Collective Bargaining

Collective bargaining is the negotiation process that takes place between an employer
and a group of employees when certain issues arise. The employees rely on a union member to
represent them during the bargaining process, and the negotiations often relate to regulating
such issues as working conditions, employee safety, training, wages, and layoffs. When an
agreement is reached, the resulting “collective bargaining agreement,” or “CBA,” becomes the
contract governing employment issues. To explore this concept, consider the
following collective bargaining definition.

What is Collective Bargaining

The National Labor Relations Act, or “NLRA,” was established in 1935. The Act set the
standards for U.S. labor laws, which guarantee employees certain basic rights, such as the right
to organize into trade unions, and the ability to engage in collective bargaining negotiations.
The Act requires officials elected to head a union to meet with the employer to negotiate
conditions. Specific rules in support of collective bargaining include:

 There is a limit of one representative for each unit of employees

 All representatives must promote the practice, and follow all procedures, of collective
bargaining
 Employers must bargain with the employees’ representatives
 Employees and their representatives have the right to discuss wage issues
Not all employers and employees are covered under the act. For example, independent
contractors and government workers are excluded from the NLRA. However, the Act does
stipulate that these workers cannot be prevented from joining labor unions if they wish to do
so.

Collective Bargaining Process

The Collective Bargaining is a technique to reach a mutual agreement between the
employer and the employee. Here the representatives of both the parties viz. The union and the
employer meet and discuss the economic issues such as wage, bonus, number of working hours
and other employment terms.

Next, the parties meet for a discussion. The negotiation process can frequently turn
heated and emotionally charged. For that reason, the parties typically agree to certain ground
rules before beginning, in order to avoid conflict which could cause the process to fail. Once
the specifics of the dispute have been discussed, the parties exchange proposals of options to
resolve the dispute. This is followed by the bargaining process, whereby the parties explore
various potential compromises.

As the parties get close to reaching an agreement, a tentative written collective

bargaining agreement is drafted, revised, and developed as the parties reach a final agreement.
Once all terms are firm, the final collective bargaining agreement is reviewed and signed by
both parties, and becomes a binding contract.
The collective bargaining process involves five core steps:

1. Preparation: At the very first step, both the representatives of each party prepares
the negotiations to be carried out during the meeting. Each member should be well
versed with the issues to be raised at the meeting and should have adequate knowledge
of the labor laws.

The management should be well prepared with the proposals of change required in the
employment terms and be ready with the statistical figures to justify its stand.

On the other hand, the union must gather adequate information regarding the financial
position of the business along with its ability to pay and prepare a detailed report on the
issues and the desires of the workers.

2. Discuss: Here, both the parties decide the ground rules that will guide the negotiations
and the prime negotiator is from the management team who will lead the discussion.
Also, the issues for which the meeting is held, are identified at this stage.

The issues could be related to the wages, supplementary economic benefits (pension plans,
health insurance, paid holidays, etc.), Institutional issues(rights and duties, ESOP
plan), Administrative issues(health and safety, technological changes, job security, working
conditions).

3. Propose: At this stage, the chief negotiator begins the conversation with an opening
statement and then both the parties put forth their initial demands. This session can be
called as a brainstorming, where each party gives their opinion that leads to arguments
and counter arguments.
4. Bargain: The negotiation begins at this stage, where each party tries to win over the
other. The negotiation can go for days until a final agreement is reached. Sometimes,
both the parties reach an amicable solution soon, but at times to settle down the dispute
the third party intervenes into the negotiation in the form of arbitration or adjudication.

5. Settlement: This is the final stage of the collective bargaining process, where both
the parties agree on a common solution to the problem discussed so far. Hence, a mutual
agreement is formed between the employee and the employer which is to be signed by
each party to give the decision a universal acceptance.

Thus, to get the dispute settled the management must follow these steps systematically
and give equal chance to the workers to speak out their minds.