Collective Bargaining

INTRODUCTION OF COLLECTIVE BARGAINING It is made up from two words collective which means group and bargaining which means proposals and counter proposals.

it is a process in which the representatives of a labour organization & the representatives of business organization meet and attempt to negotiate a contract or agreement, which specifies the nature of employee-employer union relationship.

Meaning of Collective BargainingCollective Bargaining is a system and a technique of resolving an industrial dispute through negotiations between employers and the representatives of employees without any help of an arbitrator.Collective bargaining is that arrangement whereby the wages components of remuneration and conditions of employment of workman are settled through a bargain between the employer and the workman collectively whether represented through their union or by some of them on behalf of all of them.

COLLECTIVE BARGAINING IS AN AGREEMENT

BETWEEN A SINGLE EMPLOYER OR AN ASSOCIATION

OF EMPLOYERS ON THE ONE HAND AND A LABOUR

UNION ON THE OTHER, WHICH REGULATES THE

TERMS AND CONDITIONS OF EMPLOYMENT TUDWIG TELLER

DEFINITION

DEFINITION COLLECTIVE BARGAINING IS A PROCESS OF DISCUSSION

AND NEGOTIATION BETWEEN TWO PARTIES, ONE OR BOTH OF WHOM IS A GROUP OF PERSONS ACTING IN

CONTEST. MORE SPECIFICALLY IT IS THE PROCEDURE

BY WHICH AN EMPLOYER OR EMPLOYERS AND A GROUP

OF EMPLOYEES AGREE UPON THE CONDITIONS OF

WORK (THE ENCYCLOPEDIA OF SOCIAL SCIENCE)

Collective: Collective bargaining is a two way group process where the employers representative and employees representatives sit together to negotiate terms of employment. Strength: Both the parties in collective bargaining are strong and equal.Voluntary: Both parties come to the negotiation table voluntarily in order to go in particular negotiation. It is based on discussion, mutual trust and understanding.Formal: It is a formal process in which certain employment related issues are to be regulated at National, organization and workplace levels.Flexible: It is a flexible and continuous process and not fixed or static. Improvement: It is a method to improve the employer-employees relation in organization and resolve management and employees conflicts.

FEATURES / CHARACTERISTICS

Representation: Collective bargaining is between the representatives of employees and management. The management does not directly deal with employees. It carries negotiations with the representatives/executives of unions and association.

Dynamic: Collective bargaining is dynamic, that go on changing over a period and grows and expand the way of agreement, the way of implementation and way of discussion.

Continuous: Collective bargaining is continuous and begins with agreement, the implementation of agreement and further negotiations.

Bipartite Process: Because the employee and employers representatives negotiate directly face to face across the table.

FEATURES / CHARACTERISTICS

Issues / Scope of collective bargaining1. Wages and working conditions2.Work norms3.Incentive payments4.Job security5.Changes in technology6.Work tools, techniques and practices7.Staff transfers and promotions8.Grievances9.Disciplinary matters10.Health and safety11.Insurance and benefits12.Union recognition13.Union activities/responsibilities14.Management rights

IMPORTANCE of CB Improvement in the condition of workers

Check on the autocracy in the industry.

Promotion of lasting industrial peace.

Conducive to Managerial Efficiency: contribute towards improving managerial efficiency.

Development of the Industrial Rules

Significance for society and Economy

Purpose of collective bargainingBrings parties closerDevelops better understanding, industrial peace and democracyResolve conflict and differencesDevelop self respectBring social change through acceptable solutionsGuarantees the right and responsibilities at the workersFormulate terms and conditions under both parties will work together.

23-6Types of Bargaining Four distinctive types of bargaining have evolved, namely;Conjunctive or distributive bargaining: where both parties try to maximise their respective gains.Cooperative bargaining: where both parties yield ground to the other to get ahead and resolve knotty issues.Productivity bargaining: where the wages and benefits of workers are linked to productivity.Composite bargaining: where labour bargains not only for wages but goes a step further and demands equity in other matters relating to work norms, employment levels, etc in return for agreeing to the tight productivity norms set by management. Collective Bargaining

Prof. Butlerhas viewed the functions as:

Collective bargaining as a process of social change

Collective bargaining as a peace treaty

Collective bargaining as an industrial jurisprudence Functions and Principles of Collective Bargaining

1. Collective bargaining as a process of social change

Collective bargaining enhances the status of the working class in the society. Wage earners have enhanced their social and economic position in relation to other groups. Employers have also retained high power and dignity through collective bargaining.

2. Collective bargaining as a peace treaty

Collective bargaining serves as a peace treaty between the employers and employees. However the settlement between the two parties is a compromise.

3 Collective bargaining as an industrial jurisprudenceCollective bargaining creates a system of Industrial Jurisprudence. It is a method of introducing civil rights into industry. It establishes rules which define and restrict the traditional authority exercised by employers over their employees placing part of the authority under joint control of union and management.Functions and Principles of Collective Bargaining

In addition to the above, its functions include:

Increasing the economic strength to employers and employers.

Improving working conditions and fair wages.

Maintaining peace in industry

Prompt and fair redressal of grievances.

Promoting stability and prosperity of the industry.

Functions and Principles of Collective Bargaining

Pre-requisites for collective bargaining: Effective negotiations and enforcement requires a systematic preparation of the base or ground for bargaining which involves the following three steps:

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. 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. 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.

Levels At Which Collective Bargaining Is Undertaken

Forms of Bargaining StructuresOne company dealing with a single unionSeveral companies dealing with single unionSeveral unions dealing with a single companySeveral companies dealing with several unions

Problems of Collective Bargaining

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 labour and the management.

Since most of the 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 recognised to serve as a bargaining agent on behalf of the workers

In India, the law provides an easy access to adjudication. Under the Industrial Disputes Act, the parties to the dispute may request the Government to refer the matter to adjudication and the Government will constitute the adjudication machinery, i.e., labour court or industrial tribunal. Thus, the faith in the collective bargaining process is discouraged.

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.

Collective Bargaining ProcessIn many companies, agreements have a fixed time scale and a collective bargaining process will review the procedural agreement when negotiations take place on pay and conditions of employment.

PROCESS OF COLLECTIVE BARGAINING

23-7The Process of Collective Bargaining Steps in the collective bargaining process Collective BargainingIdentification of the problemCollection of dataSelection of negotiatorsClimate of negotiationsBargaining strategy and tactics Conflict based Armed treaty Power bargaining Accommodation CooperationFormalising the agreementEnforcing the agreement

Collective Bargaining ProcessPreparing for NegotiationBargaining IssuesPreparing for NegotiationReaching the AgreementNegotiation Breakdowns?Ratifying the AgreementAdministration of the AgreementOvercoming BreakdownsEXTERNAL ENVIRONMENTINTERNAL ENVIRONMENTYesNo

Collective BargainingThis phase involves composition of a negotiation team. The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employers representatives and the union examine their own situation in order to develop the issues that they believe will be most important. A correct understanding of the main issues to be covered and intimate knowledge of operations, working conditions production norms and other relevant conditions is required. 1. Prepare

Collective Bargaining2. DiscussThe parties decide the ground rules that will guide the negotiations.An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached.

Collective Bargaining3. Propose It involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as brainstorming. The exchange of messages takes place and opinion of both the parties is sought.

Collective Bargaining4. Bargain Negotiations are easy, if a problem solving attitude is adopted. This stage comprises the time when what ifs and supposals are set forth and the drafting of agreements take place.

Collective Bargaining5.SettlementFormalising the agreement : Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. Enforcing the agreement : This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.

Problems of Collective Bargaining 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.

Collective bargaining is a democratic method of regulating the terms & conditions of employment. It is a voluntary process without any third party intervention.Collective bargaining leads to mutual understanding between the employers and workers.Collective bargaining provides a flexible means of adjusting wages & conditions of employment to changes in economic, social, technological & political environment. Under collective bargaining, basic standards are fixed and every worker knows that he cannot be required to work under conditions less favourable than those stipulated in the agreement.Collective bargaining facilitates better implementation of decisions due to the direct involvement of both the parties. Parties know that the decisions are their own & nobody has imposed them.

Since wages of the workers are pre decided under collective bargaining, hence there are no performance based wages.Indian Labour owing mostly to ignorance or illiteracy, is not capacitated with the responsibility to sit and discuss in the course of Collective bargaining.Collective bargaining lacks representation of the public interest at the bargaining table. When unions and companies agree on wage increase, it might cause rise in price; then the consumer will have to shoulder the full burden of their agreement.Collective bargaining leads to wage drift. Wage drift leads to higher wage costs for employers and higher inflation within the economy, which in turn leads to higher interest rates and lower investment.

A favourable political climate Government should remove all legislative restrictions which hamper collective bargaining. Freedom of association It can be facilitated by leaving workers & employers free from associations as they please. Employees should be free to form trade unions as they are required to bargain with the employer on equal basis.Stability of trade unions If a union is weak & unstable, employers will refuse to recognize it or negotiate with it. Union should exercise authority over its members & its membership should be sufficiently stable.Recognition of trade unions Both employer & employees should give recognition to representative trade unions. Recognition improves industrial relations & this may react favourably on productions.Willingness to Give & Take One side should agree to reduce its demand on one item in return for some concession by the other side. Mutual Recognition & Respect Management has the right to manage & Union has the right to organize itself & fight for justice. This must be fully recognized and accepted by both sides.

Conditions For Successful Collective Bargaining

FACTORS AFFECTING CB

1. Use of contingency worker and employee leasing. 2.Technological changes 3.International forces- less expensive foreign worker. 4.Economic conditions 5.Heavily governed by its political forces and legal regulations

STRATEGY FOR COLLECTIVE BARGAINING

For a successful and effective collective bargaining, a tactful and focused strategy needs to be formulated. Few important suggestions that must be kept in mind before framing a good strategy: Unions should be made strong by creating awareness among workers. Interference of political leaders should be avoided. The unions should separate themselves from politics. Government should make efforts for the growth of collective bargaining. Adjudication should be used only as a last resort, Government can make legislation for compulsory collective bargaining before resorting to adjudication.

STRATEGY FOR COLLECTIVE BARGAINING

For a successful and effective collective bargaining, a tactful and focused strategy needs to be formulated. Few important suggestions that must be kept in mind before framing a good strategy:Management should develop a positive attitude towards unions.

Much headway has already been made in this direction.

Presently, managers are mostly aware of the rights of workers.

They are also realizing how important is cooperation between

management and workers for the effective functioning of an

organization. As such, they are now encouraging negotiations

and amicable solutions.

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