1. APPLICATION OF COLLECTIVE BARGAINING IN A PERIOD OF ECONOMIC
RECESSION
PREAMBLE:
The challenges facing Nigeria today is that: after half a century of political
independence, the country has been engulfed in financial, social and economic
crises. Basically, the two main features of Nigerian economy have been over-
dependence on oil as the main source of foreign exchange and government
revenue, as well as the role of government as the prime/major mover of the
economy.
Contrary to expectations, the oil boom era brought with it many errors and
indiscretion for which we are now paying very dearly. The most important among
these errors were the complete neglect of agriculture which used to be the mainstay
of the economy; the development of our manufacturing sectors on the fragile
foundation of massive importation of raw materials; indiscriminate expansion of
public utilities and social services and taking over of some responsibilities that
should have been undertaken by the individuals, the family unit and the private
sectors of the economy. The economic recession and oil glut/surplus which presently
is a global phenomenon inevitably brought a decline in government revenue and
consequently, slowdown in economic activities.
In economics, a recession is a business cycle contraction, a general slowdown in
economic activity over a period of time (Websters, 2008). During recession, many
macro-economic indicators vary in a similar way. Production as measured by Gross
Domestic Product (GDP), employment, investment spending, capacity utilization,
household incomes, business profits and inflation all fall during recession, while
bankruptcies and the unemployment rate rises. Recessions are generally believed to
be caused by a widespread drop in spending.
The scandalous, erratic/epileptic and poor power supplies also add to the cost of
business activities thereby fuelling inflationary trends. In addition are social vices like
corruption and high level of insecurity and crimes which forestalls foreign investment.
Employers of labour are forced to embark on manpower contraction and/or
retrenchment as a way out of the problem therefore creating more problems for
affected employees and family. Governments usually respond to recessions by
adopting expansionary macroeconomic policies such as increasing money supply,
increasing government spending and decreasing taxation.
As expected, the economic recession seems to have modified the bargaining pattern
and/or power of the unions/ workers representative. Fashoyin (1980) acknowledges
that the economic recession appears to be revising the approach towards centrifugal
relationship by returning to erstwhile enterprise bargaining on many issues. But the
unfolding shift may not necessarily be an indication of permanent loss of interest in
multi-employer bargaining. The shift could be seen as employers’ preference to find
solutions to their industrial problems on individual basis as this was more likely to
produce quicker and more relevant results.

2. The foregoing trend has been particularly so, because the Employers’ Association
have not traditionally concerned themselves at least on a large scale with non-
industrial relations problems. Besides, the problems of individual Employers vary
from one industry to the other. Imoisili (1986) agrees with this assertion as he states
that a recession may not be harmful to every business organization at a particular
point in time or the same company over time. On same issue, Fashoyin (1980) puts
it that the impact of recession vary among employers in the same industry and these
employers may have tended to take advantage of the obvious reduction in the
bargaining power of the industrial unions.
Bargaining at plant level has therefore been focused on the need to keep workplace
going through such means as emphasis on productivity, flexibility in manpower
allocation and the production of favourable employee attitude which are better
handled at the enterprise/plant level. As Imoisili (1986) observes, bargaining at the
plant level in the area of common understanding has yielded abundant fruits. Many
employers have resorted to using redeployment and short-time work to keep
everybody busy.
ECONOMIC RECESSION:
A recession is a significant decline in activities across the economy, lasting longer
than a few months. It is visible in industrial production, employment, real income and
wholesale-retail trade. The technical indicator of a recession is two consecutive
quarters of negatives economic growth as measured by a country’s Gross Domestic
Product (GDP). It could also be seen as a period of general economic decline,
defined usually as a contraction in the GDP for six month (two consecutive quarters)
or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a
recession generally does not last longer than one year and is much milder than a
depression. Although recession is considered a normal part of a capitalist economy,
there is no unanimity/unison of economist on its causes.
COLLECTIVE BARGAINING:
The industrial relation system is regulated by collective bargaining, defined by
Flauder (1970) as a social process that continually turns disagreement into
agreement in an orderly fashion/ manner. Collective bargaining is the establishment
by negotiation/dialogue and discussion of agreement on matters of mutual concern
to employers and Unions covering the employment relationship and terms and
conditions of employment. It therefore, provides a framework within which the views
of Management and Unions about disputed matters that could lead to industrial
disorder can be considered, with the aim of eliminating the causes of the disorder
hitherto noticed. Collective bargaining is a joint regulating process, dealing with the
regulation of management in its relationship with the work force as well as the
regulation of conditions of employment. It has a political as well as economic basis-
both sides are interested in the distribution of power between them as well as the
distribution of income.
Collective bargaining can be regarded as an exchange relationship in which wage-
work bargain take place between employers and employees through the agency of a
trade Union. Traditionally, role of trade Unions as bargaining agents has been
perceived as being to offset the inequalities of individual bargaining power between
employers and employees in the labour market. Above all, Collective bargaining is a

3. power relationship that takes the form of measure of power-sharing between
management and trade unions.
BARGAINING POWER:
The extent to which industrial sovereignty is shared by management with its trade
Unions depends upon the relatives bargaining power of the two parties. Bargaining
power can be defined as the ability to induce the other side to make a decision or
take a course of action that it would otherwise be unwilling to make. Each side is
involved in guessing the bargaining preference and bargaining power of the other
side.
Bargaining power is inherent in any situation where differences have to be
reconciled. It is however, not an end in itself; negotiations must not rely solely on
bargaining power. One side may have enormous bargaining power, but to use it to
the point where the other side feels that it is impossible to deal with such a party is to
defeat the purpose of negotiations.
SOME POSSIBLE CAUSES OF THIS CURRENT ECONOMIC RECESSION:
Mainly for Nigeria; an economic recession could be triggered by a dip in government
revenue earnings and/or a drop in consumer spending. A drop in oil price for
example, can trigger a drop in government spending due to government not being
able to earn what it used to earn before the dip. In Nigeria where government are the
highest spenders in the economy, a drop in government spending can dovetail into a
drop in consumer spending which in turns means business can’t invest in product
and services.
Possible Causes of economic recession in Nigeria
1. Poor Economic Planning: poor economic planning and no concrete
implementation of her economic planning is the major cause of Nigeria current
recession. Yes the government has proclaimed the usual generalities that
every government indulges itself in about the following:
a. Diversification of the economy
b. Improving manufacturing/mining sector
c. Raising agricultural output
d. Encourage foreign investment amongst others.
2. High Inflation Rate: Government banning the importation of certain essential
agricultural product like rice without possible consideration to gestation period
is erroneous.
3. High Interest Rate: This high interest rate discourages investors; this in turn
culminates into high unemployment rate currently experienced in the Country.
4. High Taxation: It is only in Nigeria that I see government charging high tax
rate during economic recession. Small business is slaughtered with high

4. interest rate. Both high interest and tax rate has lowered Nigeria aggregate
demand.
5. Policy Conflict: The economic policies appears conflicting, How? High interest
rate, high tax rate are tight monetary policy measures. But government told
the public it is adopting expansionary policy. Others are Corruption and
inability of the government to save for the raining day.
FORMS OF COLLECTIVE BARGAINING:
a. Conjunctive or Distributive Bargaining: In this form of collective bargaining
both parties (employer and employee) try to maximize their respective gains.
It is based on the principle, my gain is your loss and your gain is my loss’ i.e.
one party wins over the other. The economic issues such as wages, bonus,
other benefits are discussed, where employee wishes to have an increased
wage or bonus for his work done, whereas the employer wishes to increase
the workload and reduce wages.
b. Co-operative or Integrative Bargaining: Both the employee and the employer
sit together and try to resolve the problems of their common interest and
reach to an amicable solution. In the case of economic crisis; such as
recession, which is beyond the control of either party, may enter into mutual
agreement with respect to working terms.
c. Production Bargaining: This type of bargaining is done by the management,
where the workers are given the incentives or bonus for increased
productivity. The workers get encouraged and work very hard to reach beyond
the standard level of productivity to gain additional benefit. Though this form
of collective bargaining, both the employer and employee enjoy the benefits in
the form of increased production and increased pay respectively.
d. Composite Bargaining: In this type of collective bargaining, along with
demand for increased wages the workers also express their concern over the
working conditions, recruitment and training policies, environmental issues,
merger and amalgamations with other firms, pricing policies, etc. with the
intention to safeguard their interest and protect the dilution of their power.
THE IMPACT OF RECESSION ON THE APPLICATION COLLECTIVE
BARGAINING TOOL; WAY FORWARD:
Given the relative scarce resources and the current economic realities, what is the
way forward in managing union/ management relationship with a view to sustain the
collective/ mutual objectives of both parties. Therefore, the under listed suggested
remedies may assist in charting a way forward in order to reduce/ abate the social-
economic impact of the current economic recession:
i. The union must strive to build capacity with qualitative technical
knowledge and competence to match the sophistication on the
management’s side.

5. ii. It is imperative for members to engage in life-long education through
continuous learning in order to adapt to global changes/challenges.
iii. The union as a progressive organization like others must be value driven.
iv. The Management must establish good and effective communication
channels to enhance clarity, good timing of message and necessary
feedback.
v. The union and its members must uphold the rules and tenets of
transparency and accountability through prudent financial management.
vi. Reduce to barest minimum the incident of all forms of conflicts/ industrial
disputes especially inter and intra conflict which is inimical to the good
health of the organisation.
vii. Improvement in leadership and management styles to enhance plan,
definition of clear objectives and to articulate vision for future needs and
operations;
viii. The management and unions’ adoption of global “Best Operating
Practices” (BOP) in the management of Industrial Relations affairs/issues
has become imperative.
ix. The union as a survival strategy must imbibe business culture that could
expose it to Bank loans and credits; as an alternative to Company’s
internal borrowing scheme.
x. The union must develop skills in emotional intelligence and control in order
to promote diplomacy and seek mutual co-operation, understanding with
management on issues of joint interests.
xi. The union should endeavour to remain in tune with the future which is
difficult to forecast; be prepared to seize opportunities that are present,
and also strive to create opportunities where none seem to exist;
xii. Strategic Formulation: Union must adopt appropriate strategies to enhance
operational efficiency, solve problems and achieve goals. In this respect,
the strategic questions are: (i) where is our organisation now? (ii) Where
do we want the organisation to get to? (iii) How do we get there? (iv) what
is the situation facing organisation now? (v) What changes are taking
place in the environment (internally and externally). The common tool of
analysis to answer these questions is SWOT (Strength, Weakness,
Opportunity and Threat) and PEST (Political, Economic, Social and
Technological external factor) analyses.
CONCLUSIVELY:
In a declining economy, changes caused by the recession pose threat which both
union and management must be aware of both in public and private sectors
respectively. The changes in some respect present opportunities which both parties
must strategize through the collective bargaining model to grab and make necessary
adaptations. In the same vein, where the changes/ challenges create an unpalatable
situation, means must be devised to combat same in the overall interest of parties

6. concerned. The advice of Olupona (2011) to Nigeria political leadership may also be
relevant and useful to parties of collective bargaining: ‘this nation must rethink its
values and philosophies. Our nation, especially our leaders must understand the
tenets of nation building. They must realize that it involves not only their own
commitments and paying more than mere lip service to programmes, projects, and
activities that support nation building, but it also requires a new imagination and a
vision that will enable them put in place programmes and activities that will propel
Nigeria to the greatness and international reputation its people deserve. Thank you.
REFERENCES:
Ekeh, I.I, (1967) “Employment in Nigeria” A study of the strategy of Development for
Nigeria. Economic Development Institute, University of Nigeria.
Fashoyin, Tayo (1980) Industrial Relations in Nigeria, Lagos, Longman Press.
Federal Department of Information (1983) Oil Glut: Effect on Nigerian Economy,
What you should know, Lagos, Public Enlightenment Division.
11th Edition Armstrong Handbook of Human Resource Management Practice (2009)