Summary
In this article, Carrell and Bales explores the impact of economic recession on global economic activities. These authors further explore different collective bargaining methods used to address conflicts between employees and employers during these unfavorable economic times. Indeed, these authors admit that the employment sector is one of the most affected industries due to the emerging economic downturn. The most prominent economic recession occurred in 2007, leaving severe impacts in public and private sectors. This unfavorable trend has forced several governmental institutions, and private entities to exchange ideas and negotiate them, to address negative challenges such as reducing tax returns and increasing health insurance claims. However, the outcome of these economic veracities is a series of unsuccessful negotiations. In public industry, several laws are constituted with an aim of promoting collective bargaining. However, these laws also need alternative dispute resolution (ADR) techniques in order to address the bottlenecks encountered in the effort to negotiate after an economy affected by the recession. Two negotiation approaches (collective bargaining and alternative dispute resolution) are comprehensively discussed in this article. This author explains that the aim of incorporating these approaches in his analysis is to explore their significance and limitations in promoting arbitration after an economic downturn. Some governments use the final-offer arbitration to promote dispute settlement between conflicting parties. In summation, the authors explore collective bargaining agreement (CBA) utilized to address employment related issues after the global recession. The author goes further to explore the role final-offer arbitration and collective bargaining power in the wake of global economic crises.
Analysis
Government continues to lament on the impacts of the recession. There has been a significant reduction of economic financial earning after the onset of 2007 global recession. To worsen the situation, the healthcare and insurance costs continue to increase rapidly. These issues form the basis for Carrell and Bales’ arguments. As these authors proceed to explain, personal costs constitute 85 percent of total spending of the local and state government. As a result, governments target employment industry as a way of reducing operating costs. In order to secure their jobs, the targeted employees are unionizing and advancing to collective bargaining agreements. At this point, these unions divert from emphasizing on wage reduction, and draw their attention on a campaign against unfair dismissals. As the government and other public institutions explore different ways of cutting costs, the employees union remains strong on their stand in preventing layoffs. This trend presents another challenge to existing institutions that have to strive to reduce operating costs through alternative means.
In their article, Carrell and Bales mention employer-employee conflict as the main dilemma witnessed because of economic recession (p. 4). However, these researchers fail to explore this issue in a comprehensive manner. Instead, these authors proceed to introduce some collective bargaining agreements proposed by public institutions in order to reach a common agreement. Therefore, collective bargaining forms the basis of argument in this article.
As Carrell and Bales explain, collective bargaining is the best way of reaching an agreement and resolving conflicts emerging between employees and employers. This process emerged successful during favorable economic times. However, implementing collective bargaining during the recession resulted in challenges, such as plummeting revenues in state institutions. In an effort to reach a compromise between the conflicting parties during unfavorable economic times, the government sought to cut wages in order to continue retaining the existing employment pool. In reference to some clauses in "Evergreen,” expiry of CBA does not mean that terms and conditions cease to be effective. However, employer and employee may refuse to come to an agreement after expiry of a collective bargaining agreement. In order to address this issue, Carrell and Bales develop the idea that employees’ unions and employers should incorporate final offer arbitration in the attempt to reach a common agreement on employment terms (p. 7). The aim of the arbitration is to ensure that the two parties reach a conclusion that does not adversely affect the consumer.
In the second section of the article, the authors discuss the prevailing trend in collective bargaining. In the third section, Carrell and Bales explore final-offer arbitration as an effective tool in conflict resolution between employers and employees (p. 6). The next section explores some case studies that demonstrate the importance of utilizing final-offer arbitration techniques, citing possible failures and successes. The recommendations made after a comprehensive discussion guides on effective means of utilizing this alternative mediation approach in an effective manner. In order to differentiate between mediation and final offer arbitration, Carrell and Bales provide advantages and disadvantages of each of the mediation methods. In comparison to traditional fact finding arbitration and final-offer arbitration, best offer arbitration has several advantages. In his analysis of advantages, Carrell and Bales explain that best offer arbitration assists to minimize the negative impacts of traditional arbitration approaches (p. 8). Through this approach, the involved employees and employers are encouraged to embark on a polar rather than middle ground approach because the conciliator selects the offer with the best results. Another advantage of the best offer arbitration explained by these authors is its ability to encourage conflicting parties to agree on a common platform of settling emerging disputes. This approach incorporates the collective bargaining agreement, which is a recommended approach of reaching a consensus between conflicting parties. The author proceeds to explain the advantage of fact-finding arbitration in guiding involved officials to a conclusive decision in case of a contract disagreement.
In spite of a comprehensive analysis of the fact-finding arbitration advantages, the author fails to uncover the advantages and disadvantages of other arbitration techniques. This limitation reduces the likelihood of developing a comparative analysis between the two negotiation approaches. Instead, the author proceeds to uncover the common criticisms against final-offer arbitration. For instance, the author argues that use of the final offer arbitration technique does not guarantee that the two disputing parties will arrive at a conclusive agreement. However, studies on collective bargaining agreement agree that there are several instances when conflicting parties can reach a compromise. In such instances, an arbitrator has the option of making a choice between two difficult offers. In response to criticism raised by Carrell and Bales, supporters of arbitration maintain that utilization of issue-by-issue strategy is more recommendable than package strategy.
Studies on final-offer arbitration establish that encouraging more transparency between the parties increases the likelihood of settling a disagreement. In an example, a research cited by Carrell and Bales explains that when conflicting parties are aware of the final offer, the likelihood of reaching a compromise increases. In yet another scenario, Carrell and Bales cite a research conducted in New Jersey that established final offer arbitration technique is more appropriate in comparison to traditional methods. Indeed, final-offer increases the likelihood of reaching conciliation in disputes while building a platform for conflicting parties to be impartial in their offers.
There are disadvantages of final-offer approach the authors fail to offer in their analysis, which could have strengthened their argument. For instance, utilization of final-offer approach may frustrate efforts of the parties targeting to reach an agreement. A related scenario is explained in Columbia Code, whereby the conflicting parties disagreed further as they tried to reach a compromise using the final-offer approach. In order to reduce negative impacts that emerge because of failing to reach a conciliation using final-offer strategy, the conflicting parties should be willing to prove that the last offer is the best offer.
Conclusion
In the modern world, several transformations are being witnessed. Because of the existing trend of economic recession, the public sector has been forced to change their process of negotiation in order to seek concession in healthcare, houses, employment, wages, and pension issues. The outcome is extended consultations procedures and stalemates. In previous challenging economic conditions, several state administrations have embarked on processes of negotiating for wage reduction and moderate rise of healthcare insurance cover costs. In order to address these significant issues, some of the state administrations have been forced to negotiate significant concessions past these givebacks. As Carrell and Bales establish in their article, current economic depression trend has resulted to a new era of wage and benefits concession in magnitude and scope.
Works Cited
Carrell, Mike. & Bales, Richard. Considering Final Offer Arbitration to Resolve Public Sector Impasses in Times of Concession Bargaining. Ohio State Journal on Dispute Resolution, 28. 1 (2013): 1 – 27.
