Questions of Labour Relation and Collective Bargaining

1. Define Collective Bargaining and why it is important to employees and employers?

Ans:

 Collective bargaining is the process in which working people, through their unions, negotiate contracts with their
employers to determine their terms of employment, including pay, benefits, hours, leave, job health and safety
policies, ways to balance work and family, and more. Collective bargaining is a way to solve workplace problems.
It is also the best means for raising wages in America. Indeed, through collective bargaining, working people in
unions have higher wages, better benefits and safer workplaces.

 The term collective bargaining refers to the negotiation of employment terms between an employer and a group
of workers. Employees are normally represented by a labor union during collective bargaining. The terms
negotiated during collective bargaining can include working conditions, salaries and compensation, working
hours, and benefits. The goal is to come up with a collective bargaining agreement through a written contract.12
According to the International Labor Organization, collective bargaining is a fundamental right for all employees.

Importance 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 management’s freedom for arbitrary action against the employees. Moreover, unilateral actions by the
employer are also discouraged.
• Effective collective bargaining machinery strengthens the trade unions movement.

Importance 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.

2. What was the main reason behind the establishment of NLRA in the United State in 1933 and what was the
Wagner Act?

After the National Industrial Recovery Act was declared unconstitutional by the Supreme Court, organized labor was again
looking for relief from employers who had been free to spy on, interrogate, discipline, discharge, and blacklist union
members. In the 1930s, workers had begun to organize militantly, and in 1933 and 1934, a great wave of strikes occurred
across the nation in the form of citywide general strikes and factory takeovers. Violent confrontations occurred between
workers trying to form unions and the police and private security forces defending the interests of anti-union employers.

In a Congress sympathetic to labor unions, the National Labor Relations Act (NLRA) was passed in July of 1935. The
broad intention of the act, commonly known as the Wagner Act after Senator Robert R. Wagner of New York, was to
guarantee employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively
through representatives of their own choosing, and to engage in concerted activities for the purpose of collective
bargaining or other mutual aid and protection.” The NLRA applied to all employers involved in interstate commerce except
airlines, railroads, agriculture, and government.

3. How does NLRA define and prohibit the unfair labour practices?

The NLRA defines and prohibits five “unfair labor practices”:

1) interference with employees’ concerted activity;

2) employer domination of a labour organization;

3) discrimination against workers for union activity;

4) retaliation against workers for filing unfair labor practice charges;

5) refusal to bargain.

4. Why Karil Marx ideas are opposite to other Classical Economists in respect to Labour Union?

Karl Marx believed in the labour theory of value to explain relative differences in market prices. This theory stated
that the value of a produced economic good can be measured objectively by the average number of labor hours
required to produce it.

5. What are the basic functions of Collective Bargaining? Explain all in details.

• 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.

• Peace Treaty: Conflicts are smoothened by the compromises.

a) Compromise with Combative(Struggling) Aspects.

b) Compromises without Combative aspects.

• 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.

6. Explain four pre-requisites for Collective Bargaining?

 Sufficient Authority to those who negotiate on behalf of Management:

The management should be Careful in selecting the negotiating team. This is very essential for Collective
Bargaining process.

The team members from Management should be mixed composition of production, finance and industrial
relation managers.

 Willingness to “give and take : Collective bargaining, like all other bargaining, is a process for mutual
benefit and advantage of the parties.

Collective bargaining can be successful only when there is an attitude of willing compromise. The trade unions
should refrain from putting toward exaggerated demands.

Both the parties must realize that collective bargaining negotiations are by their very nature a part of
compromise process.

 To listen Carefully & attentively :

The necessary for both party to have open minds to listen and appreciate the others concern and point of view
and to have some flexibility in making adjustments to the demand made.

 To do proper ‘Home work’:

The need to study adequately or do ‘Home work’ on the demands presented i.e. to gather data on
wages and welfare benefits in similar industries in the geographical area.

 Trade unions should be concerned with quantity and quality of work :

Trade unions should equally be concerned with both quantity of work as agreed upon and quality of work both
leading to benefit to the firm and its product / services.

7. Elaborate the various types of Collective Bargaining in the light of examples?

Conjunctive or Distributive Bargaining:

It involves zero-sum negotiations, in other words, one side wins and the other loses. Both parties try to
maximize their respective gains.

They try to settle economic issues such as wages, benefits, bonus, etc.

For example, unions negotiate for maximum wages and the management wants to yield as little as possible.

2. Cooperative/ Integrative Bargaining:

Integrative bargaining is similar to problem solving sessions in which both sides are trying to reach a mutually
beneficial alternative, i.e. a win-win situation.

Both the employer & the union try to resolve the conflict to the benefit of both parties.

Both sides share information about their interests and concerns and they create a list of possible solutions to
best meet everyone’s needs.

3. Productivity Bargaining:

The process of reaching an agreement (productivity agreement) through collective bargaining whereby the
employees of an organization agree to changes which are intended to improve productivity in return for an
increase in pay or other benefits.

4. Composite Bargaining:

Workers believed that productivity bargaining agreements increased their workloads. Rationalization,
introduction of new technology, tight productivity norms have added to this burden and made the life of a worker
somewhat uneasy.

As an answer to such problems, labour has come in favor of composite bargaining.

In this method, labour bargains for wages as usual, but goes a step further demanding equity in matters relating
to work norms, employment levels, manning standards and environmental hazards etc.

8. When does collective Bargaining occur and who can collectively bargain?

Employees and employers engage in collective bargaining to negotiate new contracts and renegotiate existing
contracts that have expired. In 2015 alone, an estimated of five million men and women are engaged in the
collective bargaining process.

The National Labor Relations Act (NLRA) grants most private sector employees the right to organize unions and
collectively bargain.

The Railway Labour Act (RLA) provides railway and airline employees the right to form unions and engage in
collective bargaining.

9. What issues can employees bargain over?

The bargaining subjects divided into three categories: Mandatory, Permissive, and illegal.

Mandatory subjects, broadly speaking, relate to wages, hours, pensions, healthcare and working conditions.
Employers cannot refuse to bargain over these subjects, and negotiations may continue to the point of mediation
or strike.

Permissive subjects are non-mandatory subjects of bargaining, meaning employers are not required to bargain
over them. Use of union labels is an example of a permissive bargaining subject.

Finally, illegal bargaining subjects are those that violate the NLRA, such as a closed-shop provision in a right -to-
work state.

10. How do you explain the process of Collective Bargaining in a systematic manner?

Actually, there exist no specific process for collective Bargaining. Every organization prepare their own process
of collective Bargaining. However, following process are generally followed by most of the organizations.

1. Preparing climate: First of all ,Organization should try to create good climate. Management should try to
establish mutual trust and confidence relationship.

2. Recognition of the Bargaining Agents:

A person or employers' organization accredited by the Labour Relations Board and/or authorized by an
employer member to bargain on its behalf.

Or a bargaining agent is a union certified by the Labour Relations Board as the exclusive agent of a group of
employees of an employer.

 In those organizations where single trade union is granted recognition to represent the workers. But where
there is more than one union, any of these criteria may be used:

• Election of the representative union by secret ballot;

• Selection through verification of membership by some government agency.

Bargaining with a joint committee of all major unions.

• Bargaining with a negotiation committee in which different unions would be represented in proportion to their
verified membership

• The secret ballot system is widely used in countries like the USA, West Germany, etc.

In short ,the bargaining agents should consist of members who have balanced views, analytical mind and
objective outlook.

Though more formal in nature, the collective bargaining process is not much different from everyday negotiations
between parties, like the process of buying a car. Bargaining commonly begins with employees coming together
with their union to determine and prioritize a set of demands they have for their employer.

11. What happens when management and labour don't agree?

If management and labour cannot reach agreement on a mandatory subject, they are said to be at impasse. At this point,
management may unilaterally implement its final offer. Alternatively, both sides can agree to engage in a mediation
process where a federal or private mediator or arbitrator helps the parties work to an agreement.

In the private sector, economic pressure typically occurs in the form of a strike or lockout. Such actions are relatively rare,
though, as it is the threat of a work stoppage that pushes the opposite side toward agreement.

In the public sector, employees may only strike if allowed to do so by the relevant law. Federal law prohibits strikes by
federal employees, while state and local laws vary.

As of March 2014, only 12 states allow teachers to go on strike.

Some states, like Pennsylvania, prohibit strikes by emergency workers (police officers, firefighters and prison guards).

12. what are the merits of collective bargaining?

 Improves wages

 Can be a tool for aligning wages and productivity

 Enables negotiation of working time arrangements that balance workers’ interests in a work/life equilibrium, with
employers’ interests in flexible working time

 Can enhance access to social insurance

 Can facilitate job security and employment protection

 Creates opportunities for workplace participation (voice)