Collective Bargaining

Meaning

Collective bargaining is a process of joint decision making and represents a democratic way of life in the industry Bi partite in nature flexible method to adjust the economical and technological changes in an industry Allows the two sides to get together and talk about problems, needs, goals and to settle differences

Meaning

It is subjected to external influences such as economic and socio-political change, technological and demographic change

Definition

A method of determining the terms and conditions of employment and regulating the employment relationship between representatives of management and employees with the intention to reach an agreement which may be applied to a group of workers.

Collective Bargaining


The role of conflict in bargaining:

Bargaining would not occur if there was no conflict Parties have different needs, goals, interests, attitudes, values and perceptions These goals are pursued at the costs of the other party If parties have sufficient power then they use collective bargaining as a way forward

Sources of conflict

Scarcity of resources: availability of money Incompatibility of goals, needs and interests Different attitudes to work Ambiguity in responsibilities and roles Poor organisational structure Poor communication

Sources of conflict

Most important over: wages and salaries Management has to see to shareholder profits and workers want more money Productivity needs may force the firm to operate flexible work practices and the unions might resist this Companies might want to dismiss inefficient workers and the union would resist this, demanding job security

Sources of conflict

Employees might demand shorter working hours, longer vacation leave and more time off for training Employees might insist on stricter health and safety controls which would be expensive for the company Employers demand loyalty to the firm whereas employees see it as the individual right to change jobs when the opportunity arises

Features
 

   

It is a collective process Establishes regular and and stable relationship between the parties involved It is a flexible and dynamic process It is a method of partnership of workers in management It is a give and take approach It is an attempt in achieving and maintaining discipline in industry

Subject matter of Collective Bargaining

The subject matter of CB is very wide

and responsibilities of the management and of the trade union  Wages , bonus , production norms ,leave retirement benefits and terms and conditions of service  Grievance redressal procedure  Methods and machinery for the settlement of possible future disputes  Termination clause
 Rights

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Bargaining Power


Power regulated the bargaining process:

If one party has more power it will override the interest of the other party Historically management has had more power Its only in the 1980s onwards that this power has been challenged by unions

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Bargaining power


Power:

Management's sources of power is their ownership and/or control over the firm Workers power comes from their ability to withhold labour collectively - strikes On an individual level workers hold very little power and its only in trade unions that they have power

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Bargaining Relationship


Establishing a bargaining relationship:

Employment contract, whereby employer and employee agree on wages and conditions of employment Unions then demand recognition from management. This formalizes management union relationship A bargaining relationship is established when management and union formally agree to enter into negotiations

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Bargaining styles
   

Distributive or Conjunctive bargaining Integrative or cooperative bargaining Productivity Bargaining Composite Bargaining

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Bargaining styles:
Distributive bargaining: this is the most
common type Management and unions are in opposing positions and gain for one is a loss for another Antagonism dominates the bargaining items These would be around wages and conditions of employment

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Bargaining styles:
    

In distributive bargaining power is used as part of the strategy and tactics on both side Each party strives towards an outcome that is favourable to its own side Both parties are thus assessing strengths and weaknesses on both sides Both parties are looking to how much they can push the other party Each party assesses its ability to withstand being pushed

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Bargaining styles:


Integrative Bargaining

This is when both parties want a successful outcome and there is a genuine desire to solve a problem

For Eg : Decisions taken when the the entire industry is in threat Like Global Recession

In integrative bargaining items are seen as problems that need resolving Integrative bargaining strives for a win win situation Conflict is minimized

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Bargaining Styles


Productivity Bargaining

In this method, workers wages and benefits are linked to productivity. Initially, a standard productivity index is finalized through negotiations. This index is not fixed at an exceptionally high level. Workers crossing the standard productivity norms will get substantial benefits. This method of bargaining helps in making the workers realize the importance of raising productivity for organizational survival and growth.

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Bargaining Styles
Composite Bargaining

Workers tend to argue that productivity bargaining increases their workload. As a result, workers tend to favour composite bargaining In this method, labour bargains for wages as usual. In addition, they also bargain for such issues that, if permitted


Eg. Workers demand further equity in matters relating to work norms, employment levels, manning standards, environmental hazards, subcontracting clauses, etc.

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Bargaining Styles

We see that workers are no longer solely interested in the monetary aspects to the exclusion of work related matters. Through composite bargaining, unions are able to prevent the dilution of their powers and ensure justice to workers by putting certain limits on the freedom of employers. For the employer, this is the lesser evil when compared to strikes and lockouts.

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CBA of Volkswgaen & I G Metall

     

Volkswagen and IG Metall agreed collective bargaining milestones for the six traditional plants during their negotiations The central element is a standard working time of up to 34 hours a week without more pay. A new, attractive profit sharing model for the workforce was developed. Production volumes for each of the plants have been determined Safeguarding capacity utilization and thus jobs. The envisaged term of the agreement is January 1, 2007 until the end of 2011.

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Emerging Issues in CB
    

Performance based Bargaining Women's issues Job security Productivity Quality of Work life

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Collective Bargaining Outcomes:

The outcome of a collective bargaining process is an agreement There is usually an agreement to bargain regularly over wages and other conditions of employment Agreement can stipulate a time factor to the agreement, for e.g. wage increase for one year only or for a number of years

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Outcomes
 

All agreement are enforceable by law. All parties are bound to the terms and conditions set out in the agreement. While parties cannot withdraw from and agreement, clauses can be inserted to allow for conditional withdrawal.

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The Milestones in Industrial Harmony : TISCO

   

 

1934: Profit sharing given for the first time in India. December 9, 1938: Labour Association registered in the name of Tata Workers' Union. 1942: Tata Steel employees through representation of leaders of Tata Workers' Union join Quit India movement. January 8, 1956: Comprehensive Agreement between Tata Steel and the Tata Workers' Union broke new ground in collective bargaining and workers' participation in management. 1959: A new Agreement is signed between TWU and Tata Steel to implement a new wage structure. Agreements continue to strengthen bonds of industrial harmony in 1965 ,1970,1975,1999,2001

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