Collective Bargaining
The phrase “collective bargaining was first coined by Sidney and Beatrice Webb. This was widely accepted, particularly in the developed countries. Collective bargaining is a method that allows employees to negotiate as a group. Group bargaining usually takes place between an employer and a representative of an employee union. There are different reasons why employee unions may choose to negotiate with their employer. For example, some do it to improve workplace equality or encourage the employer to implement more standards that protect employees at work.
According to Harbison, “Collective bargaining is a process of accommodation between two institutions which have both common and conflicting interests.”
International Labour Organization (ILO) (1980) defines collective bargaining as an institutional procedure of joint determination of the rules to govern the terms and conditions of employment of the workers concerned and the labour management relations itself.
The Indian industry could not compete in foreign markets if it did not follow modem methods of production. Since modernization caused displacement of workers, it naturally invited hostility and the workers and management, therefore, had to come together in their viewpoint through collective bargaining.
The solution to common problems can come from legislative measures. Collective agreements provide the climate for a smooth progress as there is ample scope for a synthesis between demands from one side and concessions from the other.
1. In individual bargaining, the workers may be tempted to accept undesirable conditions and may thus bring down the general level of remuneration. Due to immobility of labour all workers are not in a position to desert a wage cutting employer. This immobility may be due to ignorance and illiteracy and industry-specific skill factors,
2. The speedy workers may accept a lower rate of payment which may yield them a reasonable amount of wages, but such a low rate of wages would yield insufficient earnings to a great majority of workers.
3. Sometimes employers are in a position to control the bulk demands of the labourers and they may through combine action, force the workers to accept low wages. Collective bargaining is the only device which can avert such combined action and prevent the creation of such monopolistic tendencies.
4. The market apparatus consisting of the two forces of demand and supply can settle only the problem of determination of wages Some of the non-wage issues such as the length of a working day, health and safety of the workers, speed operations, introduction of rationalization, measures for job security, etc. have to be settled by personal decisions and not by the forces of demand and supply.
5. Collective bargaining also provides some voice in the conduct and management of the industry. Workers now have a definite means for the exercise of real influence in the determination of labour-related matters affecting them every now and then.
6. To ensure continuity of production, workers and employers must shake hands and this makes it inevitable to make collective bargaining a regular feature of industrial life.
7. The problem of good human relations can be successfully tackled by the collective bargaining process.
Features/Characteristics of Collective Bargaining
Some of its essential characteristics may be enumerated as follows:
1. It is a group action as opposed to individual action and is initiated through the representatives of the workers and delegates of the management at the bargaining table.
2. It is flexible and mobile and not fixed or static. It has flexibility and ample scope for compromise for a mutual give and take before the final agreement.
3. It is a two-party process. It can succeed only when the labour and management want to succeed. There must be a mutual eagerness to develop the collective bargaining procedure, with a view to achieve harmony and progress. It can flourish only in an atmosphere which is free from animosity and reprisal.
4. It is a continuous process, which provides a mechanism for continuing and organized relationships between the management and the trade unions. The heart of collective bargaining is the process for continuing joint considerations and the adjustments of plants and problems.
5. The term itself is dynamic because the concept is growing, expanding, and changing.
6. It is industrial democracy at work.
7. It is not a competitive process but a complementary process that is each party needs something that the other party has, namely, labour can make a greater productive effort and management has the capacity to pay.
8. It is an art, an advanced form of human relations. To get a proof of this one only needs to witness the bluffing, the oratory, the dramatics, and the coyness mixed in an inexplicable fashion, which often characterizes a bargaining session.
Objectives
The basic objective of collective bargaining is to arrive at an agreement between the management and the employees determining mutually beneficial terms and conditions of employment.
This major objective of collective bargaining can be divided into the following sub-objectives:
a. To foster and maintain cordial and harmonious relations between the employer/management and the employees.
b. To protect the interests of both the employer and the employees.
c. To keep the outside, i.e., the government interventions at bay.
d. To promote industrial democracy.
Pre-requisites of Collective Bargaining
1. Freedom of Association: In order to achieve collective bargaining, it is essential to ensure that the denial of such freedom negates collective bargaining. In this respect it is significant to note that the International Labour Organization adopted the Convention No, 87 concerning “Freedom of Association and Protection of the Right to-Organize” which seeks to provide for freedom of association. India has, however, not, formally ratified that convention, perhaps due to administrative and constitutional problems, However, Article 19 (l) (c) of the Constitution of India guarantees “the right to form Associations or Unions” as a fundamental right.
2. Strong and Stable Trade Unions: For the success of collective bargaining, it is also essential that there should be strong, independent, democratic and well organized trade unions.
The unorganized labour is the hurdle in its success. In India, however, the unions are generally weak. Rivalry on the basis of caste, creed and religion is another characteristic of Indian trade unions which come in the way of successful collective bargaining. Division of unions on the basis of political ideologies further retards the growth of trade unions. Moreover: most of the workers are illiterate. Lastly, the financial-position of trade unions is weak, and some of them are even unable to maintain a proper office.
3. Recognition of Trade Unions: Recognition of Trade Unions as a bargaining agent is the backbone of collective bargaining. We have already discussed the problems relating to recognition of trade unions in the previous Chapter.
4. Willingness to Give and Take: The mutual trust and appreciation of the viewpoints of the management and union is also essential said the ILO. The fact of entering into negotiations implies that the differences between two parties can be adjusted by compromise and concession in the expectation that agreement can be reached. Obviously, if one or both sides merely make demands when they meet, there can be no negotiation or agreement.
Importance/Significance of Collective Bargaining
The need for and importance of collective bargaining is felt due to the advantages it offers to an organization.
The chief ones are as follows:
1. Collective bargaining develops better understanding between the employer and the employees: It provides a platform to the management and the employees to be at par on negotiation table. As such, while the management gains a better and deep insight into the problems and the aspirations of die employees, on the one hand, die employees do also become better informed about the organizational problems and limitations, on the other. This, in turn, develops better understanding between the two parties.
2. It promotes industrial democracy: Both the employer and the employees who best know their problems, participate in the negotiation process. Such participation breeds the democratic process in the organization.
3. It benefits the both-employer and employees: The negotiation arrived at is acceptable to both parties—the employer and the employees.
4. It is adjustable to the changing conditions: A dynamic environment leads to changes in employment conditions. This requires changes in organizational processes to match with the changed conditions. Among other alternatives available, collective bargaining is found as a better approach to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective negotiation: The direct participation of both parties—the employer and the employees—in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.
FORMS OF COLLECTIVE BARGAINING
The working of collective bargaining assumes various forms. In the first place, bargaining may be between the single employer and the single union, this is known as single plant bargaining. This form prevails in the United States as well as in India.
Secondly, the bargaining may be between a single firm having several plants and workers employed in all those plants. This form is called multiple plants bargaining where workers bargain with the common employer through different unions.
Thirdly, instead of a separate union bargaining with separate employer, all the unions belonging to the same industry bargain through their federation of that with the employer’s federation of that industry. This is known as multiple employer bargaining which is possible both at the local and regional levels. Instances in India of this industry wide bargaining are found in the textile industry. The All India Bank Employees Federation also bargained with the management of different banks in India on a multiemployer basis in 1955 and in 1957.
The common malady of union rivalry, small firms and existence of several political parties has given rise to a small unit of collective bargaining. It has produced higher labour cost, lack of appreciation, absence of sympathy and economic inefficiency in the realm of industrial relationships. An industry-wide bargaining can be favourable to the economic and social interests of both the employers and employees.
Process of Collective Bargaining
Harvard Law School’s Program on Negotiation describes the collective bargaining process as comprising five core phases:
Source: https://ebooks.inflibnet.ac.in/mgmtp01/chapter/collective-bargaining/
1. Preparation and Framing: In this phase both the school board and the union examine their own situation in order to develop the issues that they believe will be most important, including assessing ‘you’re interests as well as the interests of the other side’.
2. Bargaining Over How to Bargain: Here, the parties decide the ground rules that will guide the negotiations. This is where the logistics are determined, such as the rules for secrecy and the frequency of negotiating meetings.
3. Opening and Exploring: This phase involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as ‘brainstorming’.
4. Focusing and Agreeing: This stage comprises the time when ‘what ifs’ and ‘proposals’ are set forth and the drafting of agreements takes place.
5. Implementation and Administration: This stage is described as consisting of ‘effective joint implementation through shared visions, strategic planning and negotiated change.’
Factors Affecting Collective Bargaining
Several factors can affect collective bargaining power. Read about them below.
1. Market competition: A surplus of labour can weaken employees. The employer will easily be able to replace them. It can affect their collective bargaining power. The demand increase can lead to better pay and work conditions.
2. Economic conditions: The company workers can demand when the employer has the resources. Prosperous economic conditions can help achieve this. They can get better wages when the company is making good profits.
3. Skills and availability: Skilled workers are always in a better position to demand. They can negotiate when there’s a shortage of skilled workers. Unskilled people can find it difficult to demand more wages.
4. Unionization: A strong unity can provide workers with better resources and voices. They can form unions to demand their rights.
5. Government regulations: The regulations of a government for minimum wages and hours can help the workers. They can demand more than these levels.
The steps of collective bargaining
The step of collective bargaining helps the workers and the union to have a plan. They understand the strategy better and create goals. This process is necessary for a successful agreement that covers the issues. The union cannot present their arguments if it doesn’t understand the collective bargaining process. Read below the different stages.
Step 1: Preparation for Bargaining
During the first stage, a group of employees meets several times to decide what they want to negotiate. In many instances, this can refer to long-term issues that the union has been fighting for, like improvement in workplace diversity and inclusion. During this stage, it's also common for the employer to designate specialists to help them review documentation in preparation for negotiating with the union.
Step 2: Conducting Negotiations
Conducting negotiations usually take several rounds of bargaining. The union and management sides express the rationale behind their proposals. Some contract provisions remain predominantly the same from contract to contract while others, such as salary, are bargained with each contract. The parties may modify some sections, and either side may propose a new bargaining topic. State law and court cases determine the mandatory, permissive, and prohibited subjects of bargaining.
Step 3: Ratifying the Contract
The negotiations lead to a new agreement. The collective bargaining process includes all the workers. The new proposal reaches the union members. They often have a vote where the workers may reject or accept it. It includes an assessment of the new terms by all parties. The proposal returns to the negotiation stage if the members reject it. The terms will apply if the members accept that agreement.
Step 4: Resolving a Contract Dispute
If the parties cannot reach an agreement, state law generally specifies how the dispute can be resolved. Usually, the parties can use mediation, arbitration, and/or a strike or lockout to reach an agreement. Strikes (and lockouts) are infrequent in public education but are allowable in several states.
Step 5: Contract Settlement
The final terms come up as the parties renegotiate. They end the strikes and reach the middle ground. The specific clause or the contract’s final settlement happens. Both parties agree to the same and sign the contract. It leads to new terms that are enforceable.
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