COLLECTIVE BARGAINING : CASE STUDYSummary R.K.Brewery limited produces four varieties of beer as well as mineral water. The company entered a collective agreement with the trade union in 2005 which would be in force for five years up to the end of 2010. There was a collective agreement with a fixed salary fora group of employees performing the same job. MrVinod Michael joined R.K.Brewary as chief HR manager in 2007. He analysed the agreement and felt that to enhance the productivity beyond the current level, performance based salaries with a base line should be adopted.Cont... The CEO accepted the idea reluctantly as the trade union may create problems. MrVinod implemented the scheme in 2008. The scheme worked beyond expectation,as the productivity increased by 30% in addition to improvement in quality and delivery schedule.The salaries of 80% employees increased by 20% to 30% and surprisingly the membership of trade union declined to around 45% by 2009. In the view of expiry of collective agreement ,on 31% dec 2010 trade union requested management to arrange a collective bargaining meeting as they were worried for salary differential causing social problem among employees and their family members,. Cont... MrVinod discussed the issue with the ceo and senior level managers in a meeting.There were mixed arguments and responses in the meeting. Finally MrVinod took a decision of implementing bargaining or negotiations with individual employees regarding salaries,benefits,working conditions and all other issues of HR.Theorotical framework Collective bargaining Collective bargaining is a process of negotiation between employees and a group of employers aimed at agreements to regulate working salaries.The interest of the employees are commonly presented by repreentatives of a trade union to which the employees belong.The collective agreements reached by these negotiations usually set out wage scales ,working hours,training,health and safety,avertime,grievence mechanisms and rights to participate in workplace or company affairs.The union may negotiate with a single employer or may negotiate with a group of busineses,depending on the country,to reach an indutry wide agreement.A collective agreement functions as a labour contract between an employer and one or more unions.Collective bargaining conisis of the process of negotiation between repreentatives of a union and employers in respect of the terms and conditions of employment of employees, such as wages, hours of work,working conditions etc...Statement of the problem * Sudden change in the policies of the company. * Encounter from trade union. * Keeping trade union away may cause issue in the future.Solutions 1.Its better to keep a friendly treaty with the trade union so as to remove a future encounter from there part.SWOT * STRENGTH 1.A support from the trade unions will build up a political as well as legal strength within the society. 2.Unexpected strikes and protest from the employees won’t be there.Cont... * WEAKNESS Overinfluence of trade union can cause negetive impacts to the business and company policies.Cont... * Opportunity A good relationship among the trade union may result in the betterment of the employees , there by increasing salary and job opportunities.Cont... * THREAT Trade union may over command there demands and make the company force to accept it at any circumstances.1.Why did Mr.Vinod take such a decision deviating from the established practice of collective bargaining and collective agreements?* Vinod analysed the collective agreement with a fixed salary of group of employees performing the same job.He felt that it would be difficult to enhance the productivity beyond the current level,though competition demands increase in productivity atleast 25%, in addition to improvement ina quality and delivery scheduled. * Vinod also felt that there is no need for collective bargaining meeting as well as collective agreement as the salaries and benefits are based on individuals performance of employees.2. What would be the possible reaction and response from the trade union?* Monetary motivation for any worker Is very important, if it is in his favor.But here salaries of only 80% employees were increased by 20% to 30% and surpriingly the membership of trade union declined to around 45% by 2009. * Thus trade union were worried about increase in salary of remaining 20% employees and majority of its members.Also it caused social problems among the employees and their family members.They requested the management to make an arrangement for collective bargaining meeting and arrive at new agreement during the 2" week of January 2009,in the view of expiry of collective agreement by 31% december 2010.