EMPLOYMENT RELATIONS

(MHAR 1083)
SEMESTER 1, 2020/2021

Individual Assignment

The Collective bargaining Process, Problems and

Suggestive factors for Effective and Successful
Collective Bargaining

Writer: Ezatullah Hamnawa

Matric No: MHA192054

SUBMITTED TO:
ASSOC. PROF DR NORHANI BAKRI

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Contents
Introduction...........................................................................................................................................4
What collective bargaining is?..............................................................................................................4
Collective Bargaining process:..............................................................................................................5
The first comprehensive model of collective bargaining comprises of five core stages:................6
1. Preparation:..............................................................................................................................6
2. Discussion:.................................................................................................................................7
3. Proposal:...................................................................................................................................7
4. Bargaining:................................................................................................................................7
5. Final Agreement:.......................................................................................................................7
The Second comprehensive model of collective bargaining process:..............................................8
1. Preparation for negotiation:.....................................................................................................8
2. Opening the negotiation:..........................................................................................................9
3. Signaling....................................................................................................................................9
4. Proposing..................................................................................................................................9
5. Packaging..................................................................................................................................9
6. Closing the agreement:.............................................................................................................9
Problems in Collective Bargaining Process:........................................................................................10
1. Competitive Process:...............................................................................................................10
2. Not Well-Equipped:.................................................................................................................10
3. Time to Protest:......................................................................................................................10
4. Where prices are fixed by the Government:..........................................................................10
5. The multiplicity of Trade Unions:............................................................................................11
6. Appointment of Low-Status Executive:..................................................................................11
7. Statutory Provisions:...............................................................................................................11
8. Fresh Demands at the Time of Fresh Agreement:..................................................................11
9. Agreements in Other Industrial Units:....................................................................................11
10. Weak unions:.......................................................................................................................12
11. The attitude of Management:.............................................................................................12
12. Political interference:..........................................................................................................12
13. Outsiders in the process of collective bargaining...............................................................12
14. Industrial relations framework...........................................................................................12
Suggestive factors for effective and successful collective bargaining................................................13
1. Freedom of association...........................................................................................................13
2. Trade union recognition..........................................................................................................14
3. Trust........................................................................................................................................14

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 4. Agreement review...................................................................................................................14
5. Proper communication...........................................................................................................14
6. Support of labor administrative authorities...........................................................................14
7. Bargaining Agent.....................................................................................................................14
8. Commitment and Determination for Peaceful Resolution.....................................................14
9. Reliance on Facts rather than emotions.................................................................................15
10. Mutual Recognition of their Rights and Responsibilities...................................................15
11. Honoring Agreements.........................................................................................................15
12. Faithful Interpretation........................................................................................................15
Conclusion...........................................................................................................................................16
Reference............................................................................................................................................16

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Introduction
The Collective bargaining process is the most crucial phenomena in today's context
between employees’ trade unions and employers in solving employee’s related issues. Both
parties (employer and employees) are strong in power so they don't willing to lose in the
collective bargaining process. So therefore the collective bargaining process can be
concluded with a win and win situation as a collective solution.

Collective bargaining can be called a technique, which adopted by the employer and
workers association to solve their problems with/without the help of a third party. The
ultimate purpose of collective bargaining is to reach a kind of agreement that is acceptable for
both employer and employee association which are involved in labor-management relations.
The term "collective bargaining” was coined and first used in 1891 by Sydney and Beatrice
Webb, and Great Britain is called to be the "Home of Collective bargaining". After that, the
president of the American Federation of Labor Samuel Gompers, eventually considered
'collective bargaining' as the most crucial point to determine the terms and conditions of
employment. Slowly, the term collective bargaining came to be too extensively used by trade
unions, employers. Governmental organizations, scholars, and even by social organizations
and others.

As know familiarized with the term of collective bargaining and gain a clear view of
collective bargaining, so in this study, I first present an overview of collective bargaining
under the title of what collective bargaining is? Then this study proceeds to explain the
collective bargaining process in two different models of the collective bargaining process.
And then proceed with the obstacles or hindrance of collective bargaining in the international
context. This study also covers the key negotiation techniques and skills, to gain the mutual
bargaining agreement and the care that needs to be exercised on agreements.

What collective bargaining is?

Onabanjo in 2013 illustrated that collective bargaining was first used by Beatrice
Potter (1891) in her book 'Co-operative Movement in Great Britain'. But the phrase of
collective bargaining didn't get recognition until in the book 'Industrial Democracy' that she
wrote together with her husband Sydney Webb in 1897. The term has assumed several
definitions in use (Chigude, 2016). The following are some of the modern-day definition:

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 “Collective bargaining is defined as the continuous relationship between an employer
and a designated labor organization representing a specific unit of employees for the purpose
of negotiating written terms of employment “(Somers, 1980).

Beatrix and Sidney Webb explained collective bargaining as "...one method whereby
trade unions could maintain and improve their members' terms and conditions of employment
(Bendix, 2001). This description is almost correct, because; Collective bargaining is a union-
related process, and the initial aim of collective bargaining is to achieve improved
employment, employment conditions for trade unions members.

Bendix (2001) described collective bargaining as: "a process, necessitated by a

conflict of needs, interest, goals, values, perceptions and ideologies, but resting on a
basic interdependency and commonality of interest, whereby employees/employee
collectives and employers/employer collectives, by the conduct of continued negotiation
and the application of pressure and counter pressure, attempt to achieve some balance
between the fulfillment of the needs, goals and interest of management on the one hand and
employees on the other - the extent to which either party achieves its objectives depending
on the nature of the relationship itself, each party's source and use of power, the power
balance between them, the organizational and strategic effectiveness of each party, as well
as the type of bargaining structure and the prevalent economic, sociopolitical and other
conditions". But Le Grange(1996) define collective bargaining as “ a process of decision-
making between employers and trade unions, with the purpose of arriving at an agreed set
of rules governing the substantive and procedural terms of the relationship between
them, and all aspects of and issues arising out of the employment situation”.

Collective bargaining has also been defined Rycroft & Jordaan, (1992) as: “a
voluntary process for reconciling the conflicting interests and aspirations of management and
labor through the joint regulation of terms and conditions employment" Collective bargaining
according to Grogan (2003) is “a process by which employers and organized groups of
employees seek to reconcile their conflicting goals through mutual accommodation”. From an
overview of the above mention, the definition can be concluded the collective bargaining as a
process, that employers and employees can resolve their conflict by making a collective
agreement which is acceptable to both parties, And now I am going to the next stage, want to
explain the collective bargaining process, throw two different models of the collective
bargaining process.

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Collective Bargaining process:
It is known to us that collective bargaining is normally a process of negotiation that
goes between the employees’ representative and management of the organization and
Negotiation involves any kind of discussion such as, formal or informal, to reach an
agreement. In this negotiation process employees are portrayed as a union or other trade
organization, and then collective bargaining with the employer to determine the employment
condition. The research shows that the collective bargaining process didn't have approved and
accepted models and research also find that there are different models of collective
bargaining such as firm-level, state level, national level, and international level and so on the
collective bargaining process model. So there I want to explain the two most comprehensive
model of the collective bargaining process that can be applied in all form of negotiation:

The first comprehensive model of collective bargaining comprises of five

core stages:
This first comprehensive model of collective bargaining is consist of five core step which are
illustrated in figure 1.

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Flegaldictionary.net%2Fcollective-
bargaining
%2F&psig=AOvVaw3oclRY6zFD9yxl__dnuOGN&ust=1612332016370000&source=images&cd=vfe&v
ed=0CAIQjRxqFwoTCIDC8_3Cyu4CFQAAAAAdAAAAABAD

This model is made of five core components, first: preparation, second: Discussion, third:
proposal forth bargaining, and fifth Final Agreement, So let's explain these step briefly one
by one:
1. Preparation: In this step of collective bargaining, a bargaining committee is formed
first, that consist of both the employer and employee representative. In this step first,
both representatives of the employer and the union review their current situation. It is

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 then preceded by a stage in which a decision is made regarding matters/ issues of
concern that they deem to be the most important to be raised/included in the negation
process. The representative also tried to figure out the justified reason for the selected
issue for the negotiation process. (Ratnam, 2006).

2. Discussion: In this step the discussion goes on between the representative of the
parties about the fundamental rules that they would have to abide by or follow during
the negotiating process. Collective bargaining isn't also excluded from the "saying"
that well begin of the negotiation process is half done. Therefore to reach the
collective bargaining agreement, among the members of the organization first mutual
trust and understanding should be created.
3. Proposal: As all we know, “that propose means that the initial opening statement and
possible options those to resolve them.” So this step of the collective bargaining
process also point out the similar thing in words, this step can also be explained as
“brainstorming” in which an exchange of message and viewpoints takes place
between the parties involved in the bargaining process.
4. Bargaining: The parties which are involved in the collective bargaining process a
problem-solving mindset should be possessed. Then the collective bargaining process
will be the easy one. This step involves the time when 'what ifs' and 'supposals' are
arrangements are forth and the draft of agreements take place.
5. Final Agreement: In this step, a permanent resolution is achieved where t both
parties make an agreeable agreement where both of them concise. The consignment is
signed by both parties and they agree to comply with the terms and conditions printed
on it. Both parties agree to accept the common decision made after addressing the
topic or issue of discussion in a mutually beneficial manner (Ratnam, 2006). They
also commit to supporting the implementation of the agreement effectively through
the collective effort of employers and employees through mutual visions, strategic
planning, and negotiated transition.

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The Second comprehensive model of collective bargaining process:
This second model of collective bargaining passes through broad six steps such as
Preparation for negotiation, Opening the negotiation, Signaling, Proposing, Packaging,
Closing the agreement:

Collection of information

Choice of the negotiating team

Preparting for Negotiation
Identification and analysis of
the issues
Oprning the Negotiation
Strategic planning
Signalling
CB Process
Proposing

Packing

Closing the Agreement

Source: Writer

1. Preparation for negotiation: this step begin starting the negotiation, and the
negotiation team need to learn about the history of the conflict issue to led up to the
point of negotiation, for example: what is conflict, who are involved, and what
everyone expects from the collective bargaining, for better understanding, there are
four factors in the preparation step, that is explained every one followed:
I. The collection of information. This factor is about the collection of
information that is relevant to the problem on the hand, and unions and
employers prefer to compile related information. The information may have
an impact on the determination of the final agreement decision.
II. The choice of the negotiating team. The negotiation needs many skills
because negotiators ought to be able to read each other's attitudes as well as to
assess the authority of others. So, therefore, the selection of the negotiating
team is very crucial because this is where the parties conduct their strengths at
the bargaining table.

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 III. The identification and analysis of the issues. In negotiating and opening
demands, negotiating ranges and fallback positions are included in this factor
for each issue is established.
IV. Strategic planning. This factor is consists of evaluating the environment in
which discussions can be held and determining power realities, the use of
resources, and the information to be provided for employees and the public.
2. Opening the negotiation: In general, the first negotiation session is an
incredibly important opportunity in which the bargaining environment is established,
the bargaining boundaries are formed, justified demands, and offer deceptive efforts
are made to manipulate the expectations of the other party. (Finnemore and et al,
1994). The actual collective bargaining process can be broken down into the
following three phases:
3. Signaling. After both sides of the bargaining have presented their requirements and
addressed their positions, they continue to signal each other the ways in which they
are willing to move.
4. Proposing. After the signaling stage, cautious proposals are going to emerge. The
proposals must be treated repeatedly and there must be established and written down.
5. Packaging. This phase is too crucial because this is the place where the proposals
are emerged and designed by both parties into packages that are acceptable to one
another.
6. Closing the agreement: Harrison (2005) explained that At this point, the reality
of power between parties would have to be carefully assessed. For instance, are union
strategies viewed as sufficiently disruptive or unreasonable that an employer thinks
that, a strike must be precipitated or planned lockout, irrespective of the cost in terms
of lost production and damaged relationships? Such situations can be resolved only
with an open confrontation and sometimes the new power reality that results provides
a greater measure of respect and realism in future relationships. (Finnemore & van der
Merwe, 1994).

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Problems in Collective Bargaining Process:
The main purpose of the development of the collective bargaining technique is to
improve relationships between staff and management and further maintain peace in
industries. The success in collective bargaining lies in the behavior of both management and
employees, which is not inconsistent with the spirit of collective bargaining. There are
several certain problems that hinder the growth of collective bargaining. And the following
are some factors or activities that act as hindrances in the effective collective bargaining
process:

1. Competitive Process:

Collective bargaining process becomes a competitive process while management and

labour compete with each other at the negotiation table in general, because a condition
arises where the attainment of the one-party objectives appears to conflict with the
initial objectives of another party, in this case, the collective bargaining cannot
precede successfully, and the collective bargaining process face with problems.  

2. Not Well-Equipped:
Both parties (management and employees) representative come to the negotiation
table without preparation and start a discussion without being fully equipped with
information, that can easily be collected from the company's records. In this situation,
the collective bargaining process can't proceed successfully and is faced with a
problem.

3. Time to Protest:
The immediate objective of the workers representative is to gain any other kind of
monetary, this happens while the economy is in good condition and the manager has
the ability to pay. But R.A (2017) argues that in the period of recession, where
demand for the goods and profits are falling, it is very difficult for the employer to
fulfill the workers' demands, maybe even resorting to retrenchment or maybe even
concluding collective bargaining is not a response to such a situation.

4. Where prices are fixed by the Government:

In industries, where the prices of goods are fixed by the Government, it becomes very
difficult for the company to fulfill the requirements of employees which will
inevitably lead to an increase in the cost of the products. Whereas the supply price to

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 the customers cannot be increased. That would either decrease the company's
revenues or boost losses. In other words, that will lead to the closing of the job, which
is not in the workers' interest again so in this situation while the prices are fixed it
makes it more difficult and complicates the collective bargaining process.

5. The multiplicity of Trade Unions:

One great problem in collective bargaining is the multiplicity of trade unions. In a
multiple trade union situation, also a well-recognized union with a long-running,
stable, and largely positive relationship with the company, adopts a radical approach
as its deliberate strategy.
R.A (2017) point out that the unions often do collective bargaining for the purpose of
negotiating with the employer, in a situation while the unions merge with each other,
they make contradictory demands, which potentially confuse the employer and the
workers, in this case, the collective bargaining process cant precede well and face
with problems.

6. Appointment of Low-Status Executive:

One of the problems or hindrances in the collective bargaining process is that a low-
status executive deputies from management for bargaining with the employees. Such
an executive has no power on behalf of the management to commit anything. It
clearly shows that the management is not concerned at all and other ways of settling
disputes are followed by the union leaders.

7. Statutory Provisions:
The regulatory and participative provisions found in the Payment of Wages Act, the
Minimum Wages Act and the Payment of Bonus Act, etc., also impose limitations or
problems for the collective bargaining process because these provisions are legislative
and are not negotiable.

8. Fresh Demands at the Time of Fresh Agreement:

While the employee's representatives come up with some new demands at the time
that the old deal is about to expire or even before that and Also in a situation when
the industry is running into losses or even during the crisis era, certain demands are
pressed. If management accepts the demand for higher pay and other benefits, the
works would like to be closed, so new demands at the time of fresh agreement can
make problems in the collective bargaining process.

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9. Agreements in Other Industrial Units:
A prosperous manufacturing unit in the same area may agree on a significant increase
in wages and other benefits with the trade unions, whereas a losing company cannot.
There is always Pressure to grant wages and benefits comparable to those given in
other (relatively prosperous) units in the same area is often imposed on the losing
sectors and this also can be a kind of hindrance for the collective bargaining process.

10.Weak unions:
The process of collective bargaining mainly relies on the strength of unions. Inter and
intra-union competition, poor financial position, and non-recognition are marked by
unions. During negotiations, weak trade unions can not initiate strong arguments.

11.The attitude of Management:

In a situation, while employers can't read the writing on the wall, they use power in
the collective bargaining process and also don't support appreciate and accept the fact
that unions remain in nearly equal bargaining power. These negative behaviors of
management make obstacles to the collective bargaining process.

12.Political interference:
Approximately all unions are associated with one political party or another. In the
smooth functioning of the union, political parties interfere. While the political parties
make interference during the negotiation in the situation when both parties are making
negotiation, this faces the collective bargaining with difficulties because every
political party is working for their own benefits (IOE, 2016).

13.Outsiders in the process of collective bargaining

In 1996, the Trade Unions Act permits outsiders to be the office bearers of a union to
the extent of half the total number of office-bearers. So, this permits one to be the
chief of the union who does not currently work in the industry. Sometimes, in the
relationship between the union and the employer, a fired employee working as a union
leader can generate difficulties. However, experience reveals, that outsiders with no
understanding of the context of labor problems, the history of the labor movement, the
origins of trade unionism and the technique of industry, and even little general
knowledge take care of the labor union and become the self-appointed custodian of
the welfare of the workers, therefore outsider that didn’t have the knowledge about
the employee's problems, history of worker movement and more can face the
collective bargaining process with difficulties. (IOE, 2016).

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 14.Industrial relations framework
Collective bargaining is a process that is kind of voluntary and it presupposes an
adequate framework for industrial relations which provides scope for the successful
interaction of the parties within the parameters laid down by the requirement for
civilization to exist peacefully. it was perceived that the conditions necessary for such
interaction were either non-existent or not possible, thereby making the framework of
industrial relations less hospitable for the development of a collective bargaining
agreement in machinery (IOE, 2016).

Suggestive factors for effective and successful collective bargaining

Now that we gain knowledge about the problems or hindrance of the collective
bargaining process, so now I want to describe the factors or elements for effective and
successful collective bargaining with organization and trade unions on the basis of my
research.

Review of
Freedom of Agreement 7 Bargaining Agent
association 1 6
Commitanent and
Trade Union 2 8 determination for Peaceful
recognition resolution
Effective and successful
Support of Labor 3 Reliance on facts rather
collective bargaining 9
Administrative Authorities than emotion

4 Mutual Recognition of
Trust 10 other rights and
responsibilities
5 12 11 Honoring Agreement
Proper Communication
Faithful Interpretation

Source: Writer

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1. Freedom of association
The problem will be solved well when there is proper freedom of speech for all. And
it's easy to understand each other when you communicate openly and for the union
and management, this would be productive.

2. Trade union recognition

In order to solve every problem or issue, the union should be recognized and
respected, because when it is not recognized, incorrect or wrong issues are created
that spoil the whole organization.

3. Trust
Elements of trust between the union and management should be existing.
Management should work to gain trust in the issues and well-being of the union.

4. Agreement review
The agreement that is formed after collective bargaining should be properly reviewed
and there should be no negligence in obeying with agreed issues.

5. Proper communication
For effective collective bargaining Proper communication should be established
between the union and the management and for a new mater union, decision making
and policy-making should be informed and should take part and it should be
communicated to lower management when any decision is made in top management.

6. Support of labor administrative authorities

For successful collective bargaining, the support of the labor organization's authority
is essential. They should, provide conciliation services and provide the legal
framework to operate when needed, they should ensure secure conformity with the
agreement and suggest various dispute resolution approaches (Shahzad, Fakhar, and et
al. 2012).

7. Bargaining Agent
There must be knowledgeable, skilled, effective, and enlightened bargaining agents
for the effectiveness of the collective bargaining process, and there must be a balance
of power between the parties and getting a recognized trade union that can be the sole
bargaining representative of all the workers in an organization is crucial and it is
important to have a responsible and strong labor union, that they should bargain
effectively, taking into account the needs of the collective bargaining stakeholders.

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8. Commitment and Determination for Peaceful Resolution
For successful collective bargaining both parties, representatives of employers, and
workers should be committed and determined to arrive at an agreed solution. Both
parties should be determined to settle their disagreements on their respective claims in
a peaceful way and they need to have open minds, listen to and respect the concerns
and points of view of each other and have some flexibility to make adjustments to the
requirements made. (IOE, 2016).

9. Reliance on Facts rather than emotions

For successful collective bargaining, both sides of the negotiation should be able to
identify grievances, protection, and sanitation problems on a routine basis and take
appropriate remedial steps. For this, parties should focus on facts and statistics to
support their point of view, both parties should held the bargaining process in the
cooperate environment and should avoid unfair working conditions.

10.Mutual Recognition of their Rights and Responsibilities

There should be unanimity between labor and management on the organization's and
employees' core goals and mutual recognition of their rights and obligations.
Recognitions of the mutual goals and rights can help a lot make the collective
bargaining process successfully.

11.Honoring Agreements
When the consensus arrived, it should take a shape of an agreement. It is necessary to
put the arrangement down in writing. It must be honored and fairly implemented by
both parties.

12.Faithful Interpretation
While the collective agreement is reached, so both parties should implement it
faithfully, the terms and conditions in the agreement should be transparent and must
be prepared in simple language and the common vocabulary. In the arrangement, a
provision for negotiation would be included and could become effective where there
is some disagreement about the interpretation of the tenancy and conditions.
Therefore, for the effectiveness of collective bargaining, the following prerequisite
conditions must be kept in mind. Collective negotiation can fail or fail in the event of
a lapse of any terms and conditions.

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Conclusion
In any kind of organization, collective bargaining is an important mechanism for
dispute resolution. Since human resources are the most crucial aspect of any organization, it
requires time to be successful in negotiation. But the union and management need to have
trust. As there is a change of attitude toward union and management collective bargaining
that is attributable to misconceptions and confusion about the system as well as management
negligence and conflict occur between management and employees.

So For the solution and best understanding of the conflicts between employer and
employees, in this paper, I explained the two most comprehensive models of collective
bargaining and after that, I explain some factors that can make obstacles or hindrances for the
collective bargaining process and some suggestive factors for the effective and successful
collective bargaining process; if they are implemented properly then any organization can
have effective collective bargaining, which is necessary for becoming a successful
organization.

Reference

1. Chigudu, Daniel. (2016). Collective bargaining: an analysis of hurdles and

applicability in the public sector. Journal of Governance and Regulation
10.22495/jgr_v4. https://www.researchgate.net/publication/296485653.
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South African context. Stellenbosch: University of Stellenbosch. (Thesis - M.
Law).
3. SOMERS, G.G. (1980). Collective Bargaining: Contemporary American
Experience. Madison- WI: Industrial Relations Research Association.
4. Bendix, S. (2001). Industrial relations in South Africa. 4" ed. Lansdowne: Juta.

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5. Le Grannge, M. (1996). Collective bargaining in the public sector with specific
reference to the South African Police. Port Elizabeth: University of Port (Thesis -
Master).
6. Ryciioft, A. and Jordaan, B. (1992). A guide to South African labour law. 2nd ed.
CapeTown, Juta.
7. A. Flanders ed. (1969). Collective Bargaining, Penguin Books. Middlesex,
England.
8. ILO. (1960) Collective Bargaining: A Workers Education Manual,” New York.
9. Ratnam, Venkata. (2006). Industrial Relations, Oxford University Press, 2006.
10. Finnemore, M. and Van Der Merwe, R. (1994). Introduction to industrial
relations in South Africa. 3d ed. Natal: Lexicon Publishers.
11. R.A, Bini, (2017). Causes of Declining Collective Bargaining. International
Journal of Science and Research 2319-7064.
12. IOE. (2016). Strategic Collective Bargaining: An Introduction for Employers.
Switzerland.
13. Shahzad, Fakhar, and et al. (2012). Collective Bargaining and Its Implementation:
A case study of HBFC in Pakistan VOL 3, NO 9, Interdisciplinary Journal of
Contemporary Research in Business.
https://www.researchgate.net/publication/329355606

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