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Relationships and Arithmetic
Bring in the lawyers
Historically, lawyers were prohibited from participating in conciliation councils where collective agreements were negotiated. The prohibition no longer exists, and today, more lawyers are involved in collective bargaining. However, the original fear that lawyers would make negotiations too legalistic has only partly abated. The role is often limited to providing an opinion by phone or letter or to acting as a distant advisor to HR managers or a union advocate. While the parties have confidence in the lawyer’s advice, only a limited number of lawyers sit at the collective bargaining table and conduct negotiations on behalf of the employer or union.
My own hypothesis is that the approach taken in collective bargaining correlates more highly with personality types than with vocations and/or qualifications. Success is directly related to previous upfront experience with collective bargaining and ability to handle the practical problems that are unique to the interaction of groups of people joined for the purpose of negotiating collective agreements. The following brief observations may assist lawyers to understand and carry out certain practical aspects of collective bargaining.
Laws and outlaws
In collective bargaining, a client’s expectations extend to your giving more than legal advice. The lawyers’ views will be sought on matters not pertaining to the law. Increasingly, lawyers are being engaged as advocates who sit at the bargaining table, formulate bargaining strategies and take leadership roles as spokespeople for the bargaining team. As advocates, their functions are in part “legal” in the sense of requiring knowledge and giving advice on labour law. There are also a number of extra legal functions that are performed. The lawyer leaves her office on Queen Street, drives to the outback, and arrives at Possum Patch District Council’s chambers. The lawyer loses both geographical and psycho-social space. The lawyer joins the human process. You not only lead a team, but you are part of a bargaining team. You have a say in what constitutes the client’s opening position, and they have say in what and when you have breakfast. You become part of a band of “outlaws” in the sense of camaraderie and become an integral part of a process that, for the most part, has little or nothing to do with the law.
This paper deals with relationships and arithmetic, and hopefully provides some practical advice on some of the extra legal functions that are essential to a lawyer’s contribution to collective bargaining.
Let’s begin with arithmetic
We begin with arithmetic – in particular, percentages. Wage movements in collective bargaining are most often expressed as percentages, and advocates must understand how to calculate and communicate the results of these calculations to the bargaining parties.
I have, from long experience, reached the view that there are a number of highly educated, qualified and competent lawyers who do not know how to use percentages. I need to get the parties to look at complex problems of communication arising over percentage wage increases, but key players on the bargaining team can’t calculate percentages. More aptly put, they can all – with great confidence – calculate percentages, but they all get different answers. How do I talk about this problem without talking down to those who know and without embarrassing those who don’t?
Clearly communicating a proposal about wage increases is far more difficult than learning the maths required to calculate the proposal. Both calculations and communications are improved if we share the same calculator and use the same formula for calculating percentage increases.
You and everyone else will understand that increasing 100 by 1 percent will equal 101. One is, by definition, 1 percent of 100. Increasing 100 by 4 percent will equal 104. Increasing 100 by 8 percent will equal 108. Increasing 100 by 6 percent will equal 106. While renegotiating the Possum Patch District Collective Agreement, the parties propose increases to wages and allowances by 4 percent, then 8 percent, and finally 6 percent is agreed on as a compromise.
There is a $100 per year possum allowance paid to possum exterminators. The salary paid to possum exterminators is $66,666.
One hundred is like any other number. A formula for increasing 100 by 4 percent will be the same formula for increasing 1,000 by 4 percent, or $66,666 by 4 percent. If you can apply the formula to 100, you can apply the formula to any number you want. Dividing and multiplying are opposite operations. Divide the answer by the same number you have just multiplied by and you get the original number. Divide 104 by 100, and you get 1.04. Multiply 100 by 1.04, and you get 104. Multiply 1.04 by any number and the number is increased by 4 percent.
Arithmetic World Wonder No. 1: Multiply by 1.0? to increase any number by ?percent.
Let’s deal with relationships
Dorothy Doolan, union delegate and mother of six, is known as Dorothy “Sign on the Dotted Line” Doolan, shortened to the nickname Dottie. Her husband, her children and the union members love her. Those emotions are not shared by those who struggle to manage the Possum Patch District Council.
In other local authorities, negotiations are sometimes dominated by concerns about the employer’s operating revenue and expenses, balancing budgets, restraining rate increases, and profit and loss of the local body’s subsidiary companies. That is not the case at Possum Patch. Dottie requires equal attention to be given to the Consumer Price Index (CPI), which is the profit and loss statement for her family. If she does not get at least the movement in the cost of living, then she is running at a loss.
The collective bargaining table and the family dinner table provide a common focus on both her shopping list and the employer’s operating costs and revenue accounts. The “basket” of goods and services measured by the CPI is, in an important sense, her family’s shopping basket.
A labour lawyer needs to know about the CPI and how movements in the CPI are calculated. The lawyer also needs to know how to operate her pocket calculator and to know the difference between Weetbix, and Vogel’s Select Café-Style Luxury Muesli. If the lawyer doesn’t understand and empathise, then Dottie will read your mind, and you won’t have to read her lips. She has the fastest calculator and sharpest tongue in the West (West Coast of New Zealand). As a point of deeply held principle, she does not like Queen Street lawyers, and she is about to look you up and down.
Pull out your pocket calculator. Type in 1.04, push x twice and, ah, the secret of life. You now have 1.04 as a constant. Type any number and =, and you directly get an increase in the number by 4 percent. Try this:
Type 1.04, type xx, type 40,000=, type 50,000=, and so on.
Arithmetic World Wonder No. 2: Type x twice and the preceding number 1.0? becomes a constant for increasing numbers by ? percent.
If you don’t follow this tip, then you have to multiply each wage rate by .04, and then add the answer to the wage rate, and then do the same operation for the second number, and so on. That takes you longer, but more importantly, you appear dopey to those in the know, to the critical observer, Dottie. She knows you are a three-stepper rather than a one-stepper.
As a lawyer in collective bargaining, you will be under scrutiny. If you calculate wage percentages in three steps and without the use of a constant, then it is unlikely that you have any experience in wage bargaining, because you will not have had experience in increasing series of wage rates by a percent, a necessary task in collective bargaining. That undermines the perception of your overall competence and your ability to exert leadership during collective negotiations.
If you can’t do these calculations quickly and efficiently on Friday night, how do you add up the cost of groceries on your shopping list while shopping at PAK’n SAVE? Maybe you don’t shop at PAK’n SAVE and/or maybe you don’t have to have a shopping list at all – a point that will cross Dottie’s mind during the debate on the CPI. Remember that the analogy between the council’s operating revenue and expenditure and the CPI is powerful and that Dottie’s arguments are upfront and personal.
Negotiating style
As a lawyer, you may be engaged to provide an aggressive edge to negotiations with a view to dominating the proceedings – the lawyer as the muscle. Alternatively, the lawyer may be asked to provide balance or protection against an opposing advocate or bargaining team that is perceived to be destructive or dominant in their approach. You may be hired to block rather than punch. The question of aggression and passivity is, however, complicated. Unbridled aggression and roll-over passivity are at the opposite ends of a continuum, and a good advocate knows how to do both Taekwondo and Tai Chi – on occasion, both at the same time. Good negotiating style is a question of timing, degree and change of pace. Aggression as a controlled, purposeful and symbolic strike does, from time to time, establish a necessary balance in the exchange of argument across the bargaining table. Against this, passive aggression is a devastating response to an insulting and/or disordered presentation by the other bargaining team.
At the bargaining table, what is not said is generally more important than what is said, and the fact that you don’t say it is more important than its simple absence from the dialogue. Silence is a heavy blow.
Sparring not fighting
In the dramaturgical context of collective bargaining, experienced advocates do not fight but “spar”. There is a delicate blend of aggression, mutual protection and concession. Aggression is temporarily cathartic in the first act, but both parties will desire a happy ending in the third act. How they get there will depend in part on the parties’ substantive differences (i.e. 4 percent versus 8 percent). The other major factor will be your relationship with the other advocate. Both sets of clients will, in the third and final act, remember they are paying you to find a solution and expect you to find that solution. You will need assistance. Negotiations involve a sparring partner rather than a boxing opponent.
Collective bargaining is dramaturgical not only because it involves ritual, but also because collective bargaining requires influencing, persuading and entertaining audiences. Certainly, many lawyers are used to and practised at the “cut and thrust” that arises out of an adversarial system, but there is a key difference between the adversarial system and collective bargaining. In collective bargaining, there is no judge to keep order; to the contrary, negotiations are often disorderly. You may be dealing with bargaining teams with not much more order than an angry crowd. Your long-term responsibility is to sell a deal to the other bargaining team. Your short-term responsibility may be to persuade a crowd as to the sensibility of orderly procedures. Most importantly in collective bargaining, the lawyer is not making submissions to a judge who will decide, but persuading a group – literally an “audience” to accept a proposition. The lawyer’s language and tone should suit that purpose, and often the most successful approach is like leading a discussion amongst your peers. The court may be the lawyer’s own territory, but collective bargaining is the union’s own natural habitat.
Shreds of paper shrapnel
Let’s again focus on what is superficially a mundane exchange but has powerful effect. I have been involved in some highly informal and ineffective negotiations where an offer has been made on a scrap of paper shoved over the table from one advocate to another advocate. If not set out carefully, the other advocate can read the proposal in a number of ways. On adjourning for private deliberations, the advocate then explains the offer verbally to his seven-member team who then write down their version of the proposal, which has already been misunderstood by the advocate. The advocate then endeavours to get a unanimous approach to the opposing side’s proposal, which he does not understand and has inaccurately conveyed to his bargaining team. A misinterpreted proposal is then reinterpreted in seven different ways.
In a mature bargaining relationship, the advocates will have agreed on a format for conveying proposals and counter proposals. Communication chaos can be avoided by a carefully designed proposal written so as to be unambiguous. Don’t change the format unnecessarily; this requires the group to recalibrate with each change of format. Change 1.04 to 1.06, not the rows into columns and the columns into rows. Eight copies are prepared and distributed to the advocate and seven members of the opposing bargaining team. They all get the same copy, with the same rows, the same columns, the same percentages. This removes misunderstandings related to handwriting defects, effects of percentage movements described differently and perceptual distortions created by the multi-directional passing-on of information.
Bargaining historian
I often observe that an accountant or wages administrator will join the bargaining team. They carefully record each offer and counter offer and will calculate the cost effect on an Excel spreadsheet. The accountant or wage administrator becomes, in effect, the “bargaining historian” and has at hand the facts of negotiations. While on the surface, these appear to be low-level clerical tasks, when carried out competently and exclusively by the “bargaining historian”, the tasks attach significant power to the accountant or administrator.
If you wish to take control of the conduct of negotiations, as distinguished from the outcome, which is over to your client, my advice is to take charge of the record-keeping and basic costing of proposals and counter proposals. Prior to negotiations, arrange with your client to either prepare or help you prepare a spreadsheet to cost proposals and counter proposals. Ideally, there will be an assistant to help record offers and counter offers, but you need to have a close relationship with that assistant. You need to be directly involved in input and output and to be on top and ahead of the issues.
In addition, proposals and counter proposals need to follow an agreed and understandable format. Ideally, there should be a shared format and a formula for calculating, communicating and identifying the differences in the parties’ positions. This is a question that should be raised in reaching the pre-bargaining process agreement or as a practice agreed between advocates. The confusion that is subsequently discussed can be avoided by combining in the offer the following principles: percentages and steps; the calculations pertaining to key wage classifications; the present wage rates: and the new wage rates. A written proposal should also make clear the extent to which the proposal replaces all previous offers or undertakings, written and verbal, and represents in full the employer’s or union’s position. The proposal needs to make clear whether it is made contingent on the acceptance of all elements of the proposal and, if so, emphasise that the proposal is a “package” deal (see offer set out below).
Prepare a copy for the other advocate and each of the members of their bargaining team. Keep the layout on a template, and make that template available to go on the other bargaining team’s laptop. The bargaining team then uses the template to prepare a counter proposal. At the very least, the other bargaining team should design a written counter proposal that can be read against the template. In some of the more successful negotiations, the parties have agreed on a single person adept at word-processing and Excel to prepare proposals and counter proposals that can be understood, and understood against one another. In one negotiation, certain offers were committed with agreement by both parties to PowerPoint and presented to a stop-work meeting for debate and ratification. These arrangements depend on your establishing a genuine relationship with the other advocate.
Here is an example of how it shouldn’t be done, the negotiations between the Possum Patch District Council and the Union of Possum Patch District Workers (UPPDW).
Opening positions
The union claims an 8 percent increase for one year. The increase is to be on all wages and allowances. There are to be other changes in the collective agreement. The wage increase operative date will be 1 July 2008. The term of the agreement is to commence on 1 July 2008 and expire on 30 June 2010. The previous agreement expired on 30 June 2008. Management comes to the bargaining table and agrees with the proposal, with one exception. Wages and allowances are to be increased by 4 percent.
| |
Council |
Union |
| Wage increase |
4% |
8% |
| Term |
12 months |
12 months |
| Commencing date |
1 July 2008 |
1 July 2008 |
| Wages operative date |
1 July 2008 |
1 July 2008 |
| Expiry date |
30 June 2009 |
30 June 2009 |
| Term |
12 months |
12 months |
The parties are negotiating in June, prior to the expiry of the old agreement. Backdating is not an issue at this stage. From the onset, management says they do not want to horse trade and have a prolonged bargaining session. Their proposal is their top figure. They explain that they are constrained by the Local Government Act to pay no more than 4 percent as budgeted. That is their first counter proposal and also their last offer. The annual plan has already been adopted by council. The budget has been incorporated in the annual plan. The annual plan and its budget have been formally adopted by a unanimous vote of council and therefore are set in legal concrete.
The opening positions are apart by 4 percent over the first 12 months. Opening positions are often derived from political tensions within the bargaining teams, rather than derived from economic argument or bargaining power realities. Had the union asked for 20 percent, or the employers proposed a wage pause, more would have been revealed about the state of mind of the bargaining team than the validity of any arguments about wage increases. At the very least, Possum Patch advocates are being influenced by a realist (Dottie) and know the power realities mean that the parties are going to settle somewhere between 4 and 6 percent. The advocates will not have colluded prior to negotiations, but discussed what is possible and realistic.
The experienced lawyer will foster realistic expectations both in the opposing and in their own bargaining team. Support for unreasonable and unobtainable bargaining objectives always receives an early and favourable response from your bargaining team, but is the plank from which the unsuspecting lawyer will fall off. Set your bargaining team’s expectations unreasonably low. Expect the worst, achieve the best you can. You will receive the unwarranted perception as being an over-achiever. If the team achieves more than they have been conditioned to expect, then the lawyer may be re-engaged for the next renewal of the agreement.
Penelope and Dorothy
After an adjournment, the union insists that the council is not bargaining in good faith. Dottie talks over and interrupts her own lawyer. “The council has made their first offer, their final offer, but this is their first final offer.” The lawyer for the council looks uncomfortable. As she speaks, Dottie holds out the palm of her left hand, and the gesture holds the lawyer off balance. “That is not good faith bargaining. A vote of council does not determine our wage increase. The employer is not the arbitrator in this dispute with the union.” The lawyer nods. Paid by the council, but deep in her most private mind, she is no longer sure whose side she is on.
Dottie follows with a short, sharp convincing lecture on deficit financing under the Local Government Act. The lecture has been well practised. The collective agreement has, for years, expired in June, following two months on from public consultation, bitter budget debate and adoption. The council has never had, but always found, enough money to pay for wage increases that exceed the budget. The union threatens to withdraw from the negotiations and refer the issue of good faith to a stop-work meeting. Under pressure, the council representatives ask for an adjournment. Representatives straggle off to separate adjournment rooms. Later, the lawyer and Dottie bump in to each other in the corridor In the breath of a quiet introduction, the Queen Street lawyer and Dottie become Penelope and Dorothy, and the dispute moves inexorably toward resolution.
Impasse 1
The council representatives return to the table and make a counter proposal. Their new proposal is tabled in writing. Putting the proposal in writing is a means to clarify the offer, but the assumption that the written word automatically clarifies the issue is often faulty. How the offer is written, its simplicity and persuasiveness, what words are used and how the numbers are placed are critical, minor matters that precipitate major misunderstandings. Here is what the council put in writing:
Council 2nd offer |
4% 12 months |
4% 12 months |
The lawyer for the council has done the maths correctly, but not the communications. Does the written proposal mean that the council is offering 4 percent for 24 months? Does the second 4 percent following from the first 4 percent mean that wages are held to the initial 4 percent?
The proposal had been explained and put in writing after lunch at 1:15 pm. The prevailing perception of the union’s bargaining team was that the 4 percent, and 4 percent, meant that the council had offered 4 percent for 24 months. Feelings were hostile. The council had not only refused to budge on its first 4 percent offer, but had such a “stick it to the union attitude” that the first unacceptable offer was extended for a further year. “Here’s 4 percent for this year. If you don’t like it this year, we won’t bother to increase your wages next year,” said Jack Daniels, the possum exterminators’ representative on the bargaining team.
By 2:15 pm, negotiations had almost broken down in disarray when an adjournment was sought by the council representatives in order to clarify their position. The council’s intent was that the offer was for 4 percent for 12 months, and an additional 4 percent for the next 12 months. The point needed clarification, and the council rewrote the proposition, which was put under the closed door of the union’s adjournment room. The confrontation had been more dramatic than in past negotiations and the thickness of the heavy rimu door gave Penelope, the lawyer for the council, some comfort.
Council 2nd offer |
4% 12 months |
8% 12 months |
Jack treated the offer not with relief, but joy. He would gladly wait 12 months on 4 percent for a full 12 percent. His perception was that the council’s communications firmly established that they were offering 4 percent for the first 12 months and 12 percent (4 + 8 = 12) for the second 12 months. Jack then left the rest of his bargaining team to tidy up. Dottie Doolan was not so sanguine and sighed under her breath, “Unlikely the council would ever be that generous.” However, Dottie knew to let the balloon of expectation expand. Ultimately, the council would not want it to burst. The disappointment would provide the energy, and the anger, to propel the negotiations forward.
Problems compounded
If the offer was put so as to identify how the additional increase in the second step was calculated, then the misunderstanding might have been avoided. In order to quell a riot, Penelope rewrites the council’s proposal and asks that the union’s bargaining team reconsider.
Council 2nd offer |
4% 12 months |
8% (4 + 4 = 8%) 12 months |
But this proposal created a further misunderstanding. The error is not in communication, but mathematics. The precise calculation is not 4 percent plus 4 percent – 4 percent and 4 percent are not added but compounded. Compounding provides an amount slightly more than 8 percent. The rate is increased by 4 percent in the first year, and then in second year the original rate is again increased by 4 percent. But the amount of the first 4 percent increase (difference between 104 and 100) is also increased by 4 percent.
100 + 4% = 100*1.04 = 104
104 + 4% = 104*1.04 = 1.0816
The difference is $96 a year, which is mathematically insignificant (you can’t even buy eight packets of cigarettes per year) but an irregularity that has caused two hours of intense debate and suspicion right at the point where the parties should be nudging the nexus of a settlement. Just when the group focus should be on splitting the difference between 4 percent and 8 percent, and 12 and 24 months, certain union members are arguing about why the management is short-changing them in the second year of the proposal. The reason that they know they have been short changed is Dottie Doolan’s calculations and her profound understanding of percentages. She has an even more profound understanding of human nature.
Late night mind slippage
The bargaining team members have had no dinner and are locked in this hot debate at 10:45 pm. They have now come to understand that the council has offered them not another 4 percent for the second year, but $96 per month. This incorrect and illogical conclusion is described as a group mind slippage. The figure has slipped in their tired minds from $96 a year to $96 a month. The exact terms of the increase became confounded in a argument about not smoking in the council’s adjournment room, which became confounded in an argument about cutting down on the number of packets of cigarettes smoked per week, which in turn came down to a discussion about the cost of smoking a packet of cigarettes a week. A pack of Holiday cigarettes costs $12.50 but you won’t die of cancer – the pack says “Cigarettes cause heart attacks”. Tired laughter accompanies the mind slippage. Four packets a month costs $100 – $1,200 a year. That is the amount that the council has tried to pick from the pockets of Possum Patch union members. If you are finding the argument and my writing difficult to follow, then I have achieved my intention. That feeling of tired confusion characterises the thinking of union members late at night on 30 June 2008 – the night before their collective agreement expires.
The matter would have been perhaps easily cleared up if it hadn’t been for Jack’s return with several mates from the Possum Patch Pub with a bottle of Jack Daniels, several jars and a crate of Lindauer. The invitation to the council representatives to join in the celebration of their 12 percent increase was well received, and the party went well for the first 10 minutes… when the mood changed. There was something about the atmosphere of these celebrations that suggested that they might need a mediator more than another drink. It is now just after midnight. A strike seems a restful alternative to the possum exterminators.
Breakdown
And so, as mediator, I paid a visit to Possum Patch, and this is my view of the dispute. The employer’s proposal had a number of attractive aspects, which have not been perceived by the union bargaining team. The reason that the positives have not been grasped is that the mind of the bargaining team was confused, hostile and unreceptive. The third effort to clarify was made at 10:45 pm, when the team was tired and hungry and in no state to objectively consider a proposal. My suggestion to the parties was that the proposal be rewritten and presented in the format suggested below.
In deference to the proposal, I made the following points to the union bargaining team. The 4 percent offer in respect to the first year is not an increase on their previous position, but the increase in the term from one year to two years puts forward another aspect of the negotiations with a potential for compromise. The union argued that the 4 percent in the first counter proposal was not good enough for the first year. This is a repeat of the offer for the first year, but not an extension of the offer into the second year. There is a second wage increase in the second year. Beyond the fact that the union has misread the offer in respect to the second year, there is a reason to study the proposal more closely.
The offer has been shaped in a way that suggests that the offer means something other than its mathematics. The shape of the offer sends a signal. Eight percent is the number shared in both the union and council’s proposals. The council has not included the number 8 by accident in its counter proposal. The council’s 8 percent for the second year is a year too late, which says that they will not concede the union’s claim of 8 percent in the first year, but the fact that they have proposed the union’s number 8 is a signal that they will genuinely listen to the union’s argument for a further increase in wages beyond their proposed 4 percent. This is a double-edged signal. The council will offer significantly more if the union will look at a two-year agreement.
PRINCIPLES
The following is the employer’s offer:
- 2-year term – 1 July 2008 to 30 June 2010
- All wages and allowances increased in two steps:
4% – 1 July 2008 to 30 June 2009
4 + 4 = 8% – 1 July 2009 to 30 June 2010
4%/8% are compounded – 1.04 x 1.04 = 1.0816 (4% + 4% = 8%)
SALARIES
| Council |
Present rates
per annum |
Multiply by 1.04 |
4%
12 mths
per annum |
Multiply
by
1.0816 |
8%
12 mths
per annum |
| Possum exterminators |
120,000 |
1.04 |
124,800 |
1.0816 |
129,793 |
| Labour |
100,000 |
1.04 |
104,000 |
1.0816 |
108,160 |
| Gardener |
80,000 |
1.04 |
83,200 |
1.0816 |
86,529 |
| Tractor driver |
79,933 |
1.04 |
83,130 |
1.0816 |
86,456 |
| Economic modeller |
33,338 |
1.04 |
34,671 |
1.0816 |
36,059 |
| CEO |
25,000 |
1.04 |
26,000 |
1.0816 |
27,040 |
ALLOWANCES
| Possum handling allowance |
$100 per annum |
1.04 |
$104
per annum |
1.0816 |
$108.16
per annum |
This offer is made on the contingency that the union accepts that there be no other alterations to the present collective agreement with the exceptions of being (1) wages (2) allowances and (3) the term. The union accepts that these changes comprise the complete package offered in full and final settlement of all matters in the dispute.
SIGNED
Penelope Paine
LLB/Lawyer/Advocate
10:30 am, 1 July 2008
Possum Patch District Council
Breakthrough
On return to the bargaining table, the council then offers its third counter proposal. The counter proposal is 6 percent for a two-year term, the single increase coming into effect 1 July 2008. The collective agreement is to expire on 30 June 2010.
| Council position |
6%
12 months |
6%
12 months |
| Council’s previous position |
4%
12 months |
8%
12 months |
Again, a brief digression. The amount of money over 24 months is the same (4 + 8 = 6 + 6). The 6 percent means that you pay 2 percent more in the first 12 months and 2 percent less in the second 12 months. Because there is an even number of months in each step, the conclusion is intuitive – 4 + 8 = 12/2 = 6, the same as 6 + 6 = 12/2.
After receiving the proposal, the union seeks an adjournment, and the negotiators lock into a hot debate as to what the next move is. They vote 4 to 3 against recommending a strike and 4 to 3 to make a counter proposal. Dottie understands that they have not increased the overall expenditure on wages but sees a way forward. Unanimous agreement is reached to accept the 6 percent, but for a period of 18 months rather than two years. The union returns to the table and says that they will put a compromise to the membership – 6 percent for 18 months. The team has reservations, and some doubt that it will be acceptable.
The council negotiators are divided but finally agree to 6 percent for 18 months provided that the union bargaining team recommends the settlement. The union bargaining team withdraws the reservations about the offer. The union organises a stop-work meeting, and management negotiators meet with the councillors to explain why they conceded the 18 months. The union members and the councillors hear the pros and cons of the settlement at two separate meetings – one in the council chambers and the other in the Town Hall.
Selling the deal
The course of the above negotiations has travelled from the opening positions through the two impasses, and arriving at the compromise settlement. Discussions have been impeded by the mathematics, and despite their simplicity, communication difficulties have surrounded the mathematical calculation and shared understanding of percentage increases and movements. These difficulties are a recurrent cause of losses of time and trust and are a main source of hostility in collective bargaining. The difficulties will be magnified at ratification meetings where the hopeful compromise is on sale. Lawyers need to discuss the design of the presentation made to their respective clients. There will be a mutual interest in selling the deal to both parties.
The 6 percent is easier to sell to the union ratification meeting. The union will say that the council had offered 4 percent for 12 months. “We got 6 percent for 18 months instead of 4 percent for 12 months. We got 2 percent extra for the 12 months (6 – 4 = 2). For the extra 6 months, we continued to get 6 percent. This is to be compared to what we might have got if we had been renegotiating after 12 months. The “powers to be believed” tell us that a major recession will be in full force within 12 months. After 12 months, we will be faced with a claim for a pay pause, which will have force of logic. It means that the 4 percent for 12 months is likely to be frozen, rather than be increased. That means the comparison is simply 18 months at 6 percent as opposed to 18 months at 4 percent.” Easily ratified!
Management will have a more difficult sales job. Council representatives endeavoured to keep the increase in wages over the period from 1 July 2008 to 30 June 2009 to 6 percent or less.
| Council |
6% – 24 months |
| Agreed compromise |
6% – 18 months |
What ifs (on the printed copy there is an arrow from this box to the empty cell in the table below) |
Management sought a 24-month agreement, but settled on a compromise 18-month agreement. The “what if” period is the 6 months that fall between the 18-month term and the 24-month term. What if the parties negotiate a short-term pay pause between 18 months and 24 months? Wages stay at 6 percent as in the 18-month agreement. Council cost objectives are achieved. What if they negotiate a 2 percent increase wage increase for the short-term six-month agreement or, for that matter, any length of subsequent agreement that provides 2 percent over this six-month period?
| Percentage |
Months |
Weighted average increase* |
| 6% |
18 |
108 |
| 8% = 6 + 2 (or 4, 6, ?) |
6 |
48 |
| (Empty cell - in the printed copy an arrow from the what if cell points to this cell) |
24 |
156 |
*A weighted increase is the percent multiplied by the number of months that the percent applies; the average increase is equal to the sum of the weighted increases, divided by the total number of months – 156/24 = 6.5%
Management failed in its objective to keep wages to 6 percent or less. Council representatives did, however, gain an extra six months over a long pattern of having to renew the agreements every 12 months. The elected councillors will ratify the agreement with an additional six months with some relief.
Dottie signs on the dotted line and thinks about advantages in negotiating the next agreement in November 2009 rather than in June 2010. Wage increases won’t be stuck in a council-adopted annual plan until February 2010. Union claims will be a public issue before the adoption of the budget. She thinks she just might attend the public consultation over the 2009/2010 annual plan and budget and remind the ratepayers that union members have children to feed and, ah yes, rates to pay.
The TAO of collective bargaining
To return to martial arts, the martial arts analogy applies not only to the giving and receiving of blows in collective bargaining, but there are both art and philosophy in Kung Fu and Bruce Lee, and collective bargaining and Dottie Doolan. The Kata in Karate is a choreographic sequence of moves, kicks, strikes and blocks joined together in a dance of war. They are performed among and against imaginary opponents. But they are more than a “Clayton’s” fight – Kata are spiritual enactments that make it unnecessary to fight; connections between power and peace, strength and silence, threat and grace. I am waxing lyrical for a purpose.
The opening proposal and counter proposal in collective bargaining are truly ritualistic. The aggression of the union advocate is symbolic, representative of the possibility of war, and the counter proposal of the employer is a signal that the homeland will be defended. Nevertheless, the ritual with its aggressive gestures, when fully appreciated and acted out, most often replaces the need to strike or to take action.
The strike or lockout is warfare, an unthinkable outcome in civilised society, leaving relationships within industry permanently damaged. Major strikes stop production, but they also result in managers being moved on and special general meetings to remove elected union officials! Career paths take unexpected directions. Lawyers are the easiest to blame and the most expendable. The effects of strikes do not end when the workers come back to work.
The uninitiated often underestimate the strength and primacy of feelings and the importance of their ritualistic expression in substitution for striking or locking out. The dramaturgical nature of collective bargaining therefore does not make it unreal or phony. The playing out of emotions, the sacrificial injury to feelings, and even reputation, replaces the unthinkable affects of a strike or a lockout on the financial viability of businesses and families and the long-term relationship between employers and employees. I can find no other explanation for the power of evocations in collective bargaining and their transformation into peaceful and co-operative solutions and agreements.
Peace will prevail at Possum Patch.
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This page was last updated on:
27-Jul-2009
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