TERMS OF REFERENCE TO DEVELOP CUSTOMIZED COLLECTIVE BARGAINING STANDARD FRAMEWORK

INTRODUCTION

1. What is Collective Bargaining?

The ILO Convention No. 154 defines collective bargaining as referring to “all negotiations which take place between an employer, a group of employers or one or more employers' organizations, on the one hand, and one or more workers' organizations, on the other, for:

• Determining working conditions and terms of employment; and/or
• Regulating relations between employers and workers; and/or
• Regulating relations between employers or their organizations and a workers’ organization or workers’ organizations.

2. Different types of collective bargaining

There are various different types of collective bargaining. The type of collective bargaining being utilized by the parties does not necessarily impact on any decision-making in practice, but it is still useful to understand the context in which workplace negotiations typically take place.

The main four types of collective bargaining, classified on the basis of their nature and objective, are as follows:

• Conjunctive: where both parties seek to maximize their gains from the other’s loss, typically involving wages, bonuses and other employee benefits, where one party essentially wins over the other.

• Co-operative: where both parties seek to resolve a problem with a common interest and reach an amicable solution, typically involving working terms and conditions, for example, during an economic crisis.
• Productivity: where the employer seeks to increase productivity through employee incentives or bonuses, where both parties benefit equally, for example, from increased production and increased pay/benefits.

• Composite: where the union raises concerns regarding various matters, typically relating to an employee’s job security or welfare – such as working conditions or disciplinary processes – and demands equity in such matters to safeguard their long-term interests.

2. National legal framework on Collective Bargaining in Rwanda

The Government of Rwanda established legal framework which governs social dialogue and collective bargaining. The framework is comprised of ratified ILO treaties, national laws and regulations.

1. The Rwanda Constitution: The legislative foundation for social dialogue and collective bargaining is incorporated into the national constitution. The constitution grants citizens the rights to associate and collective bargaining.
2. ILO Conventions: In addition to the provisions on Collective Bargaining in the Constitution, Rwanda has ratified ILO conventions related to social dialogue and collective bargaining.

The ratified ILO conventions include:

Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87): The Convention was ratified in 1988(ILO 1948) : The Convention, among other rights, guarantees the following set of rights for workers and employers' organizations:

1. Workers and employers have the right to establish join organizations of their own choosing without previous authorization
2. Workers' and employers' organizations have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programmes
3. Workers' and employers' organizations are not liable to be dissolved or suspended by administrative authority
4. Workers and employers' organizations have the right to establish and join federations and confederations.

Right to Organize and Collective Bargaining Convention, 1949 (No. 98)(ILO 1948): Rwanda ratified the Convention in 1988. The Convention guarantees the following collective bargaining rights for workers and workers organizations:

1. Workers have adequate protection against anti-union discrimination in respect of their employment
2. Workers' and employers' organizations enjoy adequate protection against any acts of interference by each other or each other's agents or members in their establishment, functioning or administration
3. Machinery appropriate to national conditions shall be established, where necessary, to ensure respect for the right to organize as defined in the preceding Articles
4. Authorities should implement Measures appropriate to encourage and promote the full development and utilization of machinery for voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment through collective agreements.

Workers' Representatives Convention, 1971 (No. 135): Rwanda ratified the Convention in 1988. The Convention promotes the rights of workers' representatives. The primary rights promoted by the Convention are:

1. Workers' representatives must have adequate protection against any act prejudicial to them
2. Responsible parties shall give workers representatives appropriate facilities to enable them to perform their functions
3. These could include trade union representatives elected workers representatives
4. National laws or regulations, collective agreements, arbitration awards or court decisions may determine the type or types of workers' representatives who shall be entitled to the protection and facilities provided in this Convention
5. The existence of elected employee representatives shall not be used to undermine the position of the trade unions.

Tripartite Consultation Convention (C144): Rwanda ratified the C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144) in 2018. The Convention promotes effective consultations between government representatives, employers and The Convention seeks to ensure that:

1. The government replies to questionnaires concerning items on the agenda of the International Labour Conference and government comments on proposed texts to be discussed by the Conference
2. Proposals are made to the competent authority or authorities in connection with the submission of Conventions and Recommendations according to article 19 of the Constitution of the International Labour Organisation
3. The re-examination at appropriate intervals of unratified Conventions and of Recommendations to which effect has not yet been given, to consider what measures are taken to promote their implementation and ratification as appropriate
4. Questions arising out of reports are made to the International Labour Office under Article 22 of the Constitution of the International Labour Organisation.

C154 - Collective Bargaining Convention, 1981 (No. 154): Rwanda ratified the Convention in 2018. The Convention promotes collective bargaining and social dialogue in the labour market. The Convention, in particular, seeks to ensure that:

• Collective bargaining is possible for all employers and all groups of workers in the branches of activity covered by this Convention

• Collective bargaining is progressively extended to all matters

• The establishment of rules of procedure agreed upon between employers' and workers' organizations are encouraged

• Collective bargaining is not hampered by the absence of rules governing the procedure to be used or by the inadequacy or inappropriateness of such rules

• Bodies and procedures for settling labour disputes are conceived to contribute to the promotion of collective bargaining.

c) Labour Laws: The Law determines the framework governing collective bargaining in the country. The law identifies the rules of procedure and processes for collective agreements in the country. In addition, the law outlines the scope of topics of negotiations, duration of agreements, team compositions and validity of the agreement.

RATIONALE FOR PRODUCTIVITY COLLECTIVE BARGAINING APPROACH

Collective bargaining traditionalists might contend that major objective of collective bargaining is to provide employees with workplace representation rather than to encourage firm’s competitiveness. More so, collective bargaining is traditionally believed to address workers’ wages, allowances, leaves and labour disputes.

While employers’ reluctance to engage in collective bargaining is subject to various factors including limited awareness on the role of collective bargaining in labour relations management, the above-mentioned traditional thinking about collective bargaining is one of those factors hindering both parties to engage in the process. In fact, lack or limited employers’ interest in engaging in collective bargaining is associated to the fact that they are not convinced about the benefits it brings to their businesses.

With the above-mentioned background, there is need to address the aforementioned challenges hindering parties to engage in mutually beneficial collective bargaining. Thus, productivity bargaining presents advantages in addressing mentioned challenges where the employer seeks to increase productivity through employee incentives or bonuses and where both parties benefit equally: the employer gains increased productivity and employees gain increased pay/benefits.

Productivity bargaining refers to a mutual agreement between the employer and employees to agree on the ways of improving the productivity and competitiveness of their organization (Clegg, 1960). Since 1990s, many firms and unions have moved towards innovative collective bargaining and cooperative relationships as a way for developing firm productivity and competitiveness and increasing employment protection and job creation (Galbraith & Schendel, 1993). Calluzzo, Linda, and Baldwin (1993), investigated the relationship between innovative industrial relations programs, industrial relations outcomes and the level of economic performance. They suggested that such programs have positive effects on the quality of production and a positive effect on productivity.

Through the National Strategy for Transformation (NST1), the Government of Rwanda set it self a target of creating at least 1,500,000 Decent and Productive jobs. Hence, employing Productivity Bargaining Approach would contribute greatly to the implementation of this target.

Therefore, with the benefits which the Productivity Collective Bargaining approach presents, the Social Partners resolved to adopt this approach with the aim to address existing challenges and increase collective bargaining coverage through establishment of Productivity Collective Bargaining Framework.

• SCOPE OF WORK

The Productivity Collective Bargaining Framework will comprise the components below which the consultant must elaborate and structure:

i) Sharing Gains in Productivity Improvement

• Performance linked wage component -monthly payment based on fulfilment of monthly production targets or other criteria for performance
• Company performance bonus –annual payment based on share in additional value added.

ii) Enhancing decent work

This component will set how decent work will be promoted through collective bargaining by indicating the role of each party namely employer and employees. It will aim to promote the aspects which include but not limited to:

• Prevention of labour disputes and their settlement when they occur
• Occupational safety and health
• Prevention of child labour
• Social security
• Written employment contracts
• Payment of employees’ wages through Banks and other financial institutions
• Working hours and overtime compensation rates
• Employees’ freedom to organize
• The functioning of workers’ representatives and occupational safety and health committees

iii) Life Long Learning

Bargaining parties should consider that training as an integral part of collective bargaining components. This component will elaborate on:

• The need for competent employees
• The role of an employer in up-skilling employees
• The role of up-skilled employee.

iv) Management practices to be covered by Productivity Collective Bargaining

• Social dialogue and Communication with Workers: Arrangements for communicating information & management policies with employees and know employee expectations;
• Having policies that address employee’s needs: Employees need not only fair compensation policies but also individual growth, skills, recognition of experience, promotions policy, flexibility at work, fair & effective grievance handling system, etc.);
• Compensation system that rewards quality work (Ex. linking quality control to the employee performance and payments);
• Rewarding team work/Department;
• Progressive managements share information –relevant information –so that employees can form informed opinions of company situation and decisions of management;
• Enterprise productivity depends on a number of factors -Labour productivity does not depend only on labour; it is influenced by a number of other inputs (ex. capital invested, machines & technology, capacity utilization, methods & systems at work and human resource policies);
• Adopting productivity as a factor in bargaining (such as for performance-based wages component) requires also top management commitment to invest to modernize or extend the capital stock to raise productivity, training and ‘co-determination’ at the workplace;
• Productive and competitive business requires employees committed to company goals; this requires moving employee relations from ‘conflict and control’ to ‘trust & collaboration’ focused;
• Training is necessary for expected results to happen.

v) Information needed to discus and share in better company performance

• Company plans for Additional Investment (in machinery, technology, capacity improvement –supports increase in productivity)
• Current cost structure and actual costs (these include material costs, energy costs, transportation, marketing/sales costs, labour costs, admin costs, etc;
• Employees Share (this is total employee costs –actual and in percentage)
• Capital Share (whatever is not employee share, goes to capital share –actual and percentage).

METHODOLOGICAL APPROACH

The assignment is expected to employ both qualitative and quantitative approaches. On the quantitative aspect, the consultant will collect relevant primary data from the sampled companies and members of tripartite constituents. The consultant will further be expected to analyze any other secondary sources of relevant information.

The qualitative component will draw on the understanding and perception of the key stakeholders which will also include sampled companies, employers’ and employees’ organizations as well as Government institutions relevant to the subject matter.

The consultant will also conduct a desk review to benchmark on success stories from counties where productivity bargaining approach is a practice.

DELIVERABLES

The Consultant will deliver the following:

• Inception Report: with clear methodological framework and reflecting the understanding of the assignment.
• Draft study report: the draft study report shall be developed with adherence to these ToRs
• Final study report: will be produced after stakeholder’s validation meeting.

DURATION

The assignment is scheduled to take a maximum duration of sixty (60) calendar days commencing from the date of signing of the contract.

• REPORT SUBMISSION

The Consultant will report to the General Secretary of CESTRAR.

• QUALIFICATIONS AND EXPERIENCE

Minimum requirements for the consulting firm

To perform this assignment, the firm is required to meet the following minimum requirements:

• At least 5 years of operating in Rwanda or in the region in the field of labour or related fields or performing assignments in that field, in Rwanda.
• At least two (2) similar assignments related to labour rights or standards proven by related certificates of good completion.

SUBMISSION OF OFFER

The Expression of Interest should contain the following:

1. Technical Proposal:

• A cover letter expressing your interest in this assignment
• Technical proposal with a brief description of why you would be considered as the most suitable for the assignment, relevant expertise, and a detailed, clear methodology, your approach to complete the assignment
• CV of the Consultants proposed
• Company registration certificate (RDB)
• VAT-Registration certificate
• Latest tax clearance certificate
• Proof of successful completion of related assignments.

2. Financial Proposal: indicates the all-inclusive daily rate, supported by a breakdown of all costs. The costs must be in RWF and VAT included

Please submit electronically your Technical & Financial offers in 2 separated emails and should be in PDF files to this email ONLY: cestrartender@gmail.com until latest 22nd November 2024 at 3:00PM

Done at Kigali, on 12 / 11 / 2024

BIRABONEYE Africain

General Secretary of CESTRAR