Collective Bargaining

Meaning and Concepts

• The ILO Right to Organize and Collective Bargaining
Convention (No. 98), 1949 describes collective bargaining
as:"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.“
• Stevens defines collective bargaining as a ‘social-control
technique for reflecting and transmitting the basic
power relationships which underlie the conflict of
interest in an industrial relations system.’
• According to dale Yoder, “Collective Bargaining is
essentially a process in which employees act as a
group in seeking to shape conditions and
relationships in their employment”
Three concepts with different emphasis and
stress:
• The marketing concept;

Ø views collective bargaining as the means by which labour

is bought and sold in the market place.

Ø perceived as an economic and an exchange relationship.

Ø focuses on the substantive content of collective

agreements i.e., on the pay, hours of work, and fringe
benefits, which are mutually agreed between employers
and trade union representatives on behalf of their
members.
• The governmental concept;

Ø regards the institution as a constitutional system or rule-

making process, which determines relation between
management and trade union representatives.

Ø seen as a political and power relationship.

• The industrial relations or managerial concept;

Ø views the institution as a participative decision-making

between the employees and employers, on matters in
which both parties have vital interest.
Essential features of collective bargaining:
i. It is not equivalent to collective agreements because collective
bargaining refers to the process or means, and collective
agreements to the possible result, of bargaining. Collective
bargaining may not always lead to a collective agreement.

ii. It is a method used by trade unions to improve the terms and

conditions of employment of their members.

iii. It seeks to restore the unequal bargaining position between

employer and employee.

iv. Where it leads to an agreement, it modifies, rather than

replaces, the individual contract of employment, because it does
not create the employer-employee relationship.

v. The process is bipartite, but in some developing countries the

State plays a role in the form of a conciliator where
disagreements occur, or where collective bargaining impinges
on government policy.
Importance:
üIt develops better understanding between the employer
and employees.

üIt promotes industrial democracy.

üIt benefits the both employer and employers.

üIt is adjustable to the changing conditions.

üIt facilitates the speedy implementation of decisions

arrived at collective negotiation.
Bargaining Strategies:
Walton and Mckersie have identified 4 strategies-
Distributive Bargaining
Ø Occurs because of disagreement over the issues in the
proposed contract (wages, bonus, benefit, work rules etc)
Ø Gains of one party achieved at the expense of the other
(win-lose).
Integrative Bargaining
Ø Purpose to create cooperative bargaining relationship that
benefits both parties.
Ø Issues involved may be better job evaluation process,
better training programs, better working conditions etc.
Ø Both parties win or at least neither party losses(win-win).
 Attitudinal Structuring
Ø Involves shaping and reshaping of attitudes to positive
and cooperative.
Ø Examples- From hostile to friendly, from non-cooperative
to cooperative, from untrust to trust.
Ø It helps to achieve “good-faith bargaining”

Intraorganizational Bargain
Ø in organizations there exists different groups with various
requirements so an Intraorganizational consensus is
required for smooth acceptance of agreements.
Ø It involves maneuvering to achieve consensus with
workers and management.
Bargaining Process
I. Pre-negotiation

III. Negotiators

V. Negotiation

VII.Agreement or contract

IX. Implementation of Agreement

Among the more important steps to pre-negotiation preparations
are the following:

1) Coordinating preparations among persons

responsible for gathering and analysing
information relevant to the bargaining process.
2) Selection of a chief negotiator and bargaining
team members.
3) Reviewing previous negotiations because it
provides insights into the opponent’s bargaining
tactics and probable demands.
4) Gathering data on internal operations and
policies of comparable firms throughwage and
salary surveys.
5) Formulate proposals and priorities.
6) Select a suitable site for negotiations.
7) Organise the relevant information in a
bargaining book for easy access at the bargaining
table.
8) Notify the opponent the intent to bargain by
serving required notice.
CONDITIONS FOR SUCCESS OF COLLECTIVE
BARGAINING:
• The union participating in the collective
bargaining process must be strong, democratic
and enlightened.

• One of the principles for establishing and

promoting collective bargaining is to give
voluntary recognition to trade unions as one of
the contracting parties.
• There should be willingness to give and take by
both the parties and interest on the part of both to
reach an agreement and to make collective
bargaining work.

• Both the union and the management must desist

from committing unfair practices and must have a
healthy regard for their mutual rights and
responsibilities.

• It should be a on-going process and meetings

should be arranged at regular intervals to
consider matters of common interest.
• Effective collective bargaining presupposes an
intelligent understanding of both management and
union of the needs, aspirations, objectives and
problems of the other party.

• The effectiveness of collective bargaining cannot be

attained without maturity of leadership on both sides
of the bargaining table.

• Intelligent collective bargaining demands specialised

training.

• For proper negotiations, it is necessary to know the

persons empowered to act for the company and the
union respectively.
EMERGING ISSUES IN COLLECTIVE BARGAINING
• Wage Bargaining

• Women’s Issues

• Job Security

• Productivity

• Technological Change

• Quality of Work Life (QWL)

PRODUCTIVITY BARGAINING
• “an agreement in which advantages of one kind
or another, such as higher wages or increased
leisure, are given to workers in return for
agreement on their part to accept changes in
working practices or in methods or in
organisation of work which will lead to more
efficient working.”

• The prime purpose of is to raise labour

productivity and lower unit labour costs.
The significance is three-fold:
1. it seems to be more successful in tightening of
the pay-productivity link within organisations.

3. it is argued that it opens a whole new source of

untapped productivity potential within an
enterprise.

5. it provides potential opportunity for improving

the climate of negotiation between management
and trade union at company or organisational
level.