You are on page 1of 14


Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firms and workers representatives for the purpose of establishing mutually agreeable conditions of employment. It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation. ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their

FUNCTIONS OF COLLECTIVE BARGAINING: Collective bargaining serves a number of important functions. It is a rule making or legislative process in the sense that it formulates terms and conditions under which labor and management may cooperate and work together over a certain stated period. John Dunlop and Derek Bok have listed five important functions of collective bargaining: (I) establishing the rules of the workplace; (ii) determining the form of compensation; (iii) standardizing compensation; (iv) determining priorities on each side; and (v) redesigning the machinery of bargaining. Other functions r Increase the economic strength of employees & mgt, establishing uniform conditions of employment, securing prompt & fair redressal of grievances, creates new & varied procedures for the solution of the prob as & when thy arise.

CONDITIONS FOR SUCCESS OF COLLECTIVE BARGAINING: The success of collective bargaining depends upon the following factors: 1)The union participating in the collective bargaining process must be strong, democratic and enlightened. The weak and fragmented state of the unions, smallness and instability of their membership, some of the reasons for the undeveloped state of collective bargaining. 2)One of the principles for establishing and promoting collective bargaining is to give voluntary recognition to trade unions as one of the contracting parties. It may also have the positive benefit of improving industrial relations, production and productivity. 3) There should be willingness to give and take by both the parties and interest on the part of both to reach an agreement and to make collective bargaining work. The trade unions should refrain from putting forward exaggerated demands.

4) The whole atmosphere of collective bargaining gets vitiated, relations become bitter and strained and negotiations more difficult, if one or both the parties engage in unfair practices. Both the union and the management, therefore, must resist from committing unfair practices and must have a healthy regard for their mutual rights and responsibilities. Trust and openness are very essential for meaningful discussion. 5) Collective bargaining usually takes place when there are differences between the parties on certain issues. But in order to make the collective bargaining process more successful, it is essential on the part of the representatives of employers and unions to hold meetings at regular intervals to consider matters of common interest. Such an ongoing process would enable them to understand one anothers problem better and make it easier to find solutions to questions on which their interests conflict.

6) Effective collective bargaining presupposes an intelligent understanding of both management and union of the needs, aspirations, objectives and problems of the other party. Union leaders must have full knowledge of the economics of the plant or industry concerned. Management must have a developed awareness of the nature of the union as a political institution operating in an economic environment.

7) The effectiveness of collective bargaining cannot be attained without maturity of leadership on both sides of the bargaining table. The negotiators should have such qualities as experience, skill, intelligence, resourcefulness, honesty and technical know-how. They must have the capacity to distinguish between basically important and trivial issues. They must know when it is wise or necessary to compromise and when it may be fatal to concede the demands. 8) Intelligent collective bargaining demands specialised training. The increasingly technical complexity of the collective bargaining agenda requires expert professional advice, experience and skill on the part of the negotiators. 9) Both management and the union often find it difficult to locate the men on the other side of the table who are authorised to negotiate. For proper negotiations, it is necessary to know the persons empowered to act for the company and the union respectively.

Not all CB process r successful & effective. The pre requisites for success of it r: Unanimity among workers Strength of both the parties should b equal. Attitudes of both the parties should b positive. The parties should b prepared to give away something in order to gain something. Both parties should observe & follow the terms & conditions of previous agreements tht r reached. Representative Authority of both parties should fully understand & b clear abt the problems & their implications. The workers can make effective use of collective bargaining process to achieve participative mgt & good working conditions. Parties should hv trust & confidence & respect for each other. The process of bargaining should b free from unfair practices & conflict.

Pre requisites for CB

Workers participation in management WPM is the participation resulting from practices wch

increase the scope for employees share of influence in dec mkng at diff tiers of orgnal hierarchy with concomitant assumption of resy. It is an instrument for increasing the efficiency of enterprises & establishing harmonious indl relation, a device for dev social education for promoting solidarity among workers & for tapping human talent & a means for achieving indl peace & harmony wch leads to higher productivity & increased pdn. It can b interpreted in 4 forms: a way of sharing inf with workers, it is joint consultation prior to dec mkng, workers r treated as member of a dec mkng team with equal voting rights & it may involve them in all strategic, policy & operational issues, treating

Collective Bargaining process

There r 2 stages in CB-The negotiation stage & the stage of contract administration. Negotiation Stage- Identification of problem- The nature of prob influences the whole process: whether the prob is very imp that is to b discussed immediately or can it b postponed for some other time, whether its a minor tht can b solved with other partys acceptance & does not involve the long process of CB. Preparing the negotiation- When it becomes necessary to solve the prob through CB process, both parties prepare themselves for negotiation. Negotiation of agreement- Usually there will b a chief negotiator who is from the mgt side. He directs & presides over the process. The chief negotiator presents the prob, its intensity & nature & the views of both the parties. When solution is reached, it is put on the paper, taking concerned legislations into consideration. Both the parties concerned sign the agreement wch in turn, becomes a binding contract for both the parties. Inspite of all these, no amicable solution could b reached, both the parties resorts to arbitration.

Arnold Campo suggests tht the foll procedure should b adopted in negotiation. For union & mgt- Friendly, listen, History, Right & fair, define clarity, arbitration- It should not b resorted to except in cases in wch negotiations fail utterly or the parties r unable to arrive at any agreement. For mgt- Representatives- Mgt must make sure tht the labor leaders r really the representative of workers. Non legal- Dont use lawyers as negotiators unless thy have intimate knowledge of Indl relations. Beyond recognized unions- Dont limit contacts with the union to controversial subjects, but consider also such matters as r of common int to both.

Contract administration- Implementation of the contract is as imp as making a contract. Mgt usually distributes the printed contract, its terms & conditions throughout orgn. The union takes steps to see tht all the workers understand the contract & implement it. From time to time depending upon the changing circumstances, both the parties can make mutually acceptable amendments. Principles of contract administration- Campo proposes the principles of contract administration. For union & mgt- It should b genuine & follow the systematic procedures Honor commitment- Both parties should see that every commitment made should b scrupulously honored.

For the mgt- Credit the union- The mgt should always give credit to the union for anything worthwhile achieved by it. Equals- The mgt should avoid paternalism & strive to treat the trade union representatives & its employees as equal. For the trade union- The trade union should see to it tht its members understand the terms of the agreement it has reached with the mgt. The trade union should assure responsibility & see to it tht its members meticulously observe the terms of agreement. Renewal of agreement- The agreement can b made on a temporary basis. In such cases, before the expiry both the parties consult each other & can terminate or renew the agreement depending upon the circumstances. As such, CB is not a temporary accommodation, but it is a continuous process.

Techniques of negotiation- Negotiation is the process in which 2 or more parties who hv common & conflicting interests come. A negotiation could result in any of the foll situations- Winlose- Here in, the negotiating parties think that winning is everything or winning is the only thing Lose-win- One party achieves most & the other party loses or gains very little. Here either party may consider tht the relationship is paramount. Lose-lose- Both parties lose or do not get what they want & reflect an attitude of take it or leave it or nothing for nothing. Win-win- Both parties get wht thy want. Instead of adopting an attitude of winning is everything or winning is the only thing, the parties believe in mutual gain. Achieving win-win agreements requires integrating the interest of both or all parties. This means tht the parties should keep the foll points in mind while negotiating- focus on their int, not take positions, obtaining substantial results, influencing the balance of power b/w parties, influencing the atmosphere, influencing the constituency, inf procedure, focus on the problem, not the person, invent multiple solutions, be creative.