COLLECTIVE BARGAINING

THE CONCEPT
• The term “collective bargaining” extends
to all negotiations that take place between
an employer, a group of employers, or one
or more employer’s organization, on the
one hand, and one or more worker’s
organization on the other, in order to
– Determine the working conditions and terms of
employment; and/or
– Regulate relations between workers and
employers; and/or
– Regulate relations between employers’
organization and workers’ organization
 CHARACTERISTICS
• It is a two-way process. The essence of
collective bargaining lies in the readiness
of the two parties to a dispute to reach an
agreement and mutually settling it.

• It is a continuous process which provides a

mechanism for continuing an organized
relationship between union and
management
 CHARACTERISTICS
• Collective bargaining is not a
competitive process but it is
essentially a complementary
process, i.e. each party needs
something that the other party has,
namely labour can make a greater
production effort and management
has the capacity to pay and organize
for that effort
 CHARACTERISTICS
• Collective bargaining is a negotiation
process and is a device used by
wage-earners to safeguard their
interests. It is an instrument of an
industrial organization for discussion
and negotiation between the two
parties. It is an integral part of
industrial security.
 TYPES OF AGREEMENTS
• Agreements which are negotiated by
officers during the course of conciliation
proceedings and are called Settlements
Under the Industrial Disputes Act.

• Agreements which are concluded by the

parties themselves without referring them
to boards of conciliations and are signed
by them. Copies of such agreements are,
however, sent to appropriate government
authorities
 TYPES OF AGREEMENTS
• Agreements which are negotiated by
parties on voluntary basis when disputes
are sub-judice and are latter submitted
to industrial tribunals, labour courts, or
labour arbitrators for incorporation into
the agreement documents
– The above three types of agreements are
Memoranda of Settlements and are binding
on the parties
 TYPES OF AGREEMENTS
• Agreements which are drawn up
after direct negotiation between
labour and management and are
purely voluntary in character. These
depend for their enforcement on
moral force and on the goodwill and
cooperation of both the parties
concerned
 FUNCTIONS OF COLLECTIVE
BARGAINING
• Collective bargaining acts as a technique of long-
run social change

• Collective bargaining acts as a peace treaty

between conflicting parties

• Collective bargaining creates a system of

“industrial jurisprudence”. It is a method of
introducing civil rights into industries, that is, of
requiring that management be conducted by
rules and regulations rather than by arbitrary
decisions
 PURPOSE OF COLLECTIVE
BARGAINING
• Brings parties closer
• Develops better understanding, industrial peace,
and industrial democracy
• Resolves conflicts and differences
• Guarantees the rights and responsibilities of workers
• Develops self respect and fosters mutual trust
• Brings social change through acceptable solutions
• Formulate terms and conditions under which labour
and management work together
 ISSUES IN COLLECTIVE
BARGAINING
• Interest Issues: refer to wages and
working conditions;

• Rights Issue: concern the

interpretation of dos and don’ts in
the course of an employment
relationship;
 ISSUES IN COLLECTIVE
BARGAINING
• Market relations: are concerned with
wages and working conditions;

• Managerial aspects: have to do with

issues like assignment of work and
adjustment of workforce;
 RULES OF COLLECTIVE
BARGAINING
• Procedural rules: concern mechanisms for
dealing with interpretation and implementation
of agreements as well as resolving conflicts

• Substantial rules: concern the substance of the

agreement in terms of terms and conditions of
employment and control of workforce, their
promotions, transfers, etc.
 ILO CONVENTION
• The Right to Organize and Collective
Bargaining Convention, 1949 states
that:
– Workers must be adequately protected
against acts of discrimination, in particular,
acts calculated to:
• Make the employment of a worker subject to
conditions that he/she does not join a union or
gives up union membership;
• Cause the dismissal or otherwise prejudice a
worker because of trade union membership or
participation in trade union activities
 ILO CONVENTION
– Both worker’s and employer’s organization shall enjoy
adequate protection against acts of interference by each
other or each other’s agents or members, in particular:
• Acts designed to promote the establishment of worker’s
organization under the dominance of employer’s organization;
• The provision of financial or other support to worker’s
organization for the purpose of placing them under the
dominance of employer’s organization
– Ratifying states must take measures to encourage and
promote the full development and use of voluntary
mechanisms of collective bargaining
UNFAIR LABOUR PRACTICES
(a)Refusal by employer to bargain collectively in
good faith with recognized trade unions

(b)Refusal by a recognized trade union to

bargain collectively in good faith with the
employer

(c) Workers and trade union of workers indulging

in coercive activities against the management
• NEGOTIATION is a process in which two or

more parties who have a common or

conflicting interests come together and talk

with a view to reaching an agreement. It is

concerned with purposeful persuasion and

constructive compromise
 KEY ACTIVITIES OF
NEGOTIATION
• Obtaining substantial rules, dividing costs
and benefits, and achieving the goals
dictated by the management and the
members of the trade union

• Influencing the balance of power between

the parties. Balancing the interests of the
management and the workers/members or
even making it a bit favourable towards
the workers
 KEY ACTIVITIES OF
NEGOTIATION
• Influencing the atmosphere. Promoting a
constructive climate and positive personal
relations between the trade union
members on the one hand and the
management on the other

• Reinforcing the position of the trade union

leadership with respect to the workers on
whose behalf the trade union leaders
negotiate
 KEY ACTIVITIES OF
NEGOTIATION
• Influencing the procedures. Developing
procedures that allow people to be flexible
while increasing the chances of reaching a
favourable solution. This is possible when
one is able to identify the interests of the
trade union members. It is important to
note that processes rather than outcomes
are important; temporary gains would be
short lived. But if the processes are
appropriate the trust and understanding
thus generated will prove useful to all
concerned over a longer period of time.
 RESULTS OF NEGOTIATION
• WIN-LOSE: Herein the negotiating parties think
that ‘winning is everything’ or ‘winning is the
only thing’. One party achieves everything and
the other party gains very little.
• LOSE-LOSE: Both parties lose or do not gain
what they want and reflect an attitude of ‘take
it or leave it’.
• WIN-WIN: Both parties get what they want.
Instead of adopting an attitude of ‘winning is
the only thing’, the parties believe in mutual
gain.
 STRATEGIES OF
NEGOTIATION
• Focus on the ‘interest’, not take position

• Focus on the problem, and not

personalize issues

• Be creative and invent multiple solutions

 STRATEGIES OF
NEGOTIATION
• Expand the pie

• Non-specific compensation

• Log rolling

• Reformulate the issues

 STAGES OF NEGOTIATION
• PREPARATION
– Collecting information

– Setting objectives

– Establishing priorities

– Assessing the other party and its case

– Detailing
 STAGES OF NEGOTIATION
• BARGAINING
– There can not be any bargaining if both
parties take a fixed stand and is
unwilling to move from a set position

– Parties should be willing to make

compromises, offer concessions, and
develop packages that are mutually
beneficial
• BARGAINING (contd…)
– If there is a stalemate or a deadlock in
negotiations because either party does
not agree to what the other says or
resorts to threats or bluffs, consider
different ways of dealing with the
situation

– Again, focus on the issues without

personalizing them . Also, focus on the
problem, without taking an a priori
stand
 STAGES OF NEGOTIATION
• CLOSURE AND AGREEMENT
– Keep the following in mind while
concluding an agreement:
• Define the scope of the agreement
• Define the time-frame of the agreement
• Document the agreement clearly in
unambiguous terms
• Specify the conditions, if any, for making the
agreement operational and the consequence
of non-compliance to obligations of both the
parties as a result of the agreement
• Lay down the procedures for dealing with
the problems of interpretation and
implementation
• Take your party members into confidence
and brief them about the content of the
agreement before it is formalized
• If the legal framework so warrants, get the
agreement registered with the competent
authority in the government
• Finally, circulate copies of the agreement
among members
 FACTORS CONTRIBUTING TO
SUCCESS/FAILURE OF COLLECTIVE
BARGAINING
• Knowledge/awareness, and skills as
ingredients in the process of
collective bargaining. This requires
adequate worker’s education, both in
content and process, so that workers
are not unprepared
• Centralization, decentralization, and
delegation: Collective bargaining fails
when there is no delegation of power
and authority is centralized.
 FACTORS CONTRIBUTING TO
SUCCESS/FAILURE OF COLLECTIVE
BARGAINING
• Use of proper language and decorum is
essential for the success of collective
bargaining
• Political considerations that override the
issues in hand can often lead to the failure
of collective bargaining
• Collective bargaining can be credible and
sustainable only if there is complete
honesty, transparency, and mutual trust
between the bargaining parties
 CONDITIONS FOR MUTUAL
GAINS
• A favourable political climate and
institutional framework that encourages
collective bargaining
• Recognition of the rights of
organization and collective bargaining
• Strong and well developed unions of
workers and employers
• Recognition of unions
 CONDITIONS FOR MUTUAL
GAINS
• Goodwill on both sides
• Willingness to find common interests
• Realization of interdependence within
and between the parties concerned
• A balance of power between parties
because negotiation between parties with
power differences can not produce fair
results
• Acting in good faith
• Mutual respect
• A desire for mutual gains