This chapter discusses key issues related to wages that are negotiated through collective bargaining. It covers determining basic wage rates based on comparative norms, ability to pay, and cost of living. It also discusses wage adjustment methods like escalator clauses and reopeners. Additionally, it examines overtime and flextime policies as well as job evaluation comparisons and two-tier wage systems.

1. Course: Labor and Industrial Relations
Chapter 7: Wage Issues under Collective
Bargaining
Lecturer: Ol Ro,
Group 3
1.Roeun Nakry 4. Meach Chansothea
2.Hong Sothary5. Phorn Dara
3.Mor Taimeang
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TableTable ContentContent
1. Collective Bargaining
2. Determination of the Basic Wage Rate
 Comparative Norms
 Ability to Pay
 Cost of Living
1. Wage Adjustment
2. Wage Differentials
3. Overtime and Flextime
4. Job Evaluation and Comparison
5. Concessionary Bargaining
6. Two-tier Wage Systems

3. 1. What is Collective Bargaining?
the negotiation, administration, and
interpretation of a written agreement between
two parties, at least one of which represents a
group that is acting collectively, that covers a
specific period of time

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There are four major issues deal with in
collective bargaining :
1. Wage Related Issues
2. Employee Benefits or Economic Fringe
3. Institutional Issues
4. Administrative Issues

5. 2. Determination of the Basic Wage
Rate
• Comparative Norm
The presumption that the economics of a
particular bargaining relationship should
neither fall substantially behind nor be
greatly superior to that of other employer-
union relationships. Generally, it is good to
keep up with the crowd, or to lead it if
necessary.

6. 2. Determination of the Basic
Wage Rate Cont.
• Ability to Pay
Ability to pay has limited usefulness;
focus is on firm performance, not on
employee performance.
Unions expect a firm in good financial
condition to pay higher wages, but not
reduce wages when the condition of the
firm declines.

7. 2. Determination of the Basic
Wage Rate Cont.
• Cost of Living
The firms have to think about the expending
of the worker in order to consider how much
to pay for them in a good wage.
Employees have to pay for housing expenses,
utilities, food costs, transportation, taxes, ,
and healthcare. etc.

8. 3. Wage Adjustment
There two primary methods of wage
adjustment during the life of the contract:
escalator clauses and wage reopeners.
1.Escalator clauses: The philosophy behind
the incorporation, also know as cost of living
adjustment provisions.

9. 3. Wage Adjustment Cont.
2. Reopeners
Collective bargaining contracts require that
the party that desires to change wages give a
written notice to the other party within a specified
period.
Wage and Price Control
Comprehensive government restrictions on
the maximum rate at which wages and prices may
increase during a specified time period.

10. 4. Wage Differentials
Collective bargaining contracts provide for
different rate of wages for different employees
performing the same kind of work and holding
down the same types of jobs.

11. 4. Wage Differentials Cont.
Wage differentials base on the consideration:
 The degree of skill
 The strain of work
 Experience involves
 Period of time
 The responsibility of undertaken
 The disagreeableness of task

12. 5. Overtime and Flextime

13. 5. Overtime and Flextime Cont.
• Collective bargaining agreements
 Fair Labor Standard
 Pyramid of Overtime
 Overtime premium

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5. Overtime and Flextime Cont.
• How to calculate on overtime pay
1. Determine whether the individual is
eligible for overtime.
2. Determine the hourly rate of pay,
which is the total amount paid in the
period divided by the number of hours
worked.
3. Multiply the hourly rate of pay by 1.5

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• Flextime: Is a scheduling arrangement
that permits variations in an employee’s
starting and departure time. This period
call a core time.
5. Overtime and Flextime Cont.

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6. Job Evaluation and Comparison
• Job evaluation is the systematic process
for assessing the relative worth of job
within an organization.
• Job comparison is in many cases, the
manager’s answer to intransigent union
opposition to job evaluation where this
remain a force.

17. 7. Concessionary Bargaining
Concessionary Bargaining
is a term used in labor law. It is a kind of
collective bargaining in which the trade
unions surrender or give back previously
gained improvement in pay and condition in
exchange for some from of job security.

18. 7. Concessionary Bargaining Cont.

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8. Two-tier Wage Systems
• A two-tier system is a type of payroll system in
which one group of employees receive lower
wage or benefit than another.
• The two-tier system of wages is usually
established for one of three reasons:
1. The employer wishes to better compensate more.
2. The employer wishes to establish a payment.
3. The employer wishes to reduce overall wage costs
by hiring new employees at a wage less than current
employees.

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SummarySummary
In conclusion, in this chapter focus about
how employer and employee negotiate in wage
issue.
There are three factors that determine the
basic wage rate like comparative norm, ability
to pay, and cost of living.
And we understand the two primary
methods of wage adjustment during the life of
the contract, wage differentials, overtime and
flextime, and two tier wage system.

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