Collective Bargaining and living wages
ACT was jointly created by global companies and trade unions out of the recognition that lasting improvement
of wages and working conditions can best be achieved through national collective bargaining at industry level supported by international purchasing practices.
International brands and retailers signed a Memorandum of Understanding with IndustriALL, the global trade union federation representing garment, textile and footwear workers, to ensure the payment of a living wage through their purchasing practices. Engaging in this process offers national manufacturers, trade unions and governments the opportunity to collaborate with global garment and retail brands that are committed to support efficient employment relations and substantial and continuous wage growth in the sector.
HOW DOES COLLECTIVE BARGAINING AT INDUSTRY LEVEL WORK?
Employers’ organisations and trade unions both need to be mandated by their members to negotiate a collective bargaining agreement about wages and working conditions at industry level on their behalf. If there is more than one trade union or employers’ organisation, a joint bargaining council can ensure that all relevant organisations are represented in the process. These are the parties to the agreement.
Based on their knowledge of the economic situation of the industry and the needs of the workers, the parties can negotiate an agreement balancing the different interests and expectations. The parties can include in the negotiations any issue they want to be subject of an agreement. They are free to negotiate the terms of the new agreement, as long as the finally agreed terms are not lower than the standards set by national law. This also includes provisions about dispute resolution, mediation, arbitration as well as monitoring and enforcement of the agreement.
The parties can agree cost efficient, speedy and clear dispute resolution mechanisms according to their needs
and priorities. Governments can support the coordinated wage setting through extension mechanisms. By making the provisions negotiated by representative organisations of employers and workers legally binding for the entire industry, governments can promote an equitable, innovative and productive sector based on fair competition.
WHAT DOES COLLECTIVE BARGAINING AT INDUSTRY LEVEL REQUIRE?
Several factors need to be in place to enable collective bargaining at industry level:
- A commitment by employers and trade unions – to negotiate in good faith.
- An enabling regulatory framework set by the government.
- Full respect of freedom of association.
- Mutual respect and the recognition of the legitimate interests of each party.
- The will to conclude and implement an agreement plus the commitment to no disputes over the content of the agreement once it is signed.