Collective Bargaining

Meaning
 Collective bargaining is a process of negotiation between
employers and a group of employees aimed at agreements to
regulate working salaries, working conditions, benefits, and other
aspects of workers' compensation and rights for workers.

 the ongoing process of negotiation between representatives of

workers and employers to establish the conditions of
employment. The collectively determined agreement may cover
not only wages but hiring practices, layoffs, promotions, job
functions, working conditions and hours, worker discipline and
termination, and benefit programs.

 Collective Bargaining is the agreement between the a single

employer or an association of the employers on the one hand and
labor union on the other
 Definition

o Edwin Flippo- “Collective Bargaining is the processes in which the

representative of a labor organization and the representative of the
business organization meet and attempt to negotiate a contract or
agreement.”

o Michael Jucius – “ Collective Bargaining refers to a process by which

employers on the one hand & representatives of employees on the
other, attempt to arrive at agreements concerning the conditions under
which employees will contribute & be compensated for their services.”

o Richardson – “ Collective bargaining takes place when a number of

work-people enter into negotiation as bargaining unit with an
employer or group of employers with the object of reaching an
agreement on the conditions of employment of work-people.
 Features of Collective Bargaining

1. Collective Process / Two Party – Collective Bargaining is a group and collective

process wherein the workers or employees bargain for their common interests and
benefits so that they and the management jointly can arrive at an amicable solution
through negotiations.

2. Continuous Process – It is a continuous process which establishes regular and stable

relationship between the parties involved. It is a day-to-day process of bargaining
between the two parties.

3. Equal Strength – The bargaining strength of both the parties across the table is the
same. Both the workers and the management bargain from a position of equal strength.

4. Flexible and Not Rigid – Both the parties have to adopt a flexible approach throughout
the process of bargaining. They can’t be rigid while negotiating, otherwise results will
not be achieved.
5. Common Point – A special feature of this process is that both the
parties start negotiating from completely divergent views but
eventually reach a middle point, which is acceptable to both the
parties.

6. Dynamic Process – Collective bargaining is a relatively new concept

and is expanding. The way, both the parties discuss, argue and arrive
at a common point keeps on changing.

7. Power Relationship – In order to arrive at a common point of

agreement, both the parties – management and workers have to dilute
some of their powers. Workers want to gain maximum from the
management and management wants to extract the maximum from
workers by paying as little as possible. To reach a solution, both have
to retreat from their positions and accept less than what is asked for
and give more than what is offered.
8. Bipartite Process – This means that both the management and
the workers negotiate over the issues directly, face to face
across the table without any third party intervention.

9. Voluntary – Collective bargaining is a voluntary process on the

part of both the management and the workers. Both of them
come to the bargaining table out of their own wish to have a
meaningful discussion on their issues.

10.Complementary Process – It is a complementary process in the

sense that each party needs something that the other party has
e.g. labour can increase productivity and management can pay
better for their efforts.
 Objectives
1. To promote cordial and harmonious relations between the
employer and the employees.

2. To protect the interests of both employer and employee.

3. To foster industrial democracy.

4. To keep the third party at bay.

5. To ensure that trade union is given due recognition.

6. To prevent unilateral action of management.

7. To arrive at mutually beneficial settlement.

 Types of Collective Bargaining

Distributive

Integrative
Types Of
Collective
Bargaining
P
r
o
d
uComposite
c
Distributive or Conjunctive Bargaining
 Conjunctive bargaining is the most common type of
bargaining & involves zero-sum negotiations, in other
words, one side wins and the other loses.
 This involves bargaining over the distribution of surplus. in
this, economic issues like salaries , wages and bonuses.
 Economic issues like wages, salaries and bonus are discussed.
 One party’s gain is another party’s loss.
 More competitive.
 e.g. Unions negotiate for maximum wages.
Integrative or Co-operative 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 parties may gain or neither party losses.
 Both the parties are trying to make more of something.
Productivity Bargaining
 A form of collective bargaining leading to a productivity agreement
in which management offers a pay raise in exchange for alterations
to employee working practices designed to increase productivity.
 Productivity bargaining involves both parties negotiating around
productivity and pay. So unions may suggest that higher salaries
would boost productivity. However, this is unknown to the
business. So target-orientated bonuses may be suggested, or new
ways of improving the process.
 Simply put, productivity bargaining is where the two parties look to
agree to changes that would boost productivity in return for higher
wages or other benefits.
Composite Bargaining
 Composite bargaining refers to a negotiation that focuses on a number
of elements that are not related to pay. They are generally related to
employee welfare and job security. For instance, it covers factors such as
working conditions, policies, recruitment, and disciplinary processes.
 Workers believe that productivity bargaining agreements increased their
workload which adds burden and make their life uneasy.
 According to workers, wages, bonus and other monetary benefits continue
to occupy the center-stage in the bargaining sessions, but there is a
definite shift towards composite bargaining.
 Unions are happy as their power is not diluted and employers too think,
that this is lesser evil than strikes and lockouts.
 This situation may not continue for a longer time
 Process of Collective Bargaining

Preparatory Discussion Proposal

phase phase phase

Settlement Formalizing
Bargaining
phase agreement
Enforcing
agreement
Preparatory Phase
In this phase, following activities are carried out :-
 Selection of negotiation team:-
 This phase involves composition of a negotiation team.
 It consist of the representatives of the both parties.
 They should have adequate knowledge and skills for the
negotiation.
 Identification of problem.
 Enough supporting data is kept ready
 Discussion Phase
 Decide and appropriate time and set a proper climate for
negotiation.
 Maintenance of mutual trust and understanding.
 Involve in active listening, asking questions, observation
and summarizing decision.
 Proposal Phase

 This phase could be described as brainstorming‘. The exchange

of messages takes place and opinion of both the parties.
 Initial opening of statement.
 Possible alternative/opinion to resolve the issue by both
parties.
Bargaining Phase
 Both the parties will involve in the following activities:-
 Problem solving

 Proposal
 Settlement Phase
 Settlement phase start with:-
 This stage is described as consisting of effective joint
implementation of the agreement through shared visions,
strategic planning and negotiated change.
 Agreement on common decision.
Formalizing Agreement

Drafting of agreement:-
 After good faith bargaining, a formal document must prepare.

 It should be simple, clear and concise.

Signing the agreement:-

 Both parties sign the agreement and abide by its terms and
conditions.
Enforcing Agreement

 To have the agreement effective and meaningful, it should be

enforced or implemented immediately
 Essentials of Effective Collective Bargaining
1.Favourable Political Climate: If collective bargaining has to be fully effective a
favourable political climate must exist. The government and the public opinion
must be convinced that collective bargaining is the best method of regulating
employment conditions. The government should remove all legislative restrictions
which hamper collective bargaining.
2.Strong and Stable Unions: Collective bargaining is not possible if employees are
not free to form trade unions as they please. A strong and representative trade union
is required to bargain with the employer on equal basis. The employers can easily
ignore a weak union on the plea that it hardly represents the workers
3.Recognition: A trade union may be stable and strong, but until it is given
recognition by the management, it will hardly have any impact. Collective
bargaining cannot exist or begin until union is recognized and regarded as an
integral part of industrial relations. It is in the interest of an employer to recognize a
strong union to avoid strikes and to safeguard against undercutting labour standards
4. Willingness to Give and Take:
Both employers and union leaders should negotiate in a spirit of compromise and
reciprocity. If either of the party adopts an adamant attitude, bargaining will not be possible.
Willingness to give and take does not mean that concessions made by one side must be
marked by equal concession by the other side. Exaggerated demands must be toned down to
reach an agreement.
5. Negotiator’s Authority:
The procedures must be developed to ensure that negotiators have full authority to bind their
constituents. If bargaining representatives have to refer constantly back to their respective
organizations, it makes bargaining process ridiculous and ineffective, because parties know
by experience that bargaining team is only a show piece and not the real authority.
6. Fair Practices:
Both the employers and trade unions should avoid unfair labour practices. Collective
bargaining is possible only in an atmosphere of mutual trust and recognition.
Management must recognize and accept the workers’ right to organize and fight for justice.
Similarly, workers and their union must recognize and accept the employers’ right to
manage. In the absence of such recognition, collective bargaining is a mere trial of strength.
7. Positive Attitude:
The negotiating teams should have a problem solving and positive attitude rather than a fighting
approach. There has to be greater emphasis on mutual accommodation rather than on conflict or
uncompromising attitude. Conflicting attitudes do not lead to amicable labour relations rather it
may foster union militancy as the union reacts by engaging in pressure tactics.

8. Continuous Dialogue:
A dead end must be avoided in negotiations and the talks should continue. As long as talks
continue, agreement can be possible. At times, it may be necessary to leave highly controversial
issues for the time being and narrow down the field of disagreement on other matters.

9. Availability of Data:
The employer must ensure that all the required records are available. Facts and figures relating
to employees and their working conditions provide a rational basis for negotiations. But unless,
the trade union believes in the data and accepts the same, collective bargaining process may be
hampered.
 Problems in CB
1. Ensuring Collectivity:
The primary challenges of collective bargaining lies in ensuring “collectivity”. The collective
bargaining takes places with a group of negotiators representing the management on one side, and
another group representing the workers, usually the trade union, on the other side.
2. Futile Agreements:
Top management also needs to agree to the collective bargaining agreement made by the negotiators
representing them. There are where top collective bargaining agreement, management enter into but
the entire exercise becomes futile. The solution to this issue is keeping the top management informed
throughout the process and getting their approval before making concessions.
3. Resolving Core Issues:
Collective bargaining is a “pause all” settlements that aims to strike a compromise by identifying a
common group between two divergent parties. A settlement depend on acceptance by both parties,
and either party would agree to a settlement that requires them to give something with nothing in
return, or agree to one-sided drastic challenges, even when such an approach might be the remedy to
the issue.
4. Concerned Only with Workforce Issues:
Collective bargaining is concerned only with issues that affect the workforce in general. Matters
concerning individual employers or group of employers are not resolved through their exercise, even
when such matters remain work pressurizing and important bargaining.
5. Lengthy Process:
Collective bargaining is a lengthy process and aim to effect a long-term agreement which is
unsuitable for the present day turbulent business environment. Business need to work frequently
and make fast changes in all aspects of their operations, including working conditions to respond
to the challenges posed by such challenges, and take advantage of ensuing opportunities.
6. Redundancy:
Innovation in goods and services, due to challenges in the business environment, new work
activities, obsolescence of existing work processes and new form of business organization, all
these causes make the collective bargaining agreement redundant.
7. Fragmented Negotiators:
Negotiators appear to be highly fragmented with multiplicity of bargaining units. This makes it
difficult to conclude agreements at different levels. In this case, the main problem is the absence
of bargaining at sectoral and state level.
8. Hamper Work Flow:
The new productive contest includes the emergence of new forms of business and new
relationship between companies in terms of networking outsourcing. As a result, work is often
affected by different companies jointly or interdependently
 Problems in CB

1. Attitude of management

2. Legal Problems
3. Political Interference
4. Problem with Unions

5. Problems from Governments

 Advantage of Collective Bargaining
1) Provide Security to Workers:- Since collective bargaining contracts are legally
binding agreement the employee can be sure of their work condition. As longs as all
terms are followed the management cannot be go back or changed of the condition.

2) Prohibits the Strikes:- This is the security is provided by the management.

Collective bargaining agreement prevents any employees from striking or not
working try to get different benefits. Strikes can cause huge problems within
company. so this is a big draw for management for collective bargaining.

3) Give Employee a Voice:- All the employee that the agreement will affects are
allowed to have a say in the condition. All voice are heard, which promotes a
much better moral in workplace. This also ensures that they want and need of the
majority are met.

4) Reduced Bias and Favouritisms:- All too often you heard stories of someone
getting additional benefits simply because with their boss or other irrelevant
things. This is greatly reduced and possibly eliminated with the use of collective
bargaining
 Disadvantage of Collective Bargaining
1) Not all People will agree:- Collective bargaining cater to need of the many
and disagree the few. The terms in the agreement could negatively affects
employee who have special circumstances or simply do not agree.

2) A Loss of Authority:- When the employee knows the exactly how much
power management has, and has say in things that they can and cannot do, their
role as the authority figure is greatly diminished

3) Reduced Management hand in Business:- Constructive development is

hindered when the collective bargaining is used. If the policy or the terms of the
agreements truly need to be received or removed, it is nearly possible to do.