures. We believe that the time of ‘one-way’ negotiations whereby only unions have demands are over. If businesses in established and regulated industries are to survive the new economic norms, they will have to proactively engage with unions and bargaining councils with their own set of demands in order to claw back economic stability. This will give rise to a severely robust new way of negotiations. Unions to date, are usually the only party that brings their demands to negotiations where organised employers merely responded thereto.

However, rising material costs and operational overhead costs were not historically bargained with third parties such as suppliers, service providers and State-Owned Enterprises (SOEs). In turn, collective bargaining naturally created labour peace, stability and surety within an industry as collective agreements are cyclical.

However this is on the brink of change as employers now seek to proactively negotiate their own demands with trade unions on the cost of labour, but also now seek to collectively negotiate with third parties having a mutual interest in a specific industry that are suppliers and service providers, i.e. SOEs. The challenge here is that the current legal framework of collective bargaining does not allow for that tier of negotiations to currently take place.

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