Collective

Bargaining
 Meaning
 Collective Bargaining is negotiation
between an employer or group of
employers and a group of work
people to reach an agreement on
working conditions.
 Representatives of employers and
employees negotiate, administer and
enforce an agreement.
 Critical Success Factors
 Interaction in good faith
 While safeguarding the interests of
employees, Union cannot ignore the
survival and success of organization.
 Management must protect the rights of
trade unions
 Bargaining agent must truly represent
majority of workers.
 Management must not exploit worker’s
disunity
 Both Management and Union must be
vigilant about politicians who normally
exploit
 Definition
 Negotiation about working conditions and
terms of employment between an
employer, a group of employers, or one or
more employers organizations on the one
hand and one or more representative
workers organizations on the other with a
view to reaching agreement –

World Trade Organization (WTO)

 Meaning
 Group process
 Involves negotiations
 Bipartite exercise involving
representatives of union of employees
and employers
 Objective is to reach an agreement
 Purpose is to improve working conditions
of employees viz. wages, welfare,
security, freedom, etc.,
 Not merely an economic process but
socio-economic process (mutual respect
to views, values, aspirations, etc)
 Scope of Collective
Bargaining
 Wages fixation, increments and bonus
payment
 Hours of work and overtime
 Terms and conditions of work, safety,
welfare and health care
 Grievance procedure
 Labour productivity, labour standard
and modernisation
 Union-Management relations including
workers participation
 Types of Collective
Bargaining
 Plant level
 Agreement settled between management and
representatives of workers union
 Industry level
 Number of mfg. units within an industry where
workers face similar problems
 Union of Unions (Industry Union)

 National level
 Common problems cutting across industries,
regions are discussed
 Eg. Agreement between INTUC and
management to “Rationalize Work Practices”
 Process of Collective
Bargaining
 Phase I : Charter of demands by
Bargaining Agent
 Phase II : Preparation for Negotiation
 Phase III : Bargaining
 Phase IV : Collective Agreement
 Phase V : Contract Administration
 Phase I
 Steps
 Registration of Union
 Recognition of Union

 Recognition of Bargaining Agent (Union

having majority membership)
 Charter of Demands

 Present it to management for

agreement, for and on behalf of
employees.
 Phase II
 Preparation by Management
 Data Collection : Internal and External
 Policy Formulation : wage level , concessions they could
allow, balancing between viability and labour costs,
balancing between interests of share holders vs.
labourers, constraints on pricing vs. competition
 Management Strategy : Prioritization of demand; stand
against Union (tough or accommodative), etc.
 Preparation by Union : collect data, formulate
policy (strike or not; management’s capacity to
pay, public support, etc.,), formulate strategy
 Phase III
 Options available
 Total rejection
 Reject outright a few, and offer to consider
some
 Temporary suspension of negotiation for
the management to study the implication
of demands and come prepared for re-start
of negotiations
 While agreeing union’s demands,
management put forth counter demands
 Phase III
 Criteria for Bargaining
 Give and take attitude from both sides
 Keep communication channel open

 Capacity to read others “hidden

agenda” (by negotiation or by collection
of intelligence data)
 Identify “sticking point” (if offered less
will lead to industrial strife) (concept put
up by Pigou)
 Phase III
 Strategies for Bargaining (identified by
Watton & Mckersie)
 Intra-organizational bargaining
 Management and Union prefix strategy
 Limits upto which they are prepared to go
down on their own as well as others
demands
 Attitudinal Structuring
 Ongoing relationship instead of ad hoc
arrangement
 Involves trust and confidence; Work together
as partners
 Phase III
 Strategies for Bargaining (identified by
Watton & Mckersie)
 Distributive Bargaining
 One Gain – Another Lose (eg. Wage rise for
labourers is reduction in profit for
management)
 Interactive Bargaining (Best Strategy)
 Win-Win situation
 Eg. Workers increase productivity and claim
higher compensation; Management assist
workers achieve their objective by taking
supportive role.
 Phase III
 Strategies for Bargaining (identified by Watton
& Mckersie)
 Bargaining power of parties
 Management has upper limit; Union has sticking
point; Two points are called “Anchors”
 Factors determining bargaining power (Limdblom)
 Styles, objectives and motives of negotiators
 Persuasion and coercion skills and techniques

 Competition
 Phase IV
 Writing down Collective Agreement
 Also known as “Labor Contract”,
“Union Contract” or “Labor-
Management Contract”
 Written statement of terms and
provisions of the agreement
 Phase V
 Contract Administration
 Transparency
 Management has right to manage &
involves fairness, equity, transparency of
administration and free flow of information.
 Procedure for handling contractual
disputes
 Spell out detailed procedure in
implementation of provisions of contract
 Follow the spirit of agreement
 Criteria for making
Collective Bargaining
effective
 Proper selection of negotiating team
 Consider Union as a Partner
 Understand views and interests of other
party with open mind
 Adequate homework
 Sense of belongingness (on part of union)
 Strikes and Lockouts are to be the last
resorts
 Policies
 Collective Bargaining be considered
as an educational process
 Collective Bargaining must be
treated as a form of finding out an
optimum solution to a given problem
 Both parties have equal power
 Have trust and confidence
 Leadership qualities
 Follow State laws