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Collective Bargaining

What is Collective Bargaining

Process of joint decision making representing democratic way of life in industry. A technique adopted by two parties through the process of discussion and negotiation. Process of negotiation between firms and workers representatives establishing mutually agreeable conditions of employment.

Why is it called Collective Bargaining?

Collective: Both employer and employee act collectively. Bargaining: Process of reaching an agreement involves propasals and counter propasals,offers and counter offers.

Objectives of Collective Bargaining

Objectives can be divided into 1) Major or basic objectives:

Arriving at an agreement

2) Sub-objectives:

Cordial relations Protection of interest No Govt. intervention

According to Indian Labor Organization (ILO), Collective bargaining is, the 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 employment/industrial relations with one another.

According to Dale Yoder, Collective bargaining is the term used to describe a situation in which the essential conditions of employment are determined by bargaining process undertaken by representatives of a group of workers on the one hand and of one or more employers on the other.


Collective Process Continuous Process Bargaining Agreement Discipline Flexible Approach

Subject Matter of Collective Bargaining

The Indian Institute of Personnel Management suggested the following subject matter of collective bargaining:
1. 2. 3. 4. 5.

Purpose of agreement, its scope, and the definition of important terms. Rights and responsibilities of the management and of the trade union. Wages, bonus, production norms, leave, retirement benefits, and terms and conditions of service. Grievance redressed procedure Methods and machinery for the settlement of possible future disputes.

Mandatory and Permissive Subjects

Mandatory Subjects Permissive Subjects

Wages, hours, and employment conditions Arbitration Bonuses Holiday pay Hours of work Life insurance . Wages Medical insurance

Both parties must agree E.g. board service, retiree benefits Arbitration It falls outside of wages, hours and working conditions typically controlled by the employer Ground rule negotiations Internal union matters such as how and when a tentative agreement is ratified Settlement of unfair labor practice charges Pension benefits for retired members

Illegal Subjects of Bargaining

Any proposal which violates National Labor Relations Act (NLRA), the Public Employees Relations Act (PERA), the Civil Service Reform Act (CSRA) and/or any other federal state, county or municipal law would be an illegal subject of bargaining.

It includes:

Featherbedding Discriminatory practices, etc. Closed shop provisions. Hot cargo clauses.

Collective Bargaining Levels

Collective bargaining operates at three levels:

Sector or industry level. National level. Company/Enterprise level.



Pre-requisites for Collective Bargaining

Pre-requisites for collective bargaining

Effective negotiations and enforcement requires a systematic preparation of the base or ground for bargaining .

Deciding the Level of Bargaining

Whether the dealings are confined to enterprise level, industry level, regional or national level should be decided as the contents, scope and enforcement agencies differ in each case.

Determining the Scope and Coverage of Bargaining

It would be better to have a clear understanding of what are the issues to be covered under bargaining. The important and interrelated issues are to be taken for consideration.

Collective Bargaining Process

Collective Bargaining Process


Involves composition of a negotiation team. Should consists of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employers representatives and the union examine their own situation in order to develop the issues that they believe will be most important. The first thing to be done is to determine whether there is actually any reason to negotiate at all.


The parties decide the ground rules that will guide the negotiations. A process well begun is half done and this is no less true in case of collective bargaining. Mutual trust and understanding environment is created so that the collective bargaining agreement is reached.

Collective Bargaining Process


This phase involves the initial opening statements and the possible options that exist to resolve them. This phase could be described as brainstorming. The exchange of messages takes place and opinion of both the parties is sought. Negotiations are easy if a problem solving attitude is adopted. This stage comprises the time when what ifs and supposals are set forth. Both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.



Collective Bargaining Agreements

The result of Collective Bargaining procedure is called the Collective Bargaining Agreement (CBA). Collective agreements may be in the form of procedural agreements or substantive agreements.

Procedural Agreements

Deals with the relationship between workers and management .

Substantive Agreement

Deals with specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc.

Importance of Collective Bargaining

Collective bargaining includes the process of resolving labor-management conflicts. Collective bargaining is a recognized way of creating a system of industrial jurisprudence. It acts as a method of introducing civil rights in the industry. It establishes rules which define and restrict the traditional authority exercised by the management.

Importance to Employees

Collective bargaining develops a sense of self respect and responsibility among the employees. It increases the strength of the workforce, thereby, increasing their bargaining capacity as a group. Collective bargaining increases the morale and productivity of employees. Effective collective bargaining machinery strengthens the trade unions movement. The workers feel motivated as they can approach the management on various matters and bargain for higher benefits.

Importance to Employers

It becomes easier for the management to resolve issues at the bargaining level rather than taking up complaints of individual workers. Collective bargaining tends to promote a sense of job security among employees and thereby tends to reduce the cost of labor turnover to management. Collective bargaining opens up the channel of communication between the workers and the management and increases worker participation in decision making. Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance to Society

Collective bargaining leads to industrial peace in the country It results in establishment of a harmonious industrial climate. The discrimination and exploitation of workers is constantly being checked. It provides a method or the regulation of the conditions of employment of those who are directly concerned about them.


Efficiency Equality of power Legal force Impasse resolution Communication Understanding the institution Self-determination Administrative evaluation Younger faculty Minorities Institutional loyalty Educational policy Competitive power Consistency of service Strengthening collegiality


Increased costs Loss of flexibility Inappropriateness of job actions Increased bureaucracy Unfavorable power shifts Increased demands on faculty Standardized pay Loss of some diversity Involuntary contributions Loss of traditional faculty rights Loss of self-determination Loss of self-governance Loss of full participation of faculty Credibility

Problems of Collective Bargaining


of unions 2.Dominated by Politicians 3.Lack of Procedure 4.Adjudication 5.Political Orientations

Impasses in Bargaining
Economic Strike

An economic strike is a suspension of production while workers and their employer argue about how to divide the surplus from their relationship. Modern economic theories of strikes assume that at least one side has private information about the surplus, viewing the lost production as a cost of extracting information.

Wildcat Strike

Strikes without formal union authorization are also known as wildcat strikes.


The temporary refusal made by an employer to furnish work to his employees as a result of an industrial or labor dispute. . It may be total (one month or less), temporary (one month to six months) or permanent (more than six months).A lockout by an employer is the counterpart to a strike.

Resolving disputes
Mediation Arbitration

Arbitration is a method of dispute resolution used as an alternative to litigation. The arbitration agreement and decision of the arbiter may be enforceable under state and federal law.

There are 2 types of arbitration:

Voluntary Arbitration

In many cases an argument simply cannot be settled as both parties disagree on their own grounds. They therefore enter into Voluntary Arbitration, where disputing parties both agree to submit an issue to arbitration This method has been strongly resisted by labor unions and employers who prefer to rely on collective bargaining and associated economic pressure, such as strikes and lockouts, to reach a settlement of such disputes.

Compulsory Arbitration.

Fact Finding

Bargaining Types
Distributive bargaining:.

In distributive bargaining, one partys gain is another partys loss. This is most commonly explained in terms of a pie. In general, distributive bargaining tends to be more competitive. This type of bargaining is also known as conjunctive bargaining. This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperative bargaining. This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups.

Integrative bargaining:

Attitudinal restructuring:

Intra-organizational bargaining:

Tactics When Bargaining Fails

Union Tactics When Bargaining Fails

Strike Economic strikes Sympathy (secondary) strikes Wildcat strikes Picketing Boycott Work slowdown

Management Tactics When Bargaining Fails

Lockouts Strikebreakers

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