Collective Bargaining

THE CONCEPT
The term ‘collective Bargaining’ extends to all
negotiations that take place between an employer, a
group of employers, or one or more employers’
organizations, on the one hand, and one or more
workers organizations, on the other to
a) Determine the working conditions and terms of
employment; and/or
b) Regulate relations between employers and workers;
and/or
c) Regulate relations between employers or their
organizations and a workers’ organization or workers’
organizations.
Collective bargaining is a method by which trade unions
protect, safeguard, and improve the conditions of their
members’ working lives. The participants in the process
are employers or their organizations and worker
representatives, usually trade unions, The government is
sometimes involved as a third player.
Individual bargaining between an employer and his/her
employees is not regarded as collective bargaining.
That process usually culminates in the conclusion of an
agreement, usually known as a ‘collective agreement’.
According to the ILO, freedom of association
(Convention No.87) and collective bargaining
(Convention No.98) are fundamental rights.
Both freedom of association and the right to
collective bargaining form an integral part of the
ILO Declaration on Fundamental Principles and
Rights at Work, OECD’s core labor standards,
(WTO’s) social clause, and the United Nations’
‘Global Compact’. All four refer to the same labor
rights.
Collective Bargaining And Stakeholders

The Government

The Employers/Management

The Workers/Trade Unions

The Consumers and Community---Media

 Nature of C.B.
- Collective Bargaining is like a Poker game that
combines deception, bluff, luck and ability.
- A power-game, where savage and brute-
strength prevails.
- A rational process where conflicting interests are
reconciled.
- A forum where unions go to “Collect” and
Management to “bargain”.
- Prof. Vam-D Kennedy— “horse-trading, a bluff,
cajolery and threats.”
 In collective bargaining the employer
does not deal with workers directly, but
he deals with collective authorized
institution. It is an institutional
mechanism for;
a) Fixing up the price of labor services;
b) Establishing a system of industrial
jurisprudence;
c) Providing a machinery for the
representation of individual and group
interests.
 ELEMENTS IF COLLECTIVE BARGAINING

 Issues of Consideration
 The Procedure for Consideration
 Collective Agreements and their
Implementation
C.B. AND ADJUDICATION

C.B., has advantages over Adjudication:-

1. It is quick and efficient and the parties do not
waste their time in unnecessary litigation.
2. It is more democratic, where parties
themselves resolve the disputes.
3. In CB, a harmonious relation is created and
there is no winner or loser, victor or
vanquished.
4. In CB, there is no humiliation, retaliation or
revenge. On the contrary, there is mutual
appreciation and respect for each other.
5. The decision by the third party has its own
problem. The deciding authority may not have
that real perspective, idea and concern. He has
a duty and he has technical codes to decide,
which at times, are readymade and repetitive.
6. In Adjudication, one party wins and the other
loses. The defeated party reacts on the next
available opportunity and tries to take revenge.
Thus, a bitter atmosphere, which is detrimental
to industrial harmony is created, which is not so
in the case of CB.
7. Kirkarldy---” No statute, no court decision
has ever made marriages happy and
successful. This is just as true in IR.
Solutions lie in the hands of men and
management. Peace, harmony and
efficiency cannot be legislated and cannot
come by decree or command….”
 PREREQUISITES OF COLLECTIVE BARGAINING
(C.B.)
1. Strong, independent and well-organized
unions.
2. Recognition of the union as bargaining agents.
3. Willingness to adopt a “give-and-Take”
approach.
4. Favorable political climate.
5. Mutual trust and good faith.
6. Absence of unfair labor practices.
7. A problem-solving approach rather than a fire-
fighting approach.
Emerging Approaches

EMERGNG ISSUES IN COLLECTIVE

BARGAINING

Performance based Wage Bargaining

Women’s issues
Job Security/Job Insecurity

Productivity

Quality of Work Life (QWL)

Managing Change Through Collective

Bargaining
 (II)
NEGOTIATIONG TECHNIQUES AND SKILLS
Negotiation is a process in which tow or more
parties who have common and conflicting
interests come together and talk with a view to
reaching an agreement. Negotiation is
concerned with purposeful persuasion and
constructive compromise. It involves five keys
activities:
1.Obtaining substantial results, diving the cost and
benefits, and achieving the goals dictated by the
interests of both the company and the members
of the trade union.
2.Influencing the balance of power between
parties. Balancing the interests of the company
and the workers/members or making it a little
more favorable to the workers/members.
3.Influencing the atmosphere. Promoting a constructive
climate and positive personal relations between the
trade union and members on the one hand and between
the trade union and the management on the other.
4.Influencing the constituency. Reinforcing the position of
trade union leadership with respect to the members on
whose behalf the trade union leaders negotiate.
5.Influencing the procedures. Developing procedures that
allow people to be flexible while increasing the chances
of reaching a favorable compromise. This is possible
when one is able to distinguish between the interests of
trade union members and taking positions on their
behalf. Interests can be safeguarded in more than one
way. If one takes a position, one limits the options.
 Processes rather than outcomes are important to
maintain long-term relationships. Temporary
gains would be short-lived. But if the processes
are appropriate, the trust and understanding
generated will prove useful to all concerned over
a period of time.
 Results, not activities are important.
 Give and take is important, not giving in or
surprising.
 A negotiation could result in any one of the
following situations:
 Win-Lose: Herein, the negotiating parties think
that ‘wining is everything’ or ‘wining is the only
thing’.
 Lose-win: One party achieves most and the
other party loses or gains very little. Here either
party may consider that the ‘relationship is
paramount’.
 Lose-Lose: Both parties lose or do not get what
they want ant reflect an attitude of ‘take it or
leave it’ or ‘nothing for nothing’.
 Win-Win: Both parties get what they want.
Instead of adopting an attitude of ‘wining is
everything’ or ‘winning is the only thing’, the
parties believe in mutual gain.
 Achieving win-win agreements requires
integrating the interests of both/all the parties.
This means that the parties should keep the
following points in mind while negotiating.
1. Focus on their interests, not take positions.
2. Focus on the problem, not the person
3. Invent multiple solutions
4. Be creative
5. Expand the pie
6. Non-specific compensation
7. Log rolling
8. Bridge the gap in perceptions through
reformulation of the issue.
Strategies and Tactics of Negotiation
Strategy is concerned with mapping out the plan
and basic policies to be followed in negotiation.
Each strategy may have a number of tactics.
Tactics are the details, the nuts & bolts of
strategy. The strategies depend on the
philosophy, -- business imperatives,
technological vulnerability, public pressure, and
political interferences etc. Based on above,
parties may decide in advance to go for either
long-term settlement or short-term settlement,
to follow hard negotiation tactics or soft ones, to
delay or sort them out quickly, to negotiate item
by item or go for a comprehensive package
settlement etc.
Strategies change as per the demand of
the situation- either it follows formal or
informal channel. As the negotiation
progresses, situation becomes clear and they
require change in the more and strategies.
Usually negotiator follow following strategies –
High
Collaborate
Yield

High need for High need for both

Relationship and Relationship and

Relationship

low for substance substance

Hard
Compromise
Accommodate contending

Moderate need for Moderate need for Moderate need for

Relationship but low Both Relationship and relationship but high

need for substance substance need for substance

Soft Take it or
Withdraw
contending Leave it

Low need for both Moderate need for High need for
relationship and substance but low
Substance but low need
substance need for relationship
for relationship

Low Substance High

 Distributive Negotiation
Integrative Negotiation
Distributive Negotiation
Traditional win-lose, fixed-amount situations- wherein
one party gain is another party lose.
The forcing and compromise conflict handling styles are
dominant in distributive negotiations.
Bluffing
Delays
Temper- Tantrums
Use of force
ultimatum
  Strategy for negotiation

Competing

Benefit –possibility frontier

Benefit
to you
Compromising

Accommodating
Avoiding

Benefit to other party

Distributive style
i. Profit motive, to get more than the other
ii. A sense of competition, to win is most important
at any cost.
iii. Concern for justice, to be “fair” from one’s own
point of view.

iv. Unethical behavior is usually rationalized –

when questioned – by saying “it was
unavoidable”. The results justify the means
used.
 Integrative Negotiation
Joint problem solving
Mutual problem identification
Working out alternatives
Mutually acceptable solutions
Collaborative and compromise conflict styles are
dominant
Separate the people from the problem
Focus on interests, not positions
Invent options for mutual gain
Insist on using objective criteria
 Following beliefs would be conducive to the
problem-solving approach:
1.Belief in the availability of a mutually acceptable
solution that will achieve everyone’s goals.
2.Belief in cooperation rather than competition.
3.Belief that everyone is of equal value-no status or
power imbalance is involved.
4.Belief in the view expressed by others as legitimate
statement s of their position.
5. Belief that differences of opinion are helpful
6.Belief in the trustworthiness of the other member.
7.Belief that the other party can compete, but chooses
to cooperate.
a. There is no fixed pie.
b. Bridging: It refers to investing new, mutually
acceptable solutions by integrating individually-held
proposals.
c. Non specific compensations: Relevant
compensation is offered to offset the loss of not
getting one’s preferences fulfilled.
d. Logrolling: This suggests that parties must
establish more than one issue in a conflict; at least
one of them should be of greater significance to
each of the individuals/parties.
e. Expanding Pie: This refers to increasing resources
because limited resources can and often affect result
in a conflict situation.
f. Win-Win options are not immediately visible.
B Competing
e Collaborating
n New Expanding Possibility Frontier
e Benefit of Collaborating

fi Compromising
t

t accommodating
avoiding
o

y Benefit to other party

o
u
Integrative style
 The integrative conflict resolution style directs the energies of the
conflicting parties at defeating the problem and not at each other.
Attempts are made to clarify the problem by exploring facts and
expressing personal feelings. Although time consuming, this
approach allows people to disagree, work on those disagreements
in light of facts, and help achieve a better understanding of each
other (Filley, 1975).
 This approach to conflict resolution is based on certain beliefs and
attitudes that provide the foundation for the interpersonal
communication skills that must be used. Filley (1975) suggested
the following beliefs would be conducive to the problem-solving
approach:
 Belief in the availability of a mutually acceptable solution that will
achieve everyone’s goals.
 Belief in cooperation rather than competition.
 Belief that everyone is of equal value-no status or power imbalance is
involved.
 Belief in the view expressed by others as legitimate statements of their
position.
 Belief that differences of opinion are helpful
 Belief in the trustworthiness of the other member
 Belief that the other party can compete, but chooses to cooperate.
 The skill of establishing open and mutual trust is critical
for conflict resolution (Deutsch, 1973; Doolittle, 1976). A
trusting atmosphere encourages individuals to take the
existential risk involved in open, constructive
confrontation. Trust is also conducive to the
maintenance of the relationship between the conflict
parties (Deutsch, 1973). Trust can be demonstrated by a
conflict party through the use of congruent verbal and
nonverbal communication channels (Gahagan &
Tedeschi, 1968; Satir, 1964). Conflict parties must speak
and behave in ways that demonstrate trust, thereby
encouraging the other conflict party to respond in a
trusting and cooperative manner. Another skill of
integrative conflict resolution is the use of positive and
supportive messages (Alexander, 1979).
 The integrative style of resolution is appropriate in
interpersonal conflicts because the parties desire not
only the resolution of the issue but just as importantly
want to maintain a satisfactory relationship with the
other person. The more developed the interpersonal
communication skills of the conflict parties, the greater
the chance for constructive, integrative outcomes
(Cupach, 1982)
 Integrative conflict resolution fosters healthy
relationships. A systematic, comprehensive educational
program that encourages the building of constructive
interpersonal skills could empower individuals for more
integrative conflict resolution within their valued
relationships.
Negotiations Processes

Negotiation is an art of creating agreement on

specific issue between two (or more) parties
with differing view. Negotiation is a live-skill
than a mere business technique and that skill is
acquired by learning, training and practicing.
Every one has some experience in negotiation,
but in business world, we can not leave
negotiation to such inexperience and naive,
because prices of failure are very high. How do
you negotiate makes enormous difference in the
outcome. Therefore, all precautions to be taken
to go for professional negotiation.
The success of such negotiation depends
on many factors, but the most important
is the ability of the negotiator, who charts
out a course of this unpredictable
encounter and sends a feeler to the other
side that the process is useful and that
they may stand to benefit from it.
Negotiation processes have two vital
dimensions- the decision making processes and
different structures or stages or steps. A ‘route-
map’ along with balancing decision-making
makes the face to face meeting go in right
direction.
Steps in Negotiation-
1. Preparation
Failing to prepare is preparing to fail. It is
engaging the brain before opening the mouth. It
is doing home work to be ready to be comfortable
in different situations.

- Think ahead
- Set clear objectives
- Anticipate possible reactions
- Work out strategies – (structure &
sequences).
- Preparation provides a road map not a
strait- jacket intended to be straight
forward to the point and effective and not
restrictive.
Objective should be SMART.

Simple - Easy / precise

Measurable - Qualifiedly, as far as possible.
Achievable - Not too high beyond the
counting capabilities of other
side.
Realistic - Must help organization and add
value.
Timed - Time frame within which you
can judge the success.

Basics required for thorough preparations-

 Basics required for thorough preparations-

I Data, practices, information's, rule, laws,

repercussions – financial and otherwise etc.-

1.Govt. legislations – what flexibilities do they

allow? How can they be utilized to the bent
advantages.

2.Co’s rules/policies- how rigid/flexible are they?

Have or have not exception made in the
past? Can they be justified?

3.Prevailing wage rates/fringe-benefits in the

area; industry, nationally in other industries.
4. Productivity figures – linkage of productivity
with wages? History of recent settlement.

5. Previous agreements
- in other cos.
- within the company.

6. Past, present & future profitability/loss of the

co.

7. Customs/practices in the co.

8. Wage-cost- a) Basic wage

b) OT
c) Shift-premium
d) Fringe-benefit
9. Work out basket of alternatives.

10. Calculate the cost of different alternatives.

11. Fix the bottom line.

12. Obtain approval

Do not assume that the other party does not know the
above facts – they know as much as you do, at least.

ii. Formation of team is yet another preparation

that is required to be done from all relevant
discipline – technical process & legal experts etc. A team
only to be fielded, with full power.
Preparation involves the management of internal
dimension or managing the team, so that every one speak
the same language. A team generally consists of stabilizers,
destabilizes & principled or assertive negotiations and they
are required to be managed to behave as a cohesive team.
Leader of the team must be acceptable to all and capable of
leading the team and negotiation.

- Form core groups out of big team. Preparation

also includes fixing the bottom-line of the terms of
settlements and working out final strategies to achieve
them. But these strategies must not be set in stone and
must be flexible to accommodate reason demands of
opposite side.
Preparation gives confidence during negotiation session.
Therefore, these pre-negotiator executes must be done.
Invitation to Negotiation

1. This is opening and taking off stage of negotiation.

Therefore, deserves all care

- Take initiative in fixing the time, venue,

agenda of the meeting.
- Initiate the negotiation processes
- Take control of organization of the
meeting.
- Sell the concept of the agreement before
you start negotiating the terms.
Presentation

This is the occasion to present your ideal terms as

declaration of your opening position as also occasion to
judge and weigh the demands of the other side. It is
exploratory stage – where we gauge the attitude,
strength and importance of demands.

Negotiation is like see-saw game. It is to & fro process,

moves up and down and balance (agreement) comes
after some time. Thus it gives both – a) and indication of
area of agreement, b) set the scene for final bargaining.
 Setting your opening position requires a lot of
skill and may differ from situation to situation.
You may open-up with general explanation of
demands & may refer back the previous
agreements, if any. You may open a short
discussion on neutral subject to ally any hostility
and get the other side into conversation. You
may present the value that your offering is
giving.
As this is the initial encounter, you can expect brickbats and
emotional outbursts. It is natural to see scenario of venting
anger, anguish emotions. Displaying attacking postures,
blaming, cursing, anguish and threatening are also
common. Even walk outs & other threats are also resorted
to. These tactics are adopted by union to create panic &
nervousness to get early concessions.

Some do not's
- Do not over react - ?
- Do not become over – emotional.
- Do not lose patience/temper.
- Do not be unpleasant.
- Do not be provocative.
- Do not insult them.
- Do not push them too hard at this moment.
- Do not be panicked.
Some does
- Be professional in approach.
- Look confident, relaxed and at ease.
- Be open, sincere, honest and credible.
- Show respect and value for the other side.
- Show empathy and understanding for the
other side.
- Show commitment for ‘win-win’ outcome.
- Give-counter-demand, if need be to create
counter pressure.
4. Bargaining

Bargaining session is the most important

and crucial stage of negotiation processes.
It is real negotiation of skill & expertise.
You need to be assertive and powerful
while giving respect to the views of other
side.
 There are two golden rules

i) “Never give a concession, trade it reluctantly” –valuable

to give and cheap to receive. Do not give any thing for
nothing. It is not like PSUs Collective Bargaining where
Union goes to collect and Management to bargain.

ii) “Enhance and reduce every concession” i.e. build-up

value for whatever you are offering and minimize the
value of whatever is being offered to you-
 ENHANCE
E Imply that this is an Exceptional concession (I would
never normally do this but…………..)
N Refer to Need that your concession will solve (well, this
concession will remove your long pending need to
………..)
H Refer to History, if that concession was demanded in
the past (we never agreed for this in the past – but in
the interest of good will we agree………….)
A Imply that you may be in trouble for exceeding your
Authority (I do not know what my boss will say
but……….)
N You agree for Nourishment to your relationship (…….
Because we have to work together).
C Stress the Cost (financial or otherwise) to you –
(Well, I agree, but the cost will be………)
E Provide Evidence in concrete term by citing
example – fact, figures etc. as to what this
demand mean.
Such lead ins build credibility, add value and
become more acceptable.

REDUCE
Reduce their concessions
Warning
- Do it carefully.
- Do not overplay.
- Do not antagonize
R Acknowledge their concessions but reduce them
– (well, that is a small step forward, I suppose)
or quote the value that sound smaller (some
beginning has been made, at least etc.)

E Treat them as given; Expected rather than valued

– (that was expected, nothing new has come,
any way etc.

D Deny any real value (that does not really help

me).

U Underplay the expressions – even thank both in

words & tone (thank rather than thank you very
much).
C Contribute it back to them – (well, if that would help you, let us do that
way).

E Reject with Empathy – (well I can see that you might think that would
be acceptable to us, but …..)

- Deadlock in Bargaining
- Breakdown of Bargaining & its consequences.
■ Conclusion of Bargaining
■ Drafting & Signing of Agreement/Settlement
 (III)
Settlement in Conciliation
a) Concept of settlement. Section 2 (p) defines
“settlement” to mean: a settlement arrived at in
the course of conciliation proceeding and
includes a written agreement between the
employer and workmen arrived at otherwise
than in the course of conciliation proceeding,
where such agreement has been signed by the
parties thereto in such manner as may be
prescribed and a copy thereof has been sent to
an officer authorized in this behalf by the
appropriate Government and the Conciliation
Officer.
 An analysis of the aforesaid definition reveals
that there are two modes of settlement of
industrial disputes:
1) Settlement arrived at with the assistance and
concurrence of the Conciliation proceedings, i.e.,
one which is arrived at with the assistance and
concurrence of the Conciliation Officer, who is
duty bound to promote a settlement and to do
everything to induce the parties to come to a
fair and amicable settlement of the dispute, and
2) A written agreement between employer
and workmen arrived at otherwise than in
the course of conciliation proceedings.

b) Nature of settlement. The nature of

proceedings before the Conciliation Officer
is not judicial or quasi judicial but
administrative.
1) Settlement must be “ in writing”.
2) Writing must be signed by the parties.

c) Settlement must be in the prescribed

form.
d) Publication of the settlement by Board of
Conciliation.
e) Settlement must be fair, just and
bonafide.
 Termination. Sub-section (2) of Section 19
provides for other terminus of the settlement.
Such settlement shall be binding for such
period as is agreed upon by the parties, and if
no such period is agreed upon, for a period of
six months from the date on which the
memorandum of settlement is signed by the
parties to the dispute, and shall continue to be
binding on the parties after the expiry of the
period aforesaid, until the expiry of two months
from the date on which a notice in writing of an
intention to terminate the settlement is given by
one of the parties to the other party or parties to
the settlement.
f) Persons on whom settlement is binding.
The Industrial Disputes Act, 1947 draws a
distinction between a settlement arrived
at by agreement between the parties and
settlement arrived in the course of
conciliation proceedings. Whereas the
first category of settlement “shall be
binding only on the parties to the
agreement” ,the second one is binding not
only on “all parties to the industrial
dispute” but also on:
 All other parties summoned to appear in the
proceedings as parties to the dispute
 Where a party referred to in clause (a) or clause
(b) is a employer, his heirs, successors or
assigns in respect of the establishment to which
the dispute relates;
 Where a party referred to in clause (a) or clause
(b) is composed of workmen, all person who
were employed in the establishment or part of
the establishment, as the case may be, to which
the dispute relates on the date of the dispute
and all persons who subsequently become
employed in the establishment or part.