Collective Bargaining

Collective bargaining was introduced in India for the first time in 1952. It is a
process in which chosen representatives of labour and management sit at the
bargaining table where they deliberate, persuade, try to influence, argue and haggle
and eventually they reach an agreement which they record in the form of labour
management contract.

Edwin B. Flippo – “Collective bargaining is a process in which the representatives

of labour organization and the representatives of business organization meet and
attempt to negotiate a contract or agreement which specifies the nature of the
employer – employee union relationship.”

The Fourth Five Year Plan emphasised on collective bargaining and on

strengthening the trade union movement for securing better labour-management
relations supported by recourse in large measure to voluntary arbitration.
At industry level, the best example is offered by the textile industry of Bombay and
Ahmedabad. The agreement between the Ahmedabad Mill owner’s association and
the Ahmedabad Textile Labour Association, which was signed on June 27, 1955
laid down the procedure to be followed for the grant of bonus and the voluntary
settlement of industrial disputes.

Functions of Collective Bargaining

Prof. Butler views the functions of collective bargaining as:-
 A process of social change – Collective bargaining improves and enhances
the status of the working class in the society
  A peace treaty - Collective bargaining serves as a peace treaty between the
employers and the employees.
 A system of Industrial Jurisprudence - Collective bargaining creates a
system of Industrial Jurisprudence. It serves as a method of introducing civil
rights into the industry.

Types of Collective Bargaining

1- Distributive Bargaining:
 Wherein one party wins over the other.
 also known as Conjunctive Bargaining or Zero-sum Bargaining and is
used as a negotiation strategy to distribute fixed resources like assets,
resources, money etc between both the parties
2- Integrative Bargaining:
 both the parties sit and try to resolve the problems of their common
interest.
 negotiation of a certain issue on which at least none of the parties lose.
 also known as cooperative bargaining as it tends to be more cooperative
than distributive bargaining.
3- Productivity Bargaining:
 both the employer as well as the employee enjoy the benefits in the form of
increased production and increased pay respectively.
 The workers are given the incentives as a result of increased productivity and
through this, the workers get encouraged and work hard to reach beyond the
specified level of productivity so as to gain additional benefits.
4- Composite Bargaining:
 along with bargaining for wages, the workers go a step ahead and also
express concern over the working conditions, environmental issues,
recruitment and training policies etc. so as to safeguard their interest.

Process of collective bargaining-

1) Preparing for negotiations- careful advance preparations by employers and

employees are necessary because of the complexity of the issue and the broad
range of topics to be discussed during negotiation.
2) Identifying bargaining issues- these can be wage related issues, supplementary
economic benefits (like pension plans, paid vacations etc.), institutional issues
like rights and duties of employers, employees, unions etc.) and administrative
issues (like seniority, employee discipline, employee health and safety etc).
3) Negotiating – it begins with each side presenting its initial demands and goes on
for days until the final agreement is reached, it is a battle of wits, playing on
words and threats of strikes and lockouts.
4) Settlement and contract agreement- after an initial agreement has been made,
the two sides usually return to their respective constituencies to determine
whether what they have informally agreed upon is acceptable. Another crucial
stage is ratification where the union negotiation team explains and puts the
agreement to the union members for a vote. If voted, this agreement is
formalized into a contract.
5) Administration of agreement- signing the agreement I not the end of collective
bargaining, rather it is the beginning of the process. It must be implemented
according to the spirit of the provisions of the agreement. But in day to day stress
of work environment, strict adherence to the provisions may not always be easy.
Pre-requisites or essentials of collective bargaining

1) Favourable political climate- the govt. and public opinion must be

convinced that collective bargaining is the best method of regulating
employment conditions.
2) Strong and stable unions- as required to bargain with the employers on
equal basis who can easily ignore a weak union on the plea that it hardly
represents the workers.
3) Recognition- collective bargaining cannot exist or begin until union is
recognized and regarded as an integral part of Industrial Relations.
4) Willingness to give and take- both employees and union leaders should
negotiate in a spirit of compromise and reciprocity otherwise bargain will
not be possible.
5) Negotiator’s authority- he should have full authority to bind their
constituents otherwise if they have to refer constantly back to their
respective organisations, it makes bargaining process ineffective.
6) Fair practices- collective bargaining is possible only in an atmosphere of
mutual trust and recognisation.
7) Positive attitude- both parties should have a problem solving and
positive attitude rather than a fighting approach.
8) Continous dialogue- a dead end must be avoided in negotiations, the talk
should continue.
9) Availability of data- facts and figures relating to employees and their
working conditions provide a rational basis for negotiations.
Though information on growth of collective bargaining is somewhat meagre, the
data released by the Labour Bureau show that the practice of determining wages
rates and employment conditions through Collective Bargaining has spread to most
of the major segments of the Indian Economy.
Conclusion
Perhaps the most significant benefit of collective bargaining is that both parties get
to know precisely what they can anticipate from each other and how they can use
their rights. This may help to reduce the likelihood of future confrontations. It also
has the potential to improve operational efficiency. Employees who join a union
have the assurance that they will not be fired or face reprisal from their employer.
Using this strategy effectively may lead to a more ethical manner of conducting
business on a large scale. Fairness and equality are just a few of the ideals it
advocates. These ideas have the potential to permeate other aspects of a person’s
life and encourage them to behave better towards others in general.