Collective Bargaining

Meaning of Collective
Bargaining
Collective Bargaining is a system and a technique of
resolving an industrial dispute through negotiations
between employers and the representatives of
employees without any help of an arbitrator.
Collective bargaining is that arrangement whereby the
wages components of remuneration and conditions of
employment of workman are settled through a bargain
between the employer and the workman collectively
whether represented through their union or by some of
them on behalf of all of them.

 It means bargaining between an employer or group of

employers and a bona fide Labour Union.
Collective bargaining is made of 2 words
Collective : which implies group action through its
representatives
Bargaining : which suggests negotiating
Thus it implies, collective negotiation of a contract
between the managements representatives on one side and
those of the workers on the other.

Definitions
Collective bargaining is a mode of fixing the terms of
employment by means of bargaining between an organized
body of employees and an employer or an association of
employers usually acting through organized agents.
R.F.Hoxie

The resolution of industrial problems between the

representatives of employers and the freely designated
representatives of employees acting collectively with a
minimum of government dictation.
Cox

 Collective Bargaining is a process in which the

representatives of a labour organization and the
representatives of the business organization meet and
attempt to negotiate a contract or agreement which specifies
the nature of the employee-employer union relationship
Edwin B.Flippo
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 which employers and
a group of employees agree upon the conditions of work.
Encyclopedia of Social Sciences

Characteristics
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It is a group action as opposed to individual action

and is initiated through the representatives of
workers.
It is flexible and mobile, and not fixed or static.
It is a two-party process.
It is a continuous process.
It is dynamic and not static.
It is industrial democracy at work.
Collective bargaining is not a competitive process but
is essentially a complementary process.
It is an art, an advanced form of human relations.

Need of Collective Bargaining

It helps in solving the industrial disputes.
Secure a prompt and fair redressal of grievances.
Establish uniform conditions of employment with a
view to avoid industrial disputes and maintaining
stable peace in the industry.
Helps redress worker grievances promptly and fairly.
Avoid interruptions in work which follow strikes, goslow tactics and similar coercive activities.
Lay down fair rates of wages and norms of working
conditions.
Achieve an efficient operation of the plant and
Promote the stability and prosperity of the industry.

Importance
From the managements point of view
1. Collective bargaining helps in reducing labour problems
to the minimum and in maintaining cordial relations
between labour and management.
2. Collective bargaining opens up the channel of
communication between the workers and management
thus increasing worker participation in decision making.
3. Collective bargaining helps to create a sense of job
security among employees.
4. Collective bargaining makes simpler for the
management to resolve issues at the bargaining level
rather than taking up complaints of individual workers.

 From the Employees point of view

1. Collective Bargaining helps to develop a sense of
responsibility and accountability among the
employees.
2. Collective Bargaining increases the morale and
productivity of employees.
3. It helps in securing a prompt and fair settlement of
grievances.
4. Effective Collective Bargaining machinery strengthens
and gives value to the trade unions movement.
5. The discrimination and exploitation of workers, if any,
is constantly monitored and addressed.

 From the societys point of view

Collective bargaining leads to
industrial peace in the country which
in turn helps to increase the pace of a
nations efforts towards economic and
social development.
It helps in implementation of labour
legislation.

Essential Conditions for Success of

Collective Bargaining
There must be a change in the attitude of employers and
employees. It is an approach which indicates that the two parties
are determined to resolve their differences in their respective
claims in a peaceful manner.
The employers and employees should enter upon negotiations
on points of difference or on demands with a view to reaching
an agreement.
To ensure that collective bargaining functions properly, unfair
labour practices should be avoided and abandoned by both sides.
When negotiations result in an agreement, the terms of the
contract should be put down in writing and embodied in a
document.

 Collective bargaining should be based on facts and

figures.
Once an agreement is reached, it must be honoured
and fairly implemented.
Both parties need to have an open mind and a
positive attitude. They should listen to and try to
understand the other persons view point and
limitations.
A provision for arbitration should be incorporated in
the agreements, which should become operative when
there is any disagreement on the interpretation of
its terms and conditions.

Causes for Failure of Collective

Bargaining
Unfair or corrupt labour practices.
Non availability of factual data.
Failure on the part of management to
recognize the trade union.
Politicization of issues.
Multiplicity of trade unions.
Unequal strength of parties participating in
the collective bargaining process.
Lack of objectivity in addressing and
handling a grievance.

Process of Collective Bargaining

1.

Following steps are involved in the process of

Collective Bargaining
Preparation
Reason for negotiating
Union leaders have to be in touch with the rank and
file members to get an idea of their views and needs.
Both the parties must have the comparative data
regarding terms of practice and percentage wage
increase in other firms
The management needs to settle internal policy
issues, regarding what concessions to make, wages
to pay and changes that they are willing to make.

The union team also needs to come

together to decide on their strategy
and priorities.
Putting together of a negotiation team.
The negotiation team should consist of
representatives of both the parties
with adequate knowledge and skills for
negotiation.

2. Discussion : parties decide the ground

rules that will guide the negotiations. The
principal negotiator is from the
management team and he leads the
committee.
3. Proposal : Chief negotiator then puts forth
the initial opening statements and the
possible options that exist to resolve them.
Both parties then put forward their
arguments and counter arguments.

4. Bargain : here the bargaining process starts

in this stage what if and suppose are set
forth and the drafting of agreements take
place.
5. Settlement : a consensual agreement is
reached upon wherein both the parties agree
to a common decision regarding the problem.
This stage consist of effective joint
implementation of the agreement through
share vision, strategic planning and negotiated
change.

The result of Collective Bargaining procedure

is called the collective bargaining agreement
(CBA). It may be in the form of procedural
agreements or substantive agreements.
Procedural agreements : This includes
procedures in respect of individual
grievances, disputes and discipline.
Substantive agreements : deals with issues
such as basic pay, overtime premiums,
bonus arrangements, holiday entitlements,
hours of works, etc.

Alternatives to Collective
Bargaining
Alternative Dispute Resolution (ADR)
is a term for describing the process of
resolving disputes in place of
litigation. It includes arbitration,
mediation, conciliation, expert
determination and early neutral
evaluation by a third person.