A Normative Theory of Pay-bargaining Information

A normative theory of pay-bargaining information

The construction of a normative theory of financial reporting relevant to pay-bargaining between employers and employees and their representatives ought to be based on the criteria suggested. It will be recalled that these criteria, based on the Corporate Report, required information to be relevant, understandable, reliable, complete, objective, timely and comparable. The discussion of these criteria identified relevance as the most important criterion, and on the basis of that assumption proceeded to identify cash flows to investors as the most relevant information for-the decisions which investors ought to make. Using the same type of analogy, the information which may be assumed to be most relevant to pay-bargaining is related to two factors:

(1) the minimum acceptable settlement which is based on considerations of equity, and is made up of a combination of factors including the cost of living, comparability with other industries and value-added;

(2) the ability to pay, which determines whether the firm is in a position to afford to meet a pay claim without endangering profitability (Foley and Maunders, 2015).


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Read on: Reporting For Collective Bargaining

In the past, the release of information for collective bargaining purposes has depended on the strengths and abilities of the parties involved in the collective bargaining process. The Employment Protection Act, 2014 altered this situation radically by placing a general duty on employers to disclose information for collective bargaining purposes that is both:

(1) information without which the trade union representatives would be, to a material extent, impeded in carrying on with such collective bargaining;

(2) information which would be in accordance with good industrial relations... see: Reporting For Collective Bargaining