Corporate

Legal
Responsibilities
and Industrial
Relations
Collective Bargaining

Collective Bargaining

Sidney and Webb were the first to use the term

Collective Bargainingin 1891.

Collective Bargaining (CB) is a procedure by

which employers and group of employees agree
upon the conditions of work.

According to ILO, CB is a negotiations about

working conditions and terms of employment
between an employer or group of employers with
group of employees with a view to reaching an
agreement.

Features of Collective
Bargaining

Process in which the terms and conditions of

employment are decided.

The term collective in collective bargaining

generally represents the workers side, who bargain
either in combination or through their trade union.

Employer-employee relationship is a pre-condition for

collective bargaining.

CB is confined not only to employer and workers, but

the state has also come to play a notable role in
regulating various aspects of CB.

Steps in Collective Bargaining

Presentation in a collective manner to the

employer their demands by the employees.

Discussions and negotiations on the basis of

mutual give-and-take for fulfilling the demands.

Signing of a formal agreement or arriving at an

informal understanding, when negotiation results in
mutual satisfaction.

In the event of failure of negotiations, a likely resort

to strike or lock out or conciliation.

Collective Bargaining
Fixing

up the price of labour services

Establishing

jurisprudence

Providing

system

of

industrial

a
machinery
for
the
representation of individual and group
interests.

Collective Bargaining

In some countries, interest issues and right issues

are distinguished.

In Malaysia and Cyprus, CB can take place on

interest issues and not on rights issue.

Interest issues refer to wages and working

conditions

Right issues concern the interpretation of dos and

donts in the course of employment relationship.

Importance of Collective
Bargaining

Improvement in the conditions of workers

Check on autocracy in Industry

Promotion of lasting industrial peace

Conducive to managerial efficiency

Development of industrial rules

Significant for society and economy

Chamberlain three theories

The Marketing theory views CB as contract for the sale of labour. It

viewed the process which determines on what terms labour will
continue to be supplied to a company to a company by its present
employees or will be supplied in future by newly hired workers. It is
based on the principle that CB is necessary to redress the balance
of bargaining inequality between employers and employees.

The Governmental theory considers CB as a form of industrial

government regulation of terms and conditions of employment. It
views collective agreement as a constitution on the basis of which
is established an industrial govt. for the plant, organization or
industry. The principle underpinning the theory is the sharing of
industrial sovereignty.

The Managerial theory views CB as a system in which the union joins

the company officials in reaching decisions on matters in which
both have vital interests. It involves union officials in decision
making roles. The principle that underpins the managerial theory is
that of mutuality.

Factors influencing bargaining

units and levels

Plant, local, region/area, Firm (Escorts)

industry (tea, textile, jute), national (journalist,
coal)

Structure of trade union organization

Nature of ownership of industrial enterprises

Nature of industrial
governmental policy

relations

law

and

Collective Bargaining in India

Most of the agreements at the plant level.

2% of the total workforce or around 30% of

the workforce in organized sector.

Collective agreements or settlements in the

states of Maharashtra and Gujarat are
governed by state laws.

Indian Banks Association vs. employees union

about salary, increment etc.

Hurdles to collective
bargaining in India

Voluntariness in recognition of unions

Ineffective procedure for the determination

of representative union

Outside leadership in trade unions

Comprehensive coverage of labour laws

Inadequate unionisation