Collective Bargaining

 It is a technique that has been adopted by union

and management to reconcile their conflicting
interests.
 It is called collective because the employees, as a
group, select representatives to meet and discuss
differences with the employer.
 The negotiations for collective bargaining require
joint sessions of the representatives of labour and
management.
 DEFINITION
 ILO - Right to Organize & Collective Bargaining
Convention (No. 98), 1949 "Voluntary negotiation
between employers or employers organizations and
workers' organizations, with a view to the regulation of
terms and conditions of employment by collective
agreements.
 RICHARDSON - "Collective bargaining takes place
when a number of work people enter into a negotiation
as a bargaining unit with an employer or group of
employers with the object of reaching an agreement on
the conditions of the employment of the work people.'
 Types of Collective Bargaining
 Distributive bargaining
 Integrative bargaining
 Productivity bargaining
 Composite bargaining
 Concessionary Bargaining
 1. Distributive Bargaining
 Distributive bargaining is defined as a
negotiation process by which one party benefits
at the others expense. This usually refers to the
redistribution of income in the form of higher
wages, higher bonuses, or higher financial
benefits.
 2. Integrative bargaining

 Integrative bargaining is whereby both sides aim

to benefit in what is seen as ‘win-win’ bargaining.
 Both parties may bring together a list of demands
by which an agreement is reached that benefits
both parties.
 integrative bargaining involves both parties
considering the others point of view, needs, wants,
fears, and concerns. As a result, both parties either
lose or gain by the same amount.
 3. Productivity Bargaining
 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.
 Unions may suggest new ways of organizing the
worker force that may increase productivity and
therefore create value to the firm. In turn, employers
would look to increase employees wages as a result.
 4. 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.
 The aim is to ensure a mutually beneficial long-term
relationship between the employer and employee. It
does this by highlighting issues that employees may
have, which may impact their long-term future at the
company.
 .
 5. Concessionary Bargaining
 Concessionary bargaining is based on unions giving back
previous benefits to the employer. For instance, trade unions
may agree to lower wages in return for job security.
 This may come during an economic decline whereby job
security is more important to the unions than higher wages.
Overall, this may actually benefit the company as they won’t
have to pay for so many redundancies and can keep workers on.
 The main aim of concessionary bargaining is to strengthen the
business in order to ensure its survival alongside its employees.
So unions give back previous benefits in order to secure the
businesses’ long-term future and therefore its members.
 ADVANTAGES OF
COLLECTIVE BARGAINING
 Being a part of a group helps employees to voice
their demands and negotiate better with their
employers. It is harder for employers to dismiss
the demands of a unified large group of employees
or a trade union in comparison with individual
employees.
 It helps to improve the workplace conditions for
employees.
 It makes the rights and obligations of both
employers and employees clear.
Collective Bargaining @ different
levels
 NAT I O NAL- LE V E LBAR GAI N I N G

 Collective bargaining at National level generally takes place

between employer’s organization and the national union.
 The representatives from both sides come together to
bargain on very important and basic issues At National
Level bargaining issues can be wages, D.A., or shift
allowances.
 When bargaining takes place at national level issues are
accepted by all industries and by all industrial workers. The
advantages of bargaining at this level is that there is
uniformity and standardization of wages and wage structure.
 INDUSTRY LEVEL
BARGAINING
 When collective bargaining takes place at the industry level
the employers organizations of one industry jointly bargain
with unions in that industry.
 These unions are organized as industry federations on
industry basis. The negotiations and bargaining include issues
like basic wages, allowances, production capacity, production
norms and working conditions related to that industry.
 Bargaining at industry level gives uniformity in labour cost
and working conditions in one industry. Bargaining at
industry level can also come in combination of industry and
region wise.
 CORPORATE LEVEL
BARGAINING
 Collective bargaining at corporate level takes place
when the management of a corporate with multi-
plant enterprise negotiates one agreement with
various unions for all its plants.
 The collective bargaining is usually conducted by
corporate management with its representatives
from different plants. The advantage of corporate
level bargaining is that it gives uniformity in its
various establishments and avoids disputes which
arises out of disparity. Ex. BHEL, HMT, ONGC.
 PLANT LEVEL BARGAINING
 Collective bargaining at plant level is very common with
most of the private sector enterprises in India. Collective
bargaining at plant level takes place between the
management of particular plant or of a factory
establishment.
 The issues are relevant to that plant or factory only. The
basis and foundation of such negotiations are performance
related or pay, productivity linked. The other advantage of
plant level bargaining is that negotiations take place
independently. These negotiations can take the advantage
of the difference in cost of living from region to region and
thereby it can have a rational base for bargaining.
 CRAFT LEVEL BARGAINING
 Collective bargaining at craft level is possible when an
enterprise has many craft unions. Collective bargaining at
craft level takes place between the representatives of the
management and the representatives of the craft union.
 Collective bargaining at this level was very common in the
early year of industrialization in many countries and is still
common in U.S.A. In India it is not so common except for
airlines industry like Air India and Indian Airlines where
they have pilots association, engineers association, cabin
crew 69 association and ground staff union. They have
different agreements for different category of employees
Collective Bargaining - Process
 1. Preparing for Negotiations
 This may cover a number of areas that its
members are most concerned with. It may
include a survey of members or several focus
groups.
 Simply put, the trade union and negotiators look
to find out the key points by which they are to
negotiate on.
 2. Propose Key Demands
 Once a list of key items are highlighted by the
unions members, it compiles them down into an
official document which is then passed onto the
relevant party/parties. These are also known as
‘key demands’
 It may include items that are ‘red lines’ by which
the negotiation must start with. Often this would
be wages or key benefits to the employee. So if
these are not met, negotiations will fall down.
 3. Negotiation
 There may be sit down meetings, emails, or phone calls
whereby the details of a deal are discussed. Both sides may
request certain parts of the deal be left out, whilst the
employer may request some to be included in.
 As part of the process, both parties may take time to gather
information on whether a specific course of action would be
best. For instance, an increase in an employees salary by 10
percent is going to cost the company. So the negotiators
would have to see whether this is financially possible.
 In turn, the negotiation will continue in a circular fashion
until an agreement is reached or negotiations completely
break down.
 4. Reaching Agreement
 An agreement is usually reached in principle and
it is at this stage by which the more intricate
details are hammered out.
 Legal wording, and binding agreement are put
into place so both parties are liable. Any legal
documents are then signed.
 In short, this stage is where the agreement is put
into place and the final details are arranged.
 5. Administration of Agreement
 It is at this stage by which unions will look to
hold the employer to account and ensure the
agreement is being implemented. For instance,
are workers getting paid the agreed minimum
salary? Or, has the firm built the newly requested
canteen on time and to an agreed upon quality.
 Furthermore, some agreements may have a set
expiry date by which another set of negotiations
will take place. So the collective bargaining
system can be seen as a continuous process
 Negotiation
 The term negotiation refers to a strategic
discussion that resolves an issue in a way that
both parties find acceptable. In a negotiation,
each party tries to persuade the other to agree
with their point of view. Negotiations involve
some give and take, which means one party will
always come out on top of the negotiation.
 Collective bargaining Vs
Negotiation
 Collective Bargaining refers to the process of
discussion, in which the representative of
employees and management, determine the
employees wages and benefits.
 Negotiation is a process in which two or more
parties, discuss specific offers, with a view to
reach a mutually acceptable agreement.