COLLECTIVE BARGAINING

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 firm’s 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 employment
relations with one another.

Collective bargaining involves discussions and negotiations between

two groups as to the terms and conditions of employment. It is called
‘collective’ because both the employer and the employee act as a
group rather than as individuals. It is known as ‘bargaining’ because
the method of reaching an agreement involves proposals and counter
proposals, offers and counter offers and other negotiations.

Thus collective bargaining:

• is a collective process in which representatives of both the

management and employees participate.

• is a continuous process which aims at establishing stable

relationships between the parties involved.

• not only involves the bargaining agreement, but also involves

the implementation of such an agreement.

• attempts in achieving discipline in the industry

• is a flexible approach, as the parties involved have to adopt a

flexible attitude towards negotiations.
Forms of Bargaining

A collective bargaining process generally consists of four types of

activities- distributive bargaining, integrative bargaining, attitudinal
restructuring and intra-organizational bargaining.

Distributive bargaining:

It involves haggling over the distribution of surplus. Under it, the

economic issues like wages, salaries and bonus are discussed. In
distributive bargaining, one party’s gain is another party’s loss. This is
most commonly explained in terms of a pie. Disputants can work
together to make the pie bigger, so there is enough for both of them to
have as much as they want, or they can focus on cutting the pie up,
trying to get as much as they can for themselves. In general,
distributive bargaining tends to be more competitive. This type of
bargaining is also Known as conjunctive bargaining.

Integrative bargaining:

This involves negotiation of an issue on which both the parties may

gain, or at least neither party loses. For example, representatives of
employer and employee sides may bargain over the better training
programme or a better job evaluation method. Here, both the parties
are trying to make more of something. In general, it tends to be more
cooperative than distributive bargaining. This type of bargaining is also
known as cooperative bargaining.

Attitudinal restructuring:

This involves shaping and reshaping some attitudes like trust or

distrust, friendliness or hostility between labor and management.
When there is a backlog of bitterness between both the parties,
attitudinal restructuring is required to maintain smooth and
harmonious industrial relations. It develops a bargaining environment
and creates trust and cooperation among the parties.

Intra-organizational bargaining:

It generally aims at resolving internal conflicts. This is a type of

maneuvering to achieve consensus with the workers and management.
Even within the union there may be differences between groups. For
example, skilled workers may feel that they are neglected or women
workers may feel that their interests are not looked after properly.
Within the management also, there may be differences. Trade unions
maneuver to achieve consensus among the conflicting groups.
Characteristics of Collective Bargaining

It is a group process, wherein one group, representing the

employers, and the other, representing the employees, sit together to
negotiate terms of employment.

Negotiations form an important aspect of the process of collective

bargaining i.e., there is considerable scope for discussion, compromise
or mutual give and take in collective bargaining.

Collective bargaining is a formalized process by which employers

and independent trade unions negotiate terms and conditions of
employment and the ways in which certain employment-related issues
are to be regulated at national, organizational and workplace levels.

• Collective bargaining is a process in the sense that it consists of

a number of steps. It begins with the presentation of the charter
of demands and ends with reaching an agreement, which would
serve as the basic law governing labor management relations
over a period of time in an enterprise. Moreover, it is flexible
process and not fixed or static. Mutual trust and understanding
serve as the by products of harmonious relations between the
two parties.
• It a bipartite process. This means there are always two parties
involved in the process of collective bargaining. The negotiations
generally take place between the employees and the
management. It is a form of participation.

• Collective bargaining is a complementary process i.e. each party

needs something that the other party has; labor can increase
productivity and management can pay better for their efforts.

• Collective bargaining tends to improve the relations between

workers and the union on the one hand and the employer on the
other.

• Collective Bargaining is continuous process. It enables industrial

democracy to be effective. It uses cooperation and consensus for
settling disputes rather than conflict and confrontation.

• Collective bargaining takes into account day to day changes,

policies, potentialities, capacities and interests.

It is a political activity frequently undertaken by professional

negotiators
Collective Bargaining Process

Collective bargaining generally includes negotiations between the two

parties (employees’ representatives and employer’s representatives).
Collective bargaining consists of negotiations between an employer
and a group of employees that determine the conditions of
employment. Often employees are represented in the bargaining by a
union or other labor organization. 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 deal with the
relationship between workers and management and the procedures to
be adopted for resolving individual or group disputes.

This will normally include procedures in respect of individual

grievances, disputes and discipline. Frequently, procedural agreements
are put into the company rule book which provides information on the
overall terms and conditions of employment and codes of behavior. A
substantive agreement deals with specific issues, such as basic pay,
overtime premiums, bonus arrangements, holiday entitlements, hours
of work, etc. In many companies, agreements have a fixed time scale
and a collective bargaining process will review the procedural
agreement when negotiations take place on pay and conditions of
employment.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team.

The negotiation team should consist of representatives of both
the parties with adequate knowledge and skills for negotiation.
In this phase both the employer’s 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. A correct understanding of the main issues to be covered and
intimate knowledge of operations, working conditions, production
norms and other relevant conditions is required.

2. Discuss: Here, 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. An
environment of mutual trust and understanding is also created
so that the collective bargaining agreement would be reached.
3. Propose: This phase involves the initial opening statements and
the possible options that exist to resolve them. In a word, this
phase could be described as ‘brainstorming’. The exchange of
messages takes place and opinion of both the parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is

adopted. This stage comprises the time when ‘what ifs’ and
‘supposals’ are set forth and the drafting of agreements take
place.

5. Settlement: Once the parties are through with the bargaining

process, a consensual agreement is reached upon wherein 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.
 Importance of Collective Bargaining

Collective bargaining includes not only negotiations between the

employers and unions but also includes the process of resolving labor-
management conflicts. Thus, collective bargaining is, essentially, a
recognized way of creating a system of industrial jurisprudence. It acts
as a method of introducing civil rights in the industry, that is, the
management should be conducted by rules rather than arbitrary
decision making. 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.

• It restricts management’s freedom for arbitrary action against

the employees. Moreover, unilateral actions by the employer are
also discouraged.

• 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.

• It helps in securing a prompt and fair settlement of grievances.

It provides a flexible means for the adjustment of wages and
employment conditions to economic and technological changes in
the industry, as a result of which the chances for conflicts are
reduced.

Importance to employers

1. It becomes easier for the management to resolve issues at the

bargaining level rather than taking up complaints of individual
workers.

2. Collective bargaining tends to promote a sense of job security

among employees and thereby tends to reduce the cost of labor
turnover to management.
 3. Collective bargaining opens up the channel of communication
between the workers and the management and increases worker
participation in decision making.

4. Collective bargaining plays a vital role in settling and preventing

industrial disputes.

Importance to society

1. Collective bargaining leads to industrial peace in the country

2. It results in establishment of a harmonious industrial climate

which supports which helps the pace of a nation’s efforts towards
economic and social development since the obstacles to such a
development can be reduced considerably.

3. 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.

LEVELS OF COLLECTIVE BARGAINING

Collective bargaining operates at three levels:

1. National level

2. Sector or industry level

3. Company/enterprise level

Economy-wide (national) bargaining is a bipartite or tripartite

form of negotiation between union confederations, central employer
associations and government agencies. It aims at providing a floor
for lower-level bargaining on the terms of employment, often taking
into account macroeconomic goals.

Sectoral bargaining, which aims at the standardization of the

terms of employment in one industry, includes a range of
bargaining patterns. Bargaining may be either broadly or narrowly
defined in terms of the industrial activities covered and may be
either split up according to territorial subunits or conducted
nationally.
 The third bargaining level involves the company and/or
establishment. As a supplementary type of bargaining, it
emphasizes the point that bargaining levels need not be mutually
exclusive.

THEORIES OF TRADE UNION MOVEMENT:-

Karl Marx theory---

Class conflict and communist manifesto-

According to Mark trade union is the natural income of capitalism.
They perform a necessary and useful task in protecting wages and improper
working condition. They should not limit themselves to these goals. Rather
they should use their power to emancipate the working class by putting an
end to the capitalist system.
Mark believed that the labor movement was pure and simple trade
union, with workers remaining subordinate to the owners of the industry. He
emphasized a role for intellectual, to imbue and inspire in workers a class
and political consciousness, outside the economic straggle, and outside the
sphere of relation between works and employers.
 The so called intellectual have however failed in providing the kind of
leadership expected of them not only in economic, but also in the political
share. In India the trade union leadership was largely from among the
individual and elite group of the society.

SYDNEY AND BEATRICE WEBB THEORY

The Socialist Pattern of Society

The Webb’s viewed the role of trade unions as move than first
winning economic benefits of the members. They saw a role for unions to
socialism through political action. The Webb’s too, like Marx observed that
the market pressure on workers to organize into unions to protect their
economic interests. The condition of employment was determined by the
chain of bargains that linked the manual worker, the capitalist employer, the
wholesale trade, the shopkeeper and the customer.
Like Marx the Webb’s too were opposed to the capitalist system. They
advocated different paths to bring its downfall. Mark alone with Engel’s,
played a key role in drafting the communist manifesto in Germany. The
Webb’s played an instrumental role as intellectual’s leader of the labor party
in Britain, drafting the socialist manifesto for converting capitalist Britain
into a mixed economy, thus laying the foundation for the nationalization of
major industries. Marx and Lirs followed prescribed a rapid, even violent
change to a new order. The gradual evolution a non-violent gradual
evolution to a socialist from of government.

ROBERT HOXIE THEORY

Unions under the American capitalist system-

Robert Hoxie is among the earliest to have argued that unions evolve
differently across social. Psychological environment context. He considers
Americans unions less dogmatic and more pragmatic and opportunist. He
identified four functional types of unionism.

BUSINESS UNIONISM:-

Business unions are trade conscious rather then class conscious, they
stressor immediate goals and displays an instrumental orientation. Such
unions ask for more and more focusing an improvement wages, working and
working conditions and pay little attention if any to political & social action.
They seek to achieve their goals primarily through collective bargaining and
industrial (strike). Hoxie distinguishes between business unionism and
company for it’s (the unions) survival.
Friendly or uplift union’s unionism

The goal of such unions is to elevate the moral, intellectual and social life of
the worker. Their means of action include collective bargaining and political
action.

Revolutionary Unionism

These unions are class conscious rather then trade conscious. They follow
Marx’s dictum and reject private ownership of productive resources and
condemn the wages system. Industrial and political action combined with
violence is the dominant means whereby such unions achieve their
objective. Hoxie divided revolution unions into two subtypes-
(1) Focusing socialist (unionism) ideals.
(2) The often perpetrating quasi anarchy (unionism) through strikes
sabotage and violence.
Predatory unionism-
Such unions are leader based not member based. While attempting to secure
higher ways and other benefits for their member, they employer to squeeze
out competition for mutual benefit.