Meaning:

Collective bargaining is a process of negotiating between management and workers represented by their

representatives for determining mutually agreed terms and conditions of work which protect the interest

of both workers and the management. According to Dale Yoder’, “Collective bargaining is essentially a

process in which employees act as a group in seeking to shape conditions and relationships in their

employment”.

Michael J. Jucious has defined collective bargaining as “a process by which employers, on the one hand,

and representatives of employees, on the other, attempt to arrive at agreements covering the conditions

under which employees will contribute and be compensated for their services”.

Thus, collective bargaining can simplify be defined as an agreement collectively arrived at by the

representatives of the employees and the employers. By collective bargaining we mean the ‘good faith

bargaining’. It means that proposals are matched with counter proposals and that both parties make every

reasonable effort to arrive at an agreement’ It does not mean either party is compelled to agree to a

proposal. Nor does it require that either party make any specific concessions.

Why is it called collective bargaining? It is called “collective” because both the employer and the

employee act collectively and not individually in arriving at an agreement. It is known as ‘bargaining’

because the process of reaching an agreement involves proposals and counter proposals, offers and

counter offers.

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:

1. To foster and maintain cordial and harmonious relations between the employer/management and the

employees.

2. To protect the interests of both the employer and the employees.

3. To keep the outside, i.e., the government interventions at bay.

4. To promote industrial democracy.

Importance:

The need for and importance of collective bargaining is felt due to the advantages it offers to an

organisation.

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 organisational

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 organisation.

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

organisational 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.

Introduction

In the world of industry and commerce, a means has emerged in the past century. This is known as the

practice of negotiation. Both the parties i.e., the management and the employees within industrial

content and context use to go with this method to sort out differences, arising out of terms and

conditions of service and thereby resolve, mutually, the disparities as far as possible. Historical review of

the propagations of industrial and commercial sectors in the economy proves beyond doubt the prolific
effectiveness of this procedure in establishing peaceful and orderly relations at the place of work. Thus,

modus operandi of negotiation i.e., the mutual settlement of perceived discrepancies between the

management and the workers acts as a facilitator to induce a process that is acknowledged as Collective

Bargaining across the globe. The work atmosphere of cooperation among all those engaged in the

enterprise ensures its course of success, altogether. The development of collective bargaining has been

closely associated with the growth of trade unions in all countries and sometimes with the growth of

employers associations, also. The movement of trade union can be traced back to the developmental

history of the crafts unions of skilled workers in the early part of the nineteenth century with references

to British and European industries. Indeed, the craft unions were organized to protect workers’ skills by

preventing employers from under cutting jobs rates.

The craft unions discovered that it was only by strengthening their organization and forcing the issues at

district and national level, the genuine standards could be achieved, and it was only at the end of

nineteenth century that general unions began to build up in Britain and other countries to bargain with

the employers on behalf of the employees. A collective bargain is an agreement made by or on behalf of

a group, and collective bargaining is, therefore, the method by which a group agreement is reached

between the representatives of employers and the employees. Thus, collective bargaining is the process

of fixing the terms of employment by means of bargaining between an organized body of employees

and an employer or association of employers, usually acting through duty authorized agents. The

essential thing is that collective bargaining intends to put the workers on a footing of equality with

employers at the occasion of a bargaining process in regards to the terms of employment. The

bargaining process within industry identifies an exchange procedure where at least two parties try to
settle on the issues relating to the terms and conditions of employment, services and compensation etc.

It is to be noted that in collective bargain both the interested parties mutually agreed upon to carry out

this process which cannot be initiated by the decree or some other means from outside. Beatrice Webb,

a famous socialist writer and speaker, is credited with the coinage of the term “Collective Bargaining”.

Accordingly, collective bargaining takes place when a number of work-people enter into negotiation as

bargaining unit with an employer or groups of employers with the object of reaching agreement on

conciliations of employment for the work- people concerned. Collective bargaining has been defined in

the Encyclopaedia of social Sciences as “a process of discussion and negotiation between two parties,

one or both of whom is a group of persons acting in concert. The resulting bargaining is an

understanding as to the terms or conditions under which a continuing service is to be performed. More

specially, collective bargaining is the procedure by which an employer or employers and a group of

employees agree upon the conditions of work”. Collective bargaining has also been defined as the

process of employer-union negotiation for the purpose of reaching agreement as to the terms and

conditions of employment for a specified period. The National Association of Manufactures has stated

that in its simplest definition. Accordingly, the process of collective bargaining is a method by which

management and labour may explore each other’s problems and view points, and develop a frame work

of employment relations within which both may carry on their mutual benefit. In a workers education

manual issued by the International Labour Office, collective bargaining is defined as “negotiations about

working conditions and terms of employment between employer, a group of employers or one or more

employers’ organizations, on one hand, and one or more representative workers’ organizations on the

other, with a view to reaching agreement”. Furthermore, it is stated to be “the terms of an agreement
that serves as a code, defining the rights and obligations of each party in their employment relations

with one another; it fixes a large number of detailed conditions of employment ; and during its validity

none of the matters it deals with care in normal circumstances give grounds for a dispute, concerning on

industrial worker”. Whatever, definition may be accepted, the essence of collective bargaining,

however, lies in the readiness of the parties to manifest the attitude of mutual acceptance. Collective

bargaining deals with the emotions of people as well as with the logic of their interests.

Constituents of Collective Bargaining

There are three distinct steps in the process of collective bargaining; (1) the creation of the trade

agreement, (2) the interpretation of the agreement, and (3) the enforcement of the agreement. Each of

these steps has its particular character and theme, and therefore, each requires a special kind of

intellectual and moral activity and machinery. 1. The Creation of the Trade Agreement In negotiating the

contract, a union and management present their demands to each other, compromise their differences,

and agree on the conditions under which the workers are to be employed for the duration of the

contract. The coverage of collective bargaining is very uneven; in some industries almost all the workers

are under agreement, while in others only a small portion of the employees of the firms are covered by

the agreement. The negotiating process is the part of collective bargaining more likely to make headline

news and attract public attention; wage increases are announced, ominous predictions about price

increases are reduction in employment are made. And it is in the negotiating process that strikes and

threats of strikes are most liable to occur, particular strikes which shut down an entire industry
2. The Interpretation of the Agreement The administrative process is the day-to-day application of the

provisions of the contract to the work situation. At the time of writing the contract, it is impossible to

foresee all the special problems which will arise in applying its provisions. Sometimes, it is a matter of

differing interpretations of specific clause in the contract, and sometimes, it is a question of whether the

dispute is even covered by the contract. Nevertheless, each case must somehow be settled. The spirit of

the contract should not be violated. The methods that management and the union pointy adopt for this

purpose constitute the administrative process

. 3. Enforcement of the Agreement Proper and timely enforcement of the contract is very essential for

the success of collective bargaining. If a contract is enforced in such way that it reduces or nullifies the

benefits expected by the parties, it will defeat basic purpose of collective bargaining. It may give rise to

fresh industrial disputes. Hence, in the enforcement of the contract the spirit of the contract should not

be violated.

However, new contracts may be written to meet the problems involved in the previous contract.

Furthermore, as day-to-day problems are solved, they set precedents for handling similar problems in

future. Such precedents are almost as important as the contract in controlling the working conditions. In

short, collective bargaining is not an on-and-off relationship that is kept in cold storage except when

new contracts are drafted. Rather it is continuously, going relationship that takes on new dimensions

each day.