UNIT 28

Collective Bargaining
The person Chapter dealt with Trade Unions. The management and the employees always have conflicting interests. While the management always thinks in terms of reducing cost, maximizing production and sales and greater commitment on the part of the employees the employees always think in terms of higher pay, better working conditions and greater recognition of work. A proposal that is more beneficial to the management may not be accepted by the employees and on the other hand the management any not accept a certain proposal of the employees that is more beneficial to the latter. It is, therefore, necessary that both the management and the employees arrive at a settlement on every important proposal. This is what is achieved through what is called Collective Bargaining. Collective Bargaining Meaning Collective bargaining is a technique used for compromising the conflicting interests of the employer and the employees. It involves discussion and negotiation between the workers and the management on every important aspect of work pay, working conditions, career advancement, production target, sales target, quality standards, etc. The word Collective is used because the representatives of both the employer and the employees meet and discuss in order to arrive at a settlement. The word Bargaining is used because during the process of negotiation certain proposals and counter proposals are made from either side.

Definitions A few definitions of collective bargaining are given below: 1. Collective bargaining is a process of discussion and negotiation between two parties, one or both of whom is a group of persons acting in consent. The resulting bargain is an understanding as to the terms and conditions under which a continuing service is to be performed. More specifically, collective bargaining is a procedure by with employers and a group of employees agree upon is a procedure by which employers and a group of employees agree upon the conditions of work Encyclopaedia Sciences. 2. collective bargaining refers to a process by which employers on the one hand and representatives of employees on the other attempt to arrive at agreement covering the conditions under which employees will contribute and be compensated for their services Jucious. 3. Negotiations about working conditions and terms of employment between an employer and a group of employers or one or more employees organisations with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment, relations with one another; fix a large number of detailed conditions of employment; and during its validity, none of the matters it deals with can in normal circumstances be given as a group for a dispute concerning an individual workers ILO on Collective Bargaining.

Characteristics of Collective Bargaining The important features of collecting bargaining are as follows: 1. It is voluntary process Both the management and the employees voluntarily participate in the negotiations and arrive at a solution. 2. It is a group activity The representations of management and those of employees meeting and discuss any important proposal and therefore collective bargaining is a group activity. 3. It is mutual Collective bargaining can work only when the management and the employees accept their respective responsibilities. For its success an atmosphere that is free from grudge and animosity ire required. It is a mutual give-and-take rather than a take-it=or-leave-it approach of reaching a settlement. 4. It has flexibility Collective bargaining provides scope for compromise and for a settlement that is mutually acceptable and beneficial. Neither the management not he representative of the employees can have a rigid stand on any matter. 5. It is dynamic Gone are the days when the employees and the employers used to become emotional while negotiating the terms and conditions of work. Collective bargaining ensures now that any such negotiation is done in a more systematic and scientific manner. 6. It is an on-going activity Collective bargaining is a continuous process. It requires continuing and organised relationships between the representatives of both the management and the workers. It does not end with a single transaction.

7. It is complementary in nature In collective bargaining employees do not requires with management and vice versa on any matter. Rather, they try to complement each other, i.e., management gives the employees what they want and employees give the management what it wants. 8. It is a democratic process Collective Bargaining gives the employees the right to be heard. It is a joint formulation of management policies on all matters affecting the interests of employees and not a mere signing of agreement granting certain benefits to the employees.

Objectives of Collective Bargaining The objectives of collective Bargaining may be stated as follows: 1. To promote a democratic approach to solving work related problems One of the main objectives of collective bargaining is to provide an opportunity for the employees to depute their representative for talks with the representatives of the management to find a solution to certain work related problems. The views of the employees, thus, are heard by the management. Collective bargaining, therefore, ensures a democratic approach to solving the problems of the employees. 2. To do away with the need for third party intervention for finding solution In the absence of a proper approach to finding a solution to the grievances of the employees, the intervention of a mediator may be necessary. In collective bargaining, the management and the

employees strive to arrive at a settlement without third party intervention. 3. To provide for better employer-employee relationships Both the management and the employees are prepared for talks on issues of common interest. Each group is particular that it should understand and respect the sentiments of the other should the talks be fruitful. Collective bargaining, thus, provides scope for better labourmanagement relationships. 4. To prevent unilateral action on the part of the management Another important objective of collective bargaining is to ensure that the management does not take unilateral decisions on matters affecting the interest of the employees. It ensures employees participation in all such decisions. 5. To ensure that trade union is given due recognition Collective bargaining cannot take place if the management is not prepared to recognise the trade union. It is only union officials who represent the employees and hold talks with the representatives of the management. 6. To arrive at a settlement that is mutually beneficial The settlement reached between the management and the employees should always be mutually beneficial. For example, if the management comes out with a proposal and the representatives of the employees express their views, both make a compromise and arrive at the final decision. For example, if the management wants to raise the daily target of a factory worker from say 10 units to 14 and the employees are prepared for 11, both may finally agree on 12.

Importance of Collective Bargaining Collective bargaining important in view of the many advantages it offers. These are: 1. It provides bargaining power not only to the management but to the workers as well. Management usually has better bargaining power when compared with the workers. In collective bargaining both have the same bargaining strength. 2. It is a practical approach to regulating the terms of conditions of employment of the workers. In the workplace the employer and the employees are the direct parties to any issue. It is, therefore, appropriate that they both discuss any problem affecting their mutual interests. 3. It takes care of the interests of both the management and the employees. Normally tej employer is better equipped to safeguard his interests. An important plus point of collective bargaining is that it protests equally the interests of both the management and the employees. 4. There is no scope for any group to thrust its views on the other. Under the normal conditions the managements tends to impose its ideas on the employees. Collective bargaining ensures that no party imposes its ideals or views on the other. 5. Collective bargaining eliminated unilateral decision on the part of the management. Most managements consider decision-making their prerogative. They take decisions unilaterally even on matters directly affecting the interests of employees. This is not possible under

collective bargaining. The employees are free to express their views. Their suggestions will have to be considered by the management favourable before evolving the final decision on any matter. 6. It promotes better labour-management telationships. Each group will have to ensure that it does not hurt the feelings and sentiments of the members of the other group. The concern for each other is what is important in collective bargaining. 7. It ensures industrial democracy. This happens because the employees right to be heard is recognised in collective bargaining. 8. It ensures that management is conducted by rules and not by arbitrary decisions. This creates some sort of industrial jurisprudence. 9. It provides for greater flexibility in determining the terms and conditions of service of employees and thereby reduces the changes for conflicts. 10. It helps to secure prompt and faire redressal of grievances. Guidelines for Successful Collective Bargaining The guidelines to be followed for the success of collective bargaining may be discussed as follows: (i) (ii) Guidelines for the Management Guidelines for the Union and

(iii) Guidelines for both

Guidelines to be followed by the Management The management, on its part, must follow the guidelines given below for making collective bargaining a success: 1. It must come forward to grant recognition to the trade union without any reservations. The management must realise that any of its employees may have grievances and such a person may be hesitant to approach it in his personal capacity. He needs the support of his associates and trade union gives him such a support. 2. It must develop and follow a realistic labour policy. Such a policy must provide for the payment of fair wages, provision of reasonable working conditions, provisions of career advancement and social security benefits. They pay and allowances in the cost of living. 3. The management must establish and maintain satisfactory relationship with the trade union and its representatives. If it does, the union representatives will also avoid anything that may disturb that relationship. 4. The rules and regulations governing the labour force must be periodically reviewed. Changes, if necessary, must be made in hours of work, shifts, work methods, targets and so on if the prevailing conditions demand such a change. 5. Where there exists more than one trade union, the management must deal with the one having greater membership. 6. The management must identify any grievance of its employees even before the union brings it to its notice and must be ready with a solution.

7. While dealing with the representatives of the union, the management must ensure that economic considerations alone do not get focus. Social considerations are even more important. 8. The management must not have any secret pact with the trade union officials. Guidelines to be followed by the Union For the success of collective bargaining, the union, on its part, must follow the guidelines given below: 1. The leaders of the union should not think that their only task is to secure higher pay, shorter working hours and better working conditions for their members. The leaders and the improving the quality and quantity of output and in eliminating waste. 2. The union leaders and the members must be sincere and loyal to the management that has given them employment. 3. They union leaders should not try to politicise the workers problems. They must not involve political parties at all in resolving industrial disputes. They should strive to sort out any issue by holding talks with the management. 4. The union leaders and the members should not resort to strike to solve even petty problems in the workplace. Strike causes hardship not only to the management but to the workers as well. The workers are going to lose pay for the period of strike. Strike, therefore, should be used only is extraordinary circumstances when all other methods of showing protest have failed to produce desired results.

5. The union leaders and the members must realise that the existence of many unions within the same industry reduces the bargaining power. Moreover, under such circumstances, it becomes difficult for the management also to hold talks. It is, therefore, necessary that there exists only one union in the entire industry. Unions with low membership may be merged and with the one having greater membership. 6. The union leaders must be honest and fair in their dealings with the management representatives. They must not get bribes from the management and work against the interests of the employees.

Guidelines to be followed by both the Management and the Union Together the management and the union must follow the guidelines given below for making collective bargaining a successful and worthwhile process: 1. Both the management and the union representatives should command the respect of each other. Both should have enough bargaining power so that they will be able to enforce their claims. 2. The representatives of the management and the workers union must behave in a way that both the groups can repose faith in each other. Collective bargaining cannot be successful if one group is suspicions about the claims made by the other. 3. Both the management and the union must make an earnest attempt solve the problem amicably. An attempt should not be made by one

group top derive maximum benefits and give the other group minimum. 4. Collective bargaining should not be used merely as a bargaining process. The union leaders should utilise the opportunity to apprise the management of the work related problems of the employees. Similarly, the management must explain to the union leaders the problems confronting the organisation. 5. Both the management and the union must abide by the rules and regulations of the National and State laws that are applicable to collective bargaining.

Collective Bargaining in India Collective bargaining has not made progress in India in view of the following reasons: 1. Multiplicity of unions Many unions exits within an industry. This reduces the bargaining power of each. Moreover, in such a situation the employer will nor be able to decide the union with which he has to hold talks. 2. Inter-union rivalry Each union works against the plan of the other. There is lack of collective action. 3. Political affiliation of unions Many trade unions in India are affiliated to political parties. The leaders of these unions only dance to the tunes of the political leaders who utilise the opportunity to attain certain political gains.

4. Lack of able leaders The leaders of most union lack the will to approach the problem in the correct perspective. They give a strike call and also pressurise the employees to strike work even for petty issues. Some of the leaders are also corrupt. 5. Non-recognition of unions Most management are not prepared to grant recognition to trade unions. They except their employees to work according to certain stricter terms and conditions. There managements do not allow their employees to raise any demand and they use all sorts of punitive measures like intimidation, pay-cut, demotion, suspension and even termination of service if their employees indulge in union activates. 6. Indifferent attitude of the employees Employees is most organisations do not want to join any union. they are prepared to accept any service condition imposed on them by their employers. They do not want t assert their rights. They do not even extend moral support to their colleagues who may be members of the union and taking part in some programme of showing displeasure to the management. 7. Autocratic attitude of management There are many employers who adopt the policy of hire and fire. The mounting problem of unemployment in India forces people to accept any job and accept stringent terms and conditions of service. 8. Preference for legal remedy A few unions that are keen on finding a quick solution to some labour to some labour problem only seek the

help of the Court. They have no faith in holding talks with the employer.