COLLECTIVE BARGAINING

“Collective Bargaining is concerned with the relations between

unions reporting employees and employers (or their
representatives). It involves the process of union organization of
employees, negotiations administration and interpretation of
collective agreements concerning wages, hours of work and other
conditions of employees arguing in concerted economic actions
dispute settlement procedures”.
¬¬____BEACH

“Collective Bargaining is a process in which the representatives of

a labour organization & the representatives of business
organization meet and attempt to negotiate a contract or
agreement, which specifies the nature of employee-employer
union relationship”.

____ FLIPPO

“Collective Bargaining is a mode of fixing the terms of

employment by means of bargaining between organized body of
employees and an employer or association of employees acting
usually through authorized agents. The essence of Collective
Bargaining is bargaining between interested parties and not from
outside parties”.

According to an ILO Manual in 1960, the Collective Bargaining has

defined as:

“Negotiations about working conditions and terms of employment

between an employer, a group of employees or one or more
employers organization on the other, with a view to reaching an
agreement.”
It is also asserted that “the terms of agreement serve as a code
defining the right & obligations of each party in their employment
relations with one another, if fixes large number of detailed
conditions of employees and during its validity none of the
matters it deals with, internal circumstances give grounds for a
dispute counseling and individual workers”.

Collective Bargaining involves:

• Negotiations
• Drafting
• Administration
• Interpretation of documents written by employers and the union
representatives their employees.
• Able management
• Organizational Trade Unions with open mind.

Guide for Trade Union Training

Issued by the International Confederation of Free Trade Union,

Collective Bargaining is “Workers’ Bill of Right” which serves
several objectives of the union, such as:

¬ Union recognition as an authority

¬ Raised standard of living of workers
¬ Greater share for them in the Company’s profit
¬ Due respect to workers
¬ Participation in decision influencing their working conditions
¬ Establishment of practices to settle disputes arising in day-to-
day situations
¬ Workers’ interest throughout the country
¬ A technique for the accomplishment of the goals both of
employees and employers as well
¬ They are the integral part of the society
¬ It implies agreement between representatives of management
and freely designated representatives of employees relating to
the solutions of Industrial problems with minimum government
dictates.
¬ In fact it is an extension of the principles and practices of
democracy to the industry
¬ Actually it is the beginning of Industrial Jurisprudence
¬ Management to abide by certain rules rather than arbitrary
decisions

According to John T Dunlop, Collective Bargaining is….

¬ A system which establishes, services and administers many of

rules which governs the workers’ place of work
¬ A procedure which determines the quantum of compensation
which employee should receive and which influences the
distribution of economic benefits.
¬ A method of settling disputes during pendency of agreement
and of determining, after its expiry, whether a dispute should be
re-opened or whether a strike or lock-out should be resorted to or
not.

Thus categories of Collective Bargaining are:-

¬ Single employer bargaining,
a) one Company and
b) either one union or
c) more than one union
(Where there are several unions at different plants)

¬ Multi-employer bargaining
a) Employer’s federation
b) Workers of an industry representatives by the federation of all
the trade unions
(At local, regional or industry level)

Collective Bargaining Vs Joint Consultation

• Collective Bargaining is to arrive at an agreement on wages and

other conditions of employment about which the parties start with
divergent viewpoints but ultimately attempts to make a comprise.
• Joint Consultation means joint councils relates to the sharing of
information & suggestion with regard to the issues of common
interest including health, safety, welfare and productive
efficiency. This only includes recommendations the ultimate
decisions rests with the management.

Features of Collective Bargaining

• It is a collective process: The representative of both the

management & the employees participate in it.
• It is a continuous process: It establishes regular & stable
relationship between the parties involved.
• It involves not only the negotiation of the contract, but also the
administration or application of the contract also.
• It means that bargaining is a day-to-day process
• Summer Sticher has rightly observed:
“It would be mistake as to assume that Collective Bargaining
begins and ends with the writing of the contract. Actually, that is
only the beginning of the Collective Bargaining”
• It is a flexible and dynamic process: The parties have to adopt a
flexible attitude throughout the process of bargaining
• It is a method of partnership of workers in management. It is in
fact a way to establish industrial democracy.
• It is based on give and take approach and take or leave
approach.
• It is an attempt in achieving and maintaining discipline in
industry
• It is an effective step in promoting industrial jurisprudence.

Subject matter of Collective Bargaining:

• Employment
• Relationship between the workers and the management.
• Recognition of union
• Wages and allowances, hours of work
• Leave and festival holidays
• Bonus & profit sharing schemes
• Seniority and rationalism
• Fixation of work loads
• Standard of labour force
• Programs of planning and development, influencing workforce
• Issue related to retrenchment and lay offs
• Victimization of trade union activities
• PF, gratuity and other retirement benefit schemes
• Incentive schemes
• Housing & transport facilities
• Issues related to discipline and stop rules
• Grievance proceedings
• Working conditions
• Issues related to safety and accident prevention, occupational
diseases and protective clothing.
• Employment benefits such as canteens, medical & health
services and crèches
• Administration of welfare funds
• Cooperative thrift and credit societies
• Educational recreational and training schemes

The Indian Institute of Personnel Management suggested the

following subject matter of Collective Bargaining.
• 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 & conditions of service
• Grievance redressal procedure
• Methods and machinery for settlement
• Termination clause.

Signification of Collective Bargaining

• Negotiations
• Administration
• Enforcement of the written contract between employees and
the employer
• Process of reserving labour-management conflicts
• It is legally and socially sanctioned way of regulating in the
public interest the forces of power and influence inherent in
organized labour management groups
• Labour legislation and machinery for settlement of disputes
• To promote cooperation and mutual understanding
• To provide strikes and lock-outs
• Bipartite / tripartite machinery
• An important solution to the problem of IRs
• Importance to employees
• Importance to employers
• Importance to Society
• Functions of Collective Bargaining

¬ Social change
¬ Peace Treaty or Temporary Treaty◊Industrial peace --
¬ Industrial Democracy
# With Combative aspects
#Without Combative aspects
Long run Social Change

Industrial Jurisprudence(To follow laws/Rules)

Procedure of Negotiation and Collective Bargaining

• Discussion between Management/workers/Trade Unions
• Counter-proposals followed by arguments come up.
• To iron-up differences in the beginning
• Frank discussions, mutual benefits and attempts to appreciate
the other parties approach/point of view for fruitful negotiations.
• No legal compulsion on either side to negotiate of a dispute.
• If both the parties are mutually prepared results can be
achieved.
• When issue is raised by the union, the Industrial Relations
Manager to initiate preliminary work and have initial discussions
and inform the results to top management.
• Thus minor issues are defused and settled peacefully.
• A team of senior managers to involve from the management
side for discussions in matter.
• An IRM is to act as a liaison with the union members and as a
bridge.

The Indian Institute of Personnel Management has suggested

following procedure for negotiation and Collective Bargaining
between Management and Union.

1. Composition of Negotiating Team:

• Representatives of both workers and the employees
• Adequate qualify job knowledge and skills for negotiations.
• To have full authority to speak and make decisions.
• Correct understanding of the main issue and intimate
knowledge of operations, working conditions, production norms,
etc.
• Basic qualities of balanced views even temper, analytical mind,
objective look out.
• Inclusion of functional heads will be more beneficial.

2. Make a good beginning “Well begun is half done” is true in the

Collective Bargaining
• Steps for mutual cooperation
• Members in the right frame of mind.
• Proper climate for mutual understanding and a common desire
to reach an agreement.
• True spirit of give and take
• Maximum chances of success.

3. Maintain continuity of Talks

• With good will and understanding
• Occasions for emotional outbursts and roadblocks likely
• Never to reach the dead end
• Side track blind alleys and keep talks continuing
• Even under the worst situations breaking off temporarily for
scrolling down and rethinking may be necessary.
• When the main issue get confused the dust and storm raised,
bringing things to fundamentals will then help.
• Better to leave controversial issues for the time being and leap
over to the next issue.
• As the field of agreement is widened and the field of
disagreement is narrowed down, small gaps can be bridged over
more easily later.
• As long as talks continue, a solution will be possible.
• To keep the discussion fluid is therefore very important.

4. Develop a problem-solving attitude

• Appreciation on both the sides
• Better understanding
• Better performance and increased prosperity for future
• Proper discussion, analyses can fluid a solution with open mind.

5. Encourage leadership
• Possibilities of solution of both sides are argued.
• Right of association and fight for justice and a fair deal.
• United and homogeneous climate on both sides “Management
gets the union it deserves”
• Principle of justice, sympathy and firness
• Growth of healthy and strong trade unionism. Thus
development of the right type of leadership is only a matter of
time.

6. Bring in the other managers

• Contribution and involvement of other managers
• Collective agreement covers not just one part, but the entire
field of industrial activity.
• Lack of understanding and proper communication often create
problems and difficulties
• Discipline for management and productivity/job security for
workers is important.
• These are the basic difference and conflict never gets resolved.
• At times conflict grows more serious and a situation becomes
explosives, threatening discipline peace and production gets
disturbed.
• Thus maintaining normal conditions and preserving in spirit of
agreement in such a situation presents a tough challenge to the
skill & ability of the management.

7. Contract Administration
• Once a contract is agreed upon it must be diminished
• Contract to specify the procedure for handling disagreement
over the interpretation of different clause of the agreement.
• Almost all Collective Bargaining agreements contain formal
procedure to be used in resolving difference over the
interpretation and application of the agreement.

Essentials of Successful Collective Bargaining – “Process”

• It is an institutionalized representative process
• It is a graceful retreat and to compromise
• It involves:-
a) Psychology
b) Politics
c) Poker (Interference in a negative way)
• It is a tough-minded economic calculus and horse-trading
• Bargaining sessions almost are unavoidably contain certain
stress and strains
• Labour-management tensions are recurrent in nature, since
contacts are regularly re-negotiated.
• Following conditions must be fulfilled to make Collective
Bargaining successful.
a) Strong and stable union
b) Recognition of trade union
c) Permanent bargaining machinery
d) Mutual accommodation
e) Political climate
f) Bargainers authority

Note-worth trends on Collective Bargaining

• Collective Bargaining was initially coined by Sydney & Beatrice
Webb in 1897
• Trade unionism came into existence during early 20th Century
in England
• In USA, Collective Bargaining is an important element
• It became national bargaining between two world wars
• In India, it is not very popular in the private sector but is very
popular in public sector
• Bipartite agreements in banks is very common practice
• Trade unions put forward their demands with counter demands
from the management.
• Coercive tactics from both sides
• Industry-wise bipartite committees formation
• Workers participation in management
• Collective Bargaining at various levels is feasible and effective.

Obstacles to Collective Bargaining in India

Progress of the Collective Bargaining process is not very
encouraging in India. Most of the unions and management lay
emphasis on adjudication rather sorting out issues themselves.
Several factors are responsible for this:
• Multiple unions
• Non-recognition
• Political orientation
• Defective laws
• Mediation by political leaders

Suggestions for effective Collective Bargaining

• To create conditions for strong, stable representative by union
• Recognition by the law of the trade unions
• Political leadership to be replaced by internal workers
leadership
• No political interference
• Both management and unions should adopt peaceful means of
settling disputes
• Adjudication to be resorted to as last resort, when all other
remedies have failed.

Dynamics of Industrial Relations

Industrial Conflicts
IRs are invariably a combination of cooperation, collaboration and
conflict between labour and management though industrial peace
and harmony may be sought as an organizational objective, same
conflict is inherent in the industrial structure and in fact, the
conflict is an epidemic to the industrial society. Conflict of
interests of management and labour is the progeny of the
capitalist form of economic organization. It is not only the sharing
of the fruits of industry that generate conflicts, the very factor of
the existence of the wide cleft of authority between the
“Hands that Produce”
And
“Hands that Control”
The means of production has become a major issue and source of
conflict between management and labour.
• Traditionally, conflict in organizations has been viewed very
negatively
• The classical writers believe that conflict is inherently bad and
so it must be curbed.
• Conflict indicates malfunctioning within the organization and it
represents management failure to bind the workers and the
organization together.
• Conflict is not only a positive force in a modern group but is also
necessary for a group to perform effectively.
• It is inappropriate to say that conflict is all good or bad.
• It depends whether the conflict is functional or dysfunctional
(destructive) and thus hinders the performance of the
organization.

Positive Aspects of Conflicts

• It provides stability to the group concerned
• Workers, who do not normally accept decisions of the union
leaders and management shows greater homogeneity during the
strike period
• Conflicts brings issues in open and thus are easy to solve.
• When the conflicts become open, it gets into public lime-light
and gets public opinion and support
• During conflicts, group gain power which is identified to solve
the problem.

Industrial Peace
• Cordial labour – Management relations
• Ideal situation for industrial growth
• Constant vigilance is required
• Is just opposite to industrial unrest

Preconditions for Industrial Peace

• Strong trade unions with democratic norms
• Employers to have a progressive outlook
• Both workers and management should have faith in Collective
Bargaining & other peaceful means of settling disputes.
• Workers participation in management should encouraged
• There should be open two-way communication between the
parties to the IRs

Measures of Industrial Peace

• Liberal and fair management policy regarding wages and other
benefits
• Satisfactory working conditions
• Mutually acceptable personnel policies in respect of employees,
promotion, disciplinary action and dismissal
• Social security and labour welfare measures to provide for the
legitimate needs of workers and their families.
• Better employer-employee communication greater and more
effective attention to employee’s problem, complaints and
grievances and effective grievance handling machinery.
• Effective measures and techniques for preservation and
improvement of employees morale and motivation
• Healthy supervision, fair treatment and demonstrably impartial
treatment of workers
• Evolution of a strong, representative and responsible trade
union
• Effective and mutually satisfactory measures for attaining
participation of workers in the management of industrial
enterprises.
• Collective Bargaining and establishment of mutually acceptable
agreements defining policies, responsibilities and procedures for
implementation of decisions.