COLLECTIVE BARGAINING

INTRODUCTION/ DEFINITION

Good relations between the employer and employees are essential for the success of industry. In order
to maintain good relations, it is necessary that industrial disputes are settled quickly and amicably. One
of the efficient methods of resolving industrial disputes and deciding the employment conditions
is Collective Bargaining. Industrial disputes essentially refer to differences or conflicts between
employers and employees.

Collective Bargaining is a process in which the management and employee representatives meet and
negotiate the terms and conditions of employment for mutual benefit. Collective bargaining involves
discussion and negotiation between two groups as to the terms and conditions of employment. It is
termed Collective because both the employers negotiators and the employees act as a group rather
than individuals. It is known as Bargaining because the method of reaching an agreement involves
proposals and counter-proposals, offers and counter offers. There should be no outsiders involved in the
process of collective bargaining.

Collective bargaining is concerned with the relations between tarde unions & management. Bargaining
is collective because chosen representatives of labour & management acts as bargaining agents.

Collective Bargaining refers to a process by which employers on the one hand and representatives of
the employees on the other attempt to arrive at agreements covering the conditions under which
employees will contribute and be compensated for their services-Michael J.Jucius

FEATURES
Group & Collective Action
Strength
Continuous Process
Flexible
Voluntary
Dynamic
Power Relationship
Bipartite Process
OBJECTIVES

To maintain cordial relations between management & the workers

To settle disputes/conflicts relating to working conditions & wages
To protect interest of workers through collective action.
To ensure participation of Trade Unions
To resolve the differences between workers and management

PRINCIPLES
Principles for Trade Unions-: a) They should have open mind on various issues. b)There should
not be any room for confusion & misunderstanding. c) Trade Unions should fully support
management. D)Strike calls should be the last resort.
Principles for Management-: a) Mgt. should give proper recognition to trade unions. b)Rules
governing labour should be periodically examined. c) all the clauses of agreements should be
accepted in true spirit.
Principles for both Union & Management-: a)Both the parties should have faith on each other.
b) Both the parties should have positive view of whole process rather thinking it as formality. C)
Both the parties should adhere to all laws applicable to Collective Bargaining.

FUNCTIONS
Long run Social change-: It is a technique of long run social change where inferior class aims to
acquire a large measure of economic & political control over crucial decision in the areas of its
most immediate interest.
Industrial Jurisprudence- it is a method of introducing civil rights into industry that is,of
requiring that management be conducted by rules rather than arbitrary decisions
It is a group or collective action as opposed to individual action. It is initiated through the
representatives of the employees.
It is a flexible and dynamic process where-in no party adopts a rigid attitude.
It is a continuous process, which provides a mechanism for continuous negotiations and
discussions between management and the trade unions.
It is a voluntary process without any third-party intervention. Both workers and management
voluntarily participate in the negotiations, discuss and arrive at a solution. That is why it is
known as a bipartite process where workers representatives and management get an
opportunity for clear, face-to-face communication.
It ensures industrial democracy at the workplace; it is a self-run government in action.
 It is a two-way process. It is a mutual give and take rather than a take home all method of
arriving at a solution to a dispute.

ESSENTIALS OF SUCCESSFUL COLLECTIVE BARGAINING

Favourable Political Climate
Strong & Stable Unions
Recognition of trade unions
Willingness to give & take
Negotiators Authority
Fair practices
Positive Attitude rather than a fighting approach

TYPES

Distributive Bargaining: It involves haggling over the distribution of surplus. Various activities
involved in this activity are wages, salaries, bonus and other financial issues. In this activity, both
the parties face a win/lose situation.

Integrative Bargaining: Also known as Interest-Based Bargaining, issues which are not
damaging to either party are discussed. It is a negotiation strategy in which both the parties
collaborate to find a win-win solution to their problems. This strategy focuses on developing
mutually beneficial agreements based on the interests of the disputants. Issues brought up may
be better job evaluation procedures, better performance appraisal methods or
training programmes etc

Attitudinal structuring: Attitudinal structuring refers to efforts by negotiators to shape their

opponents' perceptions about the nature of the issues to be negotiated. By cultivating an
atmosphere of friendliness, mutual respect, trust, and cooperation, negotiators can encourage
their opponents to view issues largely in integrative terms and participate in joint problem
solving. This activity involves shaping and reshaping some perceptions like trust/distrust,
friendliness/hostility, co-operative/non-cooperative between the labour and management.
When there is a backlog of bitterness between both the parties, attitudinal structuring is
required to maintain smooth and harmonious industrial relations.

Intra-Organisational Bargaining: It is a type of manoeuvring to achieve consensus among the

workers and management. Even within the union there may be differences between different
 groups as may be the case with the management. Intra-organisational consensus is required for
the smooth acceptance of the outcome of Collective Bargaining.

STAGES

Preparation for Negotiation: Preparation for negotiation in Collective Bargaining is as important

as the negotiation process itself. Upto 83% of the outcomes are influenced by pre-negotiation
process. Such preparation is required for both management as well as the union
representatives. From the managements point of view, pre-negotiation preparation is required
as:

Management should decide when and how to open the negotiations/dialogue.

Management must choose the representatives to negotiate at the negotiation table.

Draft for likely decisions should be prepared in advance so that the final agreement draft can
be prepared as soon as the negotiation process is over.

From the employees side also, preparation is required for the following reasons:

The union should collect the information related to the financial position of the company and
their ability to pay the employees.

The union must also be aware of the various practices followed by other companies in the
same region or industry.

The union must assess the attitudes and expectations of the employees over concerned
issues so that the outcome of negotiations does not face any resistance from them.

Identifying issues for Bargaining: The second step in bargaining process is the determination of
issues which will be taken up for negotiations. The different types of issues are:

Wage-related issues: Include wage or salary revision, allowance for meeting increased cost of
living like Dearness Allowance (D.A), financial perks, incentives etc.

Supplementary economic benefits: These include pension plans, gratuity plans, accident
compensation, health insurance plans, paid holidays etc.

Administrative issues: Include seniority, grievance procedures, employee health and safety
measures, job security and job changes.
 The wage and benefits issues are the ones which receive the greatest amount of attention on
the bargaining table.

Negotiation: When the first two steps are completed, both parties engage in actual negotiation
process at a time and place fixed for the purpose. There a re two types of negotiations:

Boulwarism: In this method, the management themselves takes the initiative to find out
through comprehensive research and surveys the needs of the employees. Based on the analysis
of the findings, the company designs its own package based on the issues to be bargained.
Thereafter, a change is incorporated only when new facts are presented by the employees or
their unions.

Continuous Bargaining: Involves parties to explore particular bargaining problems in joint

meetings over a long period of time, some throughout the life of each agreement. The basic
logic behind this method is that all persistent issues can be addressed through continuous
negotiation over a period of time. The success of negotiations depends on the skills and abilities
of the negotiators.

Initial negotiated agreement: When two parties arrive at a mutually acceptable agreement
either in the initial stage or through overcoming negotiation breakdown, the agreement is
recorded with a provision that the agreement will be formalized after the ratification by the
respective organizations.

Ratification of agreement: Ratification of negotiated agreement is required because the

representatives of both the parties may not have ultimate authority to decide various issues
referred to for collective bargaining. The ratification of agreement may be done by the
appropriate manager authorized for the purpose in the case of management, or trade
executives in the case of the employees. Ratification is also required by the Industrial Disputes
Act. It is important that the agreement must be clear and precise. Any ambiguity leads to future
complications or other such problems.

Implementation of agreement: Signing the agreement is not the end of collective bargaining,
rather it is the beginning of the process when the agreement is finalized, it becomes operational
from the date indicated in the agreement. The agreement must be implemented according to
the letter and spirit of the provisions made by the agreement agreed to by both parties. The HR
manager plays a crucial role in the day-to-day administration implementation of the agreement

PRE REQUISITES OF COLLECTIVE BARGAINING

1. Recognition of the Bargaining Agent. The management should give recognition to the trade union
for participating in the collective bargaining process. In case there is more than one union, selection
could be done through verification of membership by a government agency giving representation to
all the major unions through joint consultations. Thus, the bargaining agent of the workers should be
properly identified before initiating any action.

2. Deciding the Level of Bargaining. Whether the dealings are confined to enterprise level, industry
level, regional or national level should be decided as the contents, scope and enforcement agencies
differ in each case.

3. Determining the Scope and Coverage of Bargaining. It would be better to have a clear
understanding of what are the issues to be covered under bargaining. Many a time, bargaining is
restricted to wage and working conditions related issues but it would be advantageous for both the
management and union to cover as many issues as possible to prevent further friction and disputes.
Therefore, all the important and interrelated issues are to be taken for consideration.