Collective Bargaining

Concept, functions and position in India

Concept
 a type of negotiation
used by employees to
work with their
employers.
 workers'

representatives approach
the employer
 he attempts to negotiate a

contract which both

sides can agree with.
  The workers are
collectively organised in a
trade union which
negotiates on their behalf
with the management.
 The object of Collective
Bargaining is to include a
Collective Agreement.
  Typical issues covered in
the agreement are hours,
wages, benefits, working
conditions, and the rules of
the workplace.
 Definition

 The I.L.O. defines collective bargaining:

 "As negotiations about working conditions and
terms of employment between an employer, or a
group of employers, or one or more employers'
organisations, on the one hand, and one or more
representative workers' organisation on the other
with a view to reaching agreement.”
Why is the Bargaining “ Collective”?
 Unitarian approach not possible.
 A balance can only be achieved
where the workers interest is
supported by collective
organisation and representation.
 A balance of influence and
strength can provide a more
solid foundation for partnership
and co-operation within, or
parallel to, the collective
bargaining system.
 Features
  Collective: 
o Workers collectively bargain for their common
interests and benefits.
o Workers and management jointly arrive at an
amicable solution through negotiations.
 Strength:
o With industrial democracy at work, both the
parties bargain from the position of equal strength.
 Features
  Flexible:
o CB cannot be rigid or inflexible as its’ aim is to arrive
at a consensus
  Voluntary:
o Both the parties negotiate voluntarily in order to have
a meaningful dialogue.
o Through negotiations, they try to probe each other’s
views thoroughly before arriving at an acceptable
solution.
o The implementation of the agreement resulting from
such a bargaining process is also voluntary.
 Features
 Continuous:
o This process begins with negotiations but does
not end with an agreement.
o Implementation of such an agreement, which is
an on-going process, is also a part of CB.
 Bi-partite process:
o This process does not have third party
intervention.
 Features
  Power relationship:
o Each party wants to extract the maximum from
the other.
o To reach a consensus, both have to retreat from
their original positions and accept less than what
is asked for and give more than what is on offer.
o While doing so, the management tries to retain
its control on workplace matters and unions
attempt to strengthen their hold over workers
without any serious dilution of their powers.
 Features
  Representation:
o The participants in CB do not act for themselves.
o They represent the claims of labour and
management while trying to reach an agreement.
o Each participant is an authorized representative of
workers and employers.
  Dynamic:
o The whole process of CB is influenced by the
mental make-up of the parties involved.
o As a result, the concept of CB changes, grows,
and expands over time.
Importance
 It helps increase the economic
strength of both the parties at
the same time protecting their
interests.
 It helps establish uniform
conditions of employment with
a view to avoid occurrence of
industrial disputes.
 It helps resolve disputes when
they occur.
 It lays down rules and norms for
dealing with labour.
 It helps usher in democratic
principles into the industrial
Factors affecting Bargaining Strength
 Types of Bargaining
• Wages, bonus, • Better
incentives working
conditions,
job
evaluation.
integrative
distributive

attitudinal Intra-
organisation

• To build trust and co- • To direct the

operation entire work
force towards
growth.
Process
 Process
 Identification of the problem
 Is the problem important?
 Is the problem minor?
 Preparation for negotiation
 Selection of representatives
 Education of the representatives
 Fixing up the date and time for negotiation
Process
 Negotiating members : Chief
Negotiator (Management) and the
representatives from both the side.
 While negotiating, each party has
to pay attention to the view points
of the other party.
 Both parties try to reach an
amicable solution
Process
 Formation of a written agreement.
 Agreement might be temporary,
with an expiry date.
 Re-consultation before expiry
 Further negotiations.
 Thus, CB is a continuous process.
 Bargaining Impasse
 So, what happens when one party doesn’t agree
with the demands of the other?
 An impasse occurs , leading to these situations.
1. Mediation, arbitration or fact-finding
2. Labour strikes and work stoppages
3. Employer shows force to suppress demands.
 Indian Scenario
o In India, trade unions gained prominence much later – only after 1900.
o In 1918, Gandhiji - as the leader of the Ahmedabad textile workers-advocated the
resolution of conflict through CB agreements.
o But the idea gathered interest only after the Second World War.
The Government of that time took steps like setting up of machinery for negotiations,
conciliation and arbitration.
o The trade union movement and also CB agreements became popular after Indian
independence.
Such agreements spread to industries such as chemicals, petroleum, tea, coal, oil and
aluminum.
In ports and docks, banking and insurance, collective agreements were arrived at,
right at the national level.
Assessment of Collective Bargaining in India:
o Other than in Ahmedabad and Mumbai, so far, collective agreements have not
made much headway in India.
 Reasons
  Lack of statutory recognition of unions by the
country as a whole.
 Lack of provisions requiring employers and
workers to bargain in ‘good faith’.
 The historical problem of ‘lack of trust’
between the parties 
 Suggestions
  Recognition of trade union has to be determined through
verification of fee membership method. The union having more
membership should be recognised as the effective bargaining agent. 
 The State should enact suitable legislation providing for
compulsory recognition of trade union by employers. 
 Section 22 of the Trade Unions Act, 1926 should be amended. 
 The provision for political fund by trade unions has to be done
away with-since it unvariably encourages the politicians to prey
upon the union.
  State has to play a progressive role in removing the pitfalls which
stand in the way of mutual, amicable and voluntary settlement of
labour disputes.