UNIT-III

COLLECTIVE BARGAINING (CB)

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PREAMBLE
Meaning Levels of collective bargaining Definition Salient features of CB Process of collective bargaining Importance of CB Forms of Bargaining Advantages and disadvantages of Structures collective bargaining Union/Management Problems of Relationships
Psychological Aspects

Collective Bargaining

of Collective Bargaining
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MEANING
It

is process where conditions of employment are determined by an agreement between the representatives of the union and the representatives of the employer where employer and employee acts as a group together instead of individuals. The method of reaching an agreement involves proposal, counter proposal, offers and counter offers.
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DEFINITION
It is a mode of fixing terms of employment by

means of bargaining between organized bodies of employer and employee usually acting through organized agents and acting in concern .

Salient Features OF CB
It is a collective process in which representatives of employers and employees participate

mutually. It is a flexible and dynamic process wherein no party adopt a rigid attitude. It is a bipartite process whereas the representatives of workers and management get an opportunity for clear and face to face negotiation. It is a continuous process which can establish regular and stable relationship between workers organisatoin and management
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Salient Features Contd.,

It is a practical way to establish an industrial democracy. It is a good method of promoting industrial jurisprudence. It is good form of interdisciplinary system (i.e. a function embodying economic psychological,

administrative, ethical and other aspects.) It is a process that includes efforts from preliminary preparations to the presentation of conflicting view points, collection of necessary facts, understanding of view points, taking correct decisions etc.
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Importance of CB to society
Collective bargaining leads to industrial peace in the

country. It results in establishment of a harmonious industrial climate which supports, which helps the pace of a nations efforts towards economic and social development since the obstacles to such a development can be reduced considerably. The discrimination and exploitation of workers is constantly being checked. It provides a method or the regulation of the conditions of employment of those who are directly concerned about them.
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Importance of CB to employers
It becomes easier for the management to resolve

issues at the bargaining level rather than taking up complaints of individual workers. Collective bargaining tends to promote a sense of job security among employees and thereby tends to reduce the cost of labor turnover to management. Collective bargaining opens up the channel of communication between the workers and the management and increases worker participation in decision making. Collective bargaining plays a vital role in settling and preventing industrial disputes.
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Importance of CB to employees
Collective bargaining develops a sense of self respect and

responsibility among the employees. It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group. Collective bargaining increases the morale and productivity of employees. It restricts managements freedom for arbitrary action against the employees..

Importance of CB to employees Contd.,

The workers feel motivated as they can

approach the management on various matters and bargain for higher benefits. It helps in securing a prompt and fair settlement of grievances. It provides a flexible means for the adjustment of wages and employment conditions to economic and technological changes in the industry, as a result of which the chances for conflicts are reduced.

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Forms of Bargaining Structures

One company dealing with a single union

Several companies dealing with single union

Several unions dealing with a single company Several companies dealing with several

unions

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Union/Management Relationships
Conflict

Armed truce
Power bargaining Accommodation Cooperation Collusion

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Psychological Aspects of Collective Bargaining

Difficult

because process is an adversarial situation and must be dealt with as such Psychological aspects vitally important

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Levels of collective bargaining

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A) Economy-wide (national)
Bargaining is a bipartite or tripartite form of

negotiation between union confederations, central employer associations and government agencies.
It aims at providing a floor for lower-level

bargaining on the terms of employment, often taking into account macroeconomic goals.

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(b) Sectoral bargaining:

It aims at the standardization of the terms of employment in one industry, includes a range of

bargaining patterns. Bargaining may be either broadly or narrowly defined in terms of the industrial activities covered and may be either split up according to territorial subunits or conducted nationally.

(c) Enterprise Level:

It involves the company and/or establishment. It emphasizes the point that bargaining levels need not be mutually exclusive.
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PROCESS OF COLLECTIVE BARGAINING

1) The negotiation stages,

Preparation for negotiation
Negotiation procedure

Follow up action

2) The contract administration.

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THE NEGOTIATION STAGES contd.,

PREPARATION FOR NEGOTIATION: Negotiations may commence at the instance of either party the workers or the management. While some management expects their Trade union to put forward their proposals, some management put forward their proposals for consideration by the employee representatives.
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THE NEGOTIATION STAGES contd.,

Employer and employee denote great deal of time for the preparation for negotiation on

number of issues. Information on these issues are collected by the management from their association, central government, surveys conducted by research staff and trade union also collects details in the same manner. The HR department set the objectives which are proposed to be achieved through negotiations and which have to be necessarily related to anticipate trade union demands.
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Negotiation technique or procedure

Be friendly in negotiation and relive the existing tension. Be willing to listen Give everyone an opportunity to state his position Know something about the personal history about the other parties representatives. Always do what is right and fair . Both the parties should think rather than feel their way through a problem or grievance.
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Negotiation Technique or procedure Contd.,

Dont attempt to guide the discussion along the straight line let it wander at time dont hurry it. Define each issues clearly and unambiguously with all available facts. Keep membership of the negotiation small to facilitate successful negotiation. Length of the session should be determined by Fatigue, physical and mental ability of the participants. The terms agreed upon should be put in writing

and signed duly by both the parties.

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Negotiation technique or procedure Contd.,

For the management: The management should make sure that the labor leader or the representatives of the workers will negotiate on the matter regarding the employees. Dont use lawyers as negotiators unless they have intimidate knowledge of IR.

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Breakdowns in Negotiations
Third party intervention Union strategies for overcoming breakdowns Management strategies for overcoming breakdowns

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Third Party Intervention

Mediation - neutral party comes in when

impasse has occurred Arbitration impartial third party makes binding decision to settle dispute

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Union Strategies for Overcoming Negotiation Breakdowns

Strikes union members refuse to

work to pressure management in negotiations Boycotts union members agree to refuse to use or buy firms products

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Management Strategies for Overcoming Negotiation Breakdowns

Lockout keep employees out; operate

firm by placing management and nonunion workers in striking workers jobs Hire replacement for strikers

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Follow up action
Agreement should be printed and circulated

among all the employees. The supervisor should be called for meetings for dispersing the agreement so that on behalf of the management they may implement effectively.

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STAGE OF CONTRACT ADMINISTRATION

After the completion of negotiation it is time

to sign the contract by both the parties which is called as an agreement and is nearly the framework for everyday relationship and the bargaining is carried down daily.

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STAGE OF CONTRACT ADMINISTRATION Contd.,

i) Administration of the contract: If anything is important to IR than the contract itself it is the administration of the contract. ii) Responsibility for Administering the terms of contract: a) for union and Management:
Both should co-operate with each other Educate grievance redressal procedure based on the

contract. When grievances reached impasse (stalemate) it should be referred to arbitration. Both the parties should follow rigidly the commitment made by either of the parties. 29

STAGE OF CONTRACT ADMINISTRATION Contd., b) For the management: Management should attend conference/ negotiation to know the changing attitude and problems of employees. Management should not short circuit union representatives before any effect of change is to be made Management should give credit to the unions and strive to treat employees equal.
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STAGE OF CONTRACT ADMINISTRATION Contd.,

c) For trade unions;
Trade union should see that the members

understand the terms of agreement and observe them Trade union should accept for negotiations whenever requested by the management.

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Advantages and Disadvantages of Collective Bargaining

Advantages: Can lead to high-performance workplace where labor and management jointly engage in problem solving, addressing issues on an equal standing. Provides legally based bilateral relationship. Managements rights are clearly spelled out. Employers and employees rights protected by binding collective bargaining agreement. Multi-year contracts may provide budgetary
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Advantages Contd.,
Unions may become strong allies in protecting

higher education from the effects of an economic slowdown. Promotes fairness and consistency in employment policies and personnel decisions within and across institutions. Employees may choose whether they want union representation. A strong labor management partnership may enable the workforce development needed for engaging the technology revolution
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Disadvantages Contd.,
Managements authority and freedom are

much more restricted by negotiated rules. Creates significant potential for polarization between employees and managers. Disproportionate effect of relatively few active employees on the many in the bargaining unit. This is particularly the case when collective bargaining involves a systemwide structure of elections
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Disadvantages Contd.,
Increases bureaucratization and requires longer time needed for decision making. Increases participation by external entities (e.g., arbitrators, State Labor Relations Board) in higher educations decision making. Protects the status quo, thereby inhibiting innovation and change. This is particularly the case when the change involves privatizations. More difficult for employees at smaller

campuses to have their voices heard.

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Disadvantages Contd.,
Higher

management costs associated with negotiating and administering the agreements. Eliminates ability of management to make unilateral changes in wages, hours, and other terms and conditions of employment. Restricts managements ability to deal directly with individual employees. Increased dependence on the private sector for certain services, particularly those requiring technological competence, may be compromised. Contract administration is a very difficult process to manage and significantly changes the skill set required of managers and supervisors.
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Problems of Collective Bargaining

I.

II.

III. IV.

Due to the dominance of outsiders in trade unionism in the country, there is multiplicity of unions which are weak and unstable, and do not represent majority of the employees. Moreover, there are inter-union rivalries, which further hinder the process of collective bargaining between the labor and the management. Trade unions are having political affiliations, they continue to be dominated by politicians, who use the unions and their members to meet their political ends. There is a lack of definite procedure to determine which union is to be recognized to serve as a bargaining agent on behalf of the workers There has been very close association between the trade unions and political parties. As a result, trade union movement has leaned towards political orientations rather than collective bargaining.
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WORKERS PARTICIPATION IN MANAGEMENT (WPM)

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PREAMBLE

Definition management WPM Features WPM Concept Evolution - WPM Different experiments towards wpm Objectives of wpm New scheme on workers Factors influencing participation 1983 WPM Levels of participation The participation of workers in management Forms of workers bill, 1990: participation in
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DEFINITION
Workers participation in management is the

practice in which employees take part in management decisions and it is based on the assumption of commonality of interest between employer and employee in furthering the long term prospects of the enterprise and those working in it

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organizational hierarchy. The participation has to be at different levels of management. i. At the shop level. ii. At the department level. iii. At the board level. The participation incorporates the willing acceptance of responsibilities by the body of workers. The participation is conducted through the mechanism of forums and practices which provide for the association of workers representatives.
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WPM - Features The participation enhances employees ability influence, decision making at different levels

to of

WPM - Concept
The technique of the workers participation in management has been regarded as a powerful

behavioral tool for managing the Industrial Relations system in India. WPM is evolved from the purely ideological and imaginative plank to an organizational reality. For management, It is a joint consultation prior to decision making. The management experts look upon it as, a tool for improving the overall performance of an enterprise.

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Evolution - WPM
From the very beginning of the modern industrial era,

social thinkers were concerned with the problem of the status of workers at the workplace in organization and in the society, and they wanted to protect them against capitalist and managerial exploitation. Workers demanded equal power as that of managers. Ideological View: 1. Advocating workers participation in management. 2. Sharing of a part of managerial power with workers.

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Evolution WPM Contd.,

Outbreak of first world war:

A. Acute industrial unrest was experienced. B. Labour exploitation in countries like, England, Germany, France and USA. C. Labour was regarded as commodity of commerce which was exploited to its maximum. Human Relations philosophy popularized by Elton Mayo. It underscored the importance of human factor in organization. Philadelphia Charter by ILO in 1944. Replacement of Power: Power has been replaced by persuasion.
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Evolution WPM Contd.,

Authoritarianism is replaced by Democracy. Compulsion is replaced by Co Operation. The factory is not a mechanical entity which is governed by

mechanical principles and economic laws, but a social system which is subject to the democratic rights of those who are involved in it. Kurt Lewin Views: The empirical researches by him and others have shown that democratically managed groups, in which each one get an opportunity in decision making. The findings of Likert, Blake and Mc Gregor popularized the beliefs that if workers were given opportunity to participate in management there would be positive gains for the organization through higher productivity.
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Factors influencing WPM The increased use of technology in industry

has necessitated the growing co operation of workers because of the complex operations of production. The changed view that employees are no longer servants but are equal partners. The growth of Trade Unions which safeguard the interests of the workers. The growing interest of the government in the development of industries and the welfare of the workers. The need for increased and uninterrupted production which can be achieved only when there is a contented labor class.
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OBJECTIVES OF WPM
Increasing productivity for the general benefit of the enterprise, the employees and the

community. Giving employees a better understanding of their role. Satisfying the workers urge for self-expression. Achieving industrial peace, better relations and increased co-operation in industry. Development of human personality. Development of leaders from within the industry
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Further classification of objectives

1. Economical Objective. 2. Psychological Objective. 3. Sociological Objective.

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Further classification of objectives Contd.,

Economical Objective: Employees can contribute substantially to the

progress and prosperity of the enterprise. A legitimate right to share equitably in the gains of higher productivity.

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Further classification of objectives Contd.,

Psychological Objective: Recognition of employees non economic needs. Satisfaction of these needs through effective participation. Participation gives the worker a sense of importance, pride and accomplishment. It provides for the integration of their interests with those of the management by making the worker a joint partner in the enterprise.
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Further classification of objectives Contd.,

Sociological Objective: The need for participation arises because modern industry is a social institution with the interest of the owner, the employer. It aims at reducing the number of industrial disputes and creates positive conditions and an atmosphere in which industrial harmony and peace can develop. Participation forges ties of understanding between individuals, leading to better efforts all round.
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Levels of Participation
Information participation:
It ensures that employees are able to receive

information and express their views pertaining to the matters of general economic importance.

Consultative participation:
Here works are consulted on the matters of

employee welfare such as work, safety and health. However, final decision always rests at the option of management and employees views are only of advisory nature.
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Levels of Participation Contd.,

Associative participation:
It is extension of consultative participation as management

here is under moral obligation to accept and implement the unanimous decisions of employees.

Administrative participation:
It ensure greater share of works in discharge of managerial

functions. Here, decision already taken by the management come to employees, preferably with alternatives for administration and employees have to select the best from those for implementation.

Decisive participation:
Highest level of participation where decisions are jointly

taken on the matters relation to production, welfare etc. is called decisive participation.

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Forms of Workers Participation in Management

The forms of workers participation may be as follows: Joint Consultation Model Joint Decision Model Self Management, or Auto Management Scheme Workers Representation on Board

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Forms Of Workers Participation in Management Contd.,

Joint consultation model:

In joint consultation model the management

consults with the workers before taking decisions. The workers represent their view through Joint consultative Committees. This form is followed in U.K., Sweden and Poland.

Joint decision model:

In this form both the workers and management

jointly decide and execute the decisions. This form of participation is followed in U.S.A. and West Germany.
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Forms Of Workers Participation in Management Contd.,

Self management of auto management:

In this model, the entire control is in the hands of

workers. Yugoslavia is an example to this model. Where the state industrial units are run by the workers under a scheme called Self Management or Auto Management Scheme.

Workers representation on board:

Under this method, the workers elect their

representative and send them to the Board to participate in the decision making process.
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Different experiments towards WPM

I) Works Committee: Functions

a) To promote measures for securing and preserving amity and good relations between employers and workmen; b) comment upon matters of common interest or concern c) To endeavor to compose any material difference of opinion between the employer and the workmen in respect of such matters
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Different experiments towards WPM Contd.,

Items which works committees, may normally deal with: Conditions of work, such as ventilation, lighting, temperature etc., Amenities such as drinking water, canteens, dining rooms, crches, rest rooms etc., Safety, and accident prevention, occupational diseases and protective equipment. Educational and recreational activities such as, libraries, reading rooms etc., Promotion of savings. viii) Implementation and review of decisions reached at meetings of works committees.
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Different experiments towards WPM Contd.,

Reasons for failure of Work Committees:
Lack of Interest among workers because only minor

functions are dealt with. Lack of competence shown by the worker representatives on these committees Employees think as substitutes for collective bargaining and bypass the unions Employee consider it as below dignity to sit in these committees. Inter union rivalries Recommendation of this committee are always advisory in nature and need not be implemented.
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Different experiments towards WPM Contd.,

II) Joint Management Councils (1958): Based on ILC recommendation I n 1955 an industrial policy resolution in 1956 and second five year plan in 1957, joint management council came into existence.
Equal number of representatives from management

and employees The size of the joint councils should be restricted to 12 persons. Employees representatives are selected by recognized trade unions Council to be set up at plant level on voluntary basis.
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Different experiments towards WPM Contd.,

Units should employee at least 500 workers. JMC should have recognized trade unions affiliated to

central organizations. Council to work at policy level without encouraging the field of Works committee.
Any member of the joint council could bring

forward items for discussion. The joint councils should meet during working hours,

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Different experiments towards WPM Contd.,

Functions of JMC:

Administration of standing orders Introduction of new methods of production Closure, reduction or cessation of production General economic situation Study on the market Methods of manufacture and work Annual balance sheet Profit and loss statement Long term plan for expansion Redeployment(reorganization)
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Different experiments towards WPM Contd.,

Administration of welfare measures Supervision of safety measures Vocational training Schedule of working hours, break and

holidays Rewards for suggestion.

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 Reasons for unsatisfactory working of JMC:

Different experiments towards WPM Contd.,

Workers representatives felt dissatisfied with their

role as decision makers in welfare matters. Trade union fear employers would weaken unions hold over the workers. Workers not having expertise towards management will become a disadvantage when management discusses complex issues. Management wont be giving enough information to the workers for decision making.
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Different experiments towards WPM Contd.,

III) Workers Directors-1970
Appointment of worker representatives, the board of

directors in the nationalized bank The nationalized bank required to have each directors Workers director- 5 yrs service in a nationalized bank. In 1981 the study proved that the scheme was a failure. Ministry of finance by notification removed those directors from the boards of all nationalized banks.

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Different experiments towards WPM Contd.,

IV) Workers Participation Scheme 1975:
It was the 4th experiment under the central

government scheme. It was voluntary and covered manufacturing and mining industries which include public, private, co-operative and departmentally run enterprises. employing 500 or more workmen. Shop council at shop and floor level. Joint council at the plant level
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Different experiments towards WPM Contd.,

Shop Council:
Whether the joint management council exist or

not , the shop council for each department or for different departments depending upon the strength of the workmen. Equal representation from both employers and employees Employer representatives and employee representatives should be from the union concern. Employers shall decide the number of councils consultation with the trade union or employees.
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Different experiments towards WPM Contd.,

Maximum members not to exceed 12 Decisions should be complemented with in 1

month. Decision of the shop council which relies on other shop will be referred to the joint council Tenure of shop council will be two years Shop council meets once in a month and also whenever necessary. Chairman will be nominated by the management Vice chairman elected by worker member.
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Different experiments towards WPM Contd.,

Functions of shop council: Assist management in

Achieving monthly/early production targets Improving production and deficiency Elimination of wastage Maximum utilization of men and machines Study absenteeism and the steps to reduce it Safety measures Maintain good discipline Physical conditions of working Welfare and health measures.
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Different experiments towards WPM Contd.,

Joint Council:
Units employing 500 or more workers Council will function for 2 yrs Chairman- chief executive of the unit Vice Chairman nominated by workers members

Shall meet once in 3 months and decision on

consensus will be implemented with in 1 month.

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Different experiments towards WPM Contd.,

Function of Joint Council: Deals matters relating to

Optimum production Efficiency Fixing of productivity norms for men and machinery Matters of shop council which remains unsolved Development of skills of workmen Adequate facility for training Preparing schedule of working hours and training Quality of finished goods General health, welfare and safety measures.
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Different experiments towards WPM Contd.,

Advantages of workers Participation Scheme:
Two tire participation Deficiency of shop councils is mandatory and not

advisory The functions of shop council were clearly defined The scheme is flexible and can be adopted to local conditions.

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Different experiments towards WPM Contd.,

Disadvantages of workers Participation

Scheme:
Did not provide participation at the middle levels
Considerable overlapping in the functions of joint

councils and works committee Not clear whether to make decisions, suggestions, shared decisions or access management in implementing decisions. Impractical decisions to put costly machine by the shop council cannot be done by the management
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Different experiments towards WPM Contd.,

NEW SCHEME ON WORKERS PARTICIPATION 1983 Dec 1983 introduced by the government of India Restricted to central PSUs(Public service Undertakings). Operate at shop floor and plant levels Equal representatives from both the parties at both levels. Provision for board level participation Skilled , unskilled, technical, non technical, supervisory, non supervisory to represent at both the levels Representation for women if there are 10% or more among the work force Universal applicability irrespective of the number of

employees employed.

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Different experiments towards WPM Contd.,

Functions of Shop Floor Level:
Production facilities Storage Raw materials storage and purchase Wastes control

Hazard and safety problems

Cleanliness Welfare measures

Working condition
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Different experiments towards WPM Contd.,

Functions of plant Level
Local conditions Planning Implementation and review of Quality and technical

monthly targets Material supply Storage and inventory Housekeeping Encouragement for suggestions Improvement of productivity

improvements Machine utilization Development of new products Matters not solved at shop level Personnel mattersabsenteeism, training programs Welfare and safety.
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Different experiments towards WPM Contd.,

V) Workers shareholders: Making workers as shareholders of the company Workers allowed to pay the purchase money convenient installments for which loans were also provided. INTUC have the opinion that if the workers are given shares they will not have voice or participation in the management. It was not valid in public sectors as the shares were fully owned by the government.
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Different experiments towards WPM Contd.,

VI) Quality circle:

Small group of 5 to 1o workers Volunteers to meet regularly Solve problems affecting the work The circle identifies a problem, develops a solution and presents it to the management. Meets during company working hours once in a week Circle was given recognition for suggestions which have been successfully implemented.
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THE PARTICIPATION OF WORKERS IN MANAGEMENT BILL, 1990:

Introduced in Rajya sabha on may 25th in 1990. FEATURES: The Bill proposed to cover all the industrial establishments or undertakings as defined under the Industrial Disputes Act, 1947. Worker-managerial and non managerial employees Shop floor level shop councils Unit level establishment councils Both councils will have equal representation for the employer and employee. Employer represented by nomination Employee represented by election Tenure of office 3 yrs Number of meetings 4 in a year.
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THE PARTICIPATION OF WORKERS IN MANAGEMENT BILL, 1990 Contd.,

Functions of Shop floor council:
Production facilities Storage Raw materials storage and purchase Wastes control

Hazard and safety problems

Cleanliness Welfare measures

Working condition
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THE PARTICIPATION OF WORKERS IN MANAGEMENT BILL, 1990 Contd.,

Functions of Establishment council:

Evolution of productivity schemes Planning and implementation of monthly targets Encouragement of suggestions Machinery utilization Review of operating expenditure Administration of social security and welfare measures Pollution control Review of working of shop level bodies.
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THE PARTICIPATION OF WORKERS IN MANAGEMENT BILL, 1990 Contd.,

Board of management:
Workmen 13%
Other workmen doing managerial jobs 12%

Punishment :
Imprisonment for 2 yrs or fine of Rs 25000 or both.

Officers under the Scheme:

Inspector appointed for the purpose who will be public servant.

Monitoring Committee: Equal number of members representing 1) appropriate government 2) Employers 3) employees

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