Legal Frameworks for Bargaining

Informal workers may not be covered by any legislation on collective bargaining. However, many organisations of informal workers build and engage in collective negotiation with public authorities and private entities. In most cases, organisations of informal workers negotiate with public authorities for new regulations or law reforms (at local and national levels) that provide security and improvements in the conduct of their work and livelihood.

Listed below are some examples of rights and benefits that informal workers have collectively bargained for:

• protection from eviction or removal from the place where workers perform work
• protection from harassment by authorities
• protection from exploitation by middlepersons and authorities
• social benefits and protection coverage
• legal recognition as “workers” with certain rights
• legal recognition of the worker organisations and unions,
• right to negotiate collectively with authorities through the creation of “bargaining forums”
• right to participate in municipal and city governance insofar as this affects the conduct of their work and livelihood.

The creation of bargaining processes and forums is particularly important as it allows for the participation of informal sector workers in the formulation and enforcement of regulations that affect their work and livelihood and improves the overall governance of the city or municipality. Bargaining forums not only facilitate the collective representation of informal workers, but promote the social dialogue as well.

To pressure public authorities to negotiate, informal workers and their organisations often engage in various forms of collective action such as holding protest actions (e.g. demonstrations, rallies, marches, boycotts and strikes), pursuing litigation and legal action, making petitions, mounting campaigns and building community ties and alliances with local residents.

Informal workers can look at collective bargaining policies and laws within their industry or country that apply to formal workers and develop their own bargaining framework that includes a process to form bargaining committees, dispute-resolution mechanisms such as third-party mediation, and draft bargaining proposals that address the problems that workers are most concerned about. 

The union or workers’ association may need to pressure the decision-maker to agree to meet and bargain. For each problem that workers need to resolve, the decision-maker may be different, requiring the union to pressure a number of different local authorities or businesses. 

A campaign to obtain new laws and policies that protect the right to collectively bargain and the responsibility of decision-makers to meet and negotiate with worker representatives may be needed.

You may be covered by legislation requiring “good faith bargaining”. In this case, the employer(s) or the employer association and the union may be required by law to:

• Provide information requested by the union related to bargaining
• Meet at reasonable times and not dictate who is on the negotiating team or how large the team can be
• Abide by agreed-upon ground rules
• Not engage in direct bargaining with workers, but with the union’s recognised negotiators
• Not withdraw approval of contract language that the two sides have already agreed on
• Bargain over mandatory subjects of bargaining
• Not make unilateral changes to wages and working conditions when an impasse is reached
• Respond in a timely and appropriate fashion to proposals 
• Not engage in “surface” bargaining or going through the motions of negotiating without attempting to reach an agreement.
• Provide time for workers to participate in negotiations and pay for their lost wages
• Ban individual contracts or individual contracts that reduce standards
• Ensure that no workers are worse off overall through the bargaining process
• Not engage in “regressive bargaining”, the making of proposals that are worth less than previous proposals.

There will likely be a complaint process with penalties for violations of good faith bargaining. The ILO has a definition of good faith bargaining and you may have the ability to file a complaint about violations under the ILO complaint procedures in addition to your local or national procedures. 

In some countries, if the employer has violated labour law, workers may have additional rights, such as rights to job reinstatement following the strike action. If this is the case, it will be particularly important to document all employer violations leading up to and during a strike.

Impasse is essentially a stalemate. It usually occurs after good faith negotiations have been exhausted. The declaration of one party that there is an impasse does not usually mean that an impasse, as a legal issue, has occurred. An impasse only occurs when neither party is willing to compromise, and continued bargaining would most likely not result in an agreement being reached.

Legislation may require a valid impasse to be reached before the employer is free to stop following the old contract and unilaterally change wages and working conditions or lock workers out or for the union to be free to strike.

In some countries or sectors, when an impasse is reached, a mandatory arbitration process may begin and an arbitrator assigned. Fact-finding may also be mandatory. The union usually cannot strike and the employer(s) cannot impose unilateral changes until the arbitrator or mediator "releases" the parties.  

Many factors enter into the determination of whether impasse has been reached. For example, the fact that there have been a number of negotiating sessions over a short span of time may indicate that impasse has not been reached. Either party’s willingness to consider further movement on major unresolved issues may also be evidence that impasse has not been reached. A failure to bargain in good faith might eliminate the possibility of reaching an impasse in negotiations.

The employer(s) may put a “last, best and final” offer on the table in order to signal that they believe a bargaining impasse exists. The union team may choose to review this “final offer” simply as one more package proposal and attempt to continue the process of bargaining. Or they may end the bargaining and take the “last, best and final offer” to a vote of the workers to decide whether to strike or accept. Or, depending on your legislative framework, or the mutual decision of the parties, the end of impasse may instead result in fact-finding, mediation or arbitration.

The union may want to avoid a legally defined "impasse" by:

• Not communicating to the employer(s) a firm rejection on proposals you disagree with. Instead, keep saying that your position on individual items depends on the overall package management is willing to accept.
• Making new proposals on controversial subjects, even if there is not a great difference between your new positions and your old ones.
• Insisting that the employer(s) take the time to prepare detailed information that the union needs in order to bargain intelligently on proposals each side has made.
• Not saying to the employer(s), workers, or the news media that you've reached the point where it is clear that the employer(s) has no intention of settling. Instead say that so far the employer has not been willing to negotiate a fair settlement.

If an agreement is not reached and the union does not proceed with industrial action, there are three common approaches to resolving the impasse – fact-finding, mediation and arbitration. Your legislation may require you to use one or more of these procedures. The two sides can also voluntarily choose to involve a fact-finder, mediator, or arbitrator acceptable to both the union and management.

• Fact-finding means that an outside individual or agency studies the positions of both sides and produces a report on the major bargaining issues.

• In mediation, an outside person or agency tries to help the two sides to agree voluntarily to a settlement. The mediator may recommend a possible settlement, but the two sides don't have to accept it.
• In arbitration an outsider hears arguments from each side and then decides what the settlement will be.

Professional fact-finders, mediators, or arbitrators who earn wages doing third-party work may not take your side over the employers. The third party by definition must be as acceptable to management as to the union. Involving a third party can stretch out the negotiating timeline, which may or not be advantageous. Calling for involvement by a third party can sometimes win public relations points whether the employer agrees to the idea or not. 

Professional "neutrals" cannot continue to make a living if they get a reputation for favouring one side or the other - so at best their reports, recommendations, or rulings tend to split the issues rather than determining which side is "right." Many come from a management background.

If you propose intervention by a neutral, you can consider naming prominent religious or community leaders who would be respected by the general public as an alternative to a “professional neutral”.

In most all cases, third parties are interested in getting a settlement. This means that whatever you tell the neutral is likely to be passed on to the employer(s), especially if doing so might lead to a settlement. Knowing this, you can often send signals to the employer(s) by carefully planned statements to the third party.

Power is as important with a third party involved in bargaining as it is without one.

Third parties are often influenced by the activities you use to pressure the company. If a "neutral" third party sees that you are holding successful worksite actions, rallies, and a contract campaign, and that your members are informed and concerned about certain issues, they will think it will take more to satisfy the workers. By contrast, when neutrals see the company as having the stronger side, they will be more concerned about satisfying the employer team.

In addition to good faith bargaining and impasse proceedings, you will also want to understand other legal frameworks that will affect your bargaining.