The factors considered in local collective bargaining, with particular emphasis on accounting information

Abstract

Collective bargaining is a decision-making process through which management and trade unions, as representatives of employees, agree jointly about the conditions of work that will be in force over a coming period. One of the main functions of accounting information, in its various forms, is to assist users in making decisions. Locally, both trade umon and management negotiators give top priority to economic considerations during negotiations, particularly the entity's ability to pay a demanded level of wages and benefits and the relationship between labour remuneration and productivity. Accounting information does not appear to dominate the bargaining process, but both parties claim to give significant importance to financial statements. Internal management accounting information, on the other hand, is consistently rated below published financial statements in the different rankings outlined in this study. This dissertation explores the relative rankings of the factors considered by local negotiators and discusses the extent of use of, and the role played by, different types of accounting information in bargaining. It concludes that significant scope exists for further involvement of accounting functions within employer organisations and certified public accountants as consultants of trade unions in order to improve the understanding of accounting information and the decisions taken based on it.