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Do you know the four main stages in wage negotiations?

by , 27 January 2014
The biggest mistake you could ever make is to walk into wage negotiations with trade unions without a fundamental knowledge of collective bargaining, the negotiation process and the relevant legislation. Read on to discover the four main stages in wage negotiations so you know what to expect...

You're normally free to decide what pay increases you'll give your staff as long as you comply with the legislation controlling minimum wage levels and minimum wage increases.

But if you have a recognised trade union in your workplace, you can't afford to overlook these four stages of wage negotiations. They are:

  1. Preparation
  2. Introduction and positioning
  3. Bargaining
  4. Reaching an agreement

Let's take a closer look at each one of them.

Revealed: The four main stages in wage negotiations

STAGE 1: Preparation

Don't skip this stage!

It's the vital foundation on which your success in the entire negotiation process is based. During preparation you'll follow four steps:

Step 1: Arm yourself with crucial information and decide on what you want out of the negotiations.
Step 2: Analyse the information.
Step 3: Plan your own strategy to achieve your goal.
Step 4: Ensure the resources you'll need to achieve your goal are available.

STAGE 2: Introduction and positioning

The Labour Law for Managers Loose Leaf Service says you must open the first meeting by:

  • Introducing all parties present.
  • Thanking the union for its proposals, committing your company to constructive negotiations and trusting the union will operate in the same spirit.
  • Stating that, while you've read the union's demands, you have some problems to share with them.

STAGE 3: Bargaining

Once the union has responded to your presentation, adjourn to the caucus room to consider their response.

Your counter-response must be based on:

  • The content and underlying trends in the union's response; and
  • Your own goals.

STAGE 4: Finalising the settlement

Here, it's your job to finalise an agreement. You can do this by:

  • Signalling that you have little or no more room in your mandate to move further.
  • Politely, but firmly, making it clear that the union's threats of a strike don't scare you.
  • Repeating the advantages of your proposals for the workers.
  • Making a last minute proposal

After concluding wage negotiations you must put all the agreements into a written contract as quickly as possible. Then, get the union official and chief shop steward must sign it.

Make sure your report to the workers makes it clear a deal has been reached and clarifies the content of the agreement.

Knowing what the four main stages in wage negotiations are will help ensure your negotiations are a success.

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