How collective bargaining is organized
Definition: the process whereby representatives of the workers (in a particular industry) negotiate
say pay settlements – with representatives of the employers (in that industry).
Generally, an individual worker is in a weak bargaining position – the main purpose of a trade union is to remove this weakness by “forcing” the employer to negotiate with the representatives of his/her work force.
Trade unions are autonomous bodies – they have complete freedom to act in their own interests. Most unions, however, are affiliated to the Trade Union Congress (TUC), which is the largest trade union. It has an important role in bringing trade unions’ points of views on a national scale, possibly affecting government decisions – e.g. the TUC have been at the forefront of the National Minimum Wage negotiations.
If the more powerful unions make full use of their bargaining strength, they could succeed in getting larger and/or more frequent wage increases than the weaker unions. This highlights the importance of “unionisation” within trade unions – the larger and more united the union, the better the bargaining position, ceteris paribus.