UNIT-1

NOTES
MBA (Dual Specialization) SEMESTER IV
HRDS402: Negotiation & Conflict Management

Collective Bargaining
Collective Bargaining Definition

Definition of collective bargaining

According to Dale Yoder, “Collective bargaining is the term used to describe a situation in
which the essential conditions of employment are determined by the bargaining process
undertaken by representatives of a group of workers on the one hand and of one or more
employers on the other.”

In the words of Flippo, “Collective bargaining is a process in which the representatives of a

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

The I.L.O. defines collective bargaining as “the negotiations about working conditions and
terms of employment between an employer, or a group of employers, or one or more
employers’ organisations, on the one hand, and one or more representative workers’
organisation on the other with a view to reaching agreement. “

“All negotiations which take place between an employer, a group of employers or one or
more employers’ organisations, on the one hand, and one or more workers’ organisations,
on the other, for:

(a) determining working conditions and terms of employment; and/or

(b) regulating relations between employers and workers; and/or
(c) regulating relations between employers or their organisations and a workers’
organisation or workers’ organisations.”

Collective Bargaining refers to the discussion and negotiation between an employer and the
employees on the terms of employment, including the working environment, conditions of
employment, shift length, work holidays, vacation time, sick leave, and health care benefits,
as well as compensation-based items like basic pay, overtime pay and retirement benefits.

How Does Collective Bargaining Work?

 Collective bargaining, as the name implies, is the negotiation and agreement reached
upon by the group of employees who want transformation in the employment terms
and facilities.
 The International Labor Organization (ILO) makes collective bargaining a
fundamental right for the employees.
 The ILO makes it feasible for employees to bring forth their concerns, including their
demands and grievances, to their employers.
 In the collective bargaining process, employees form a union and negotiations occur
between the employer’s management and the labor union leaders, who represent the
trade union workers.

Objectives

A collective bargaining contract includes all employment terms that a group of employees
discuss with the employer, who have worked on those found suitable demands.

The purposes that these agreements serve include the following:

  To foster a pleasant and cordial relationship between employer and employees.
 To equally safeguard the interests of both employer and employees.
 To ensure that the government intervention is maintained at a minimum level.
 To encourage the maintenance of a democratic environment at the workplace.

Types

Collective bargaining exists in various forms, thereby ensuring serving different functions. It
can be broadly classified into five major types –

1. Distributive Bargaining: In this type of negotiation process, one party benefits at the
expense of others. It discusses redistribution of profit sharing to increase wages,
bonuses, or financial benefits.
2. Integrative Bargaining: In this type of bargaining, the agreement is reached so that
both the participating sides tend to benefit – a win-win situation. In other words, both
parties consider each other’s needs and concerns.
3. Productivity Bargaining: In this type of bargaining, the negotiations revolve around
productivity and pay. The two parties agree to certain changes that promise to boost
productivity in exchange for higher wages.
4. Composite Bargaining: This type of negotiation emphasizes various factors not
directly related to pay but rather focused on employee welfare and job security. It
ensures the long-term relationship between employer and employee that is mutually
beneficial.
 5. Concessionary Bargaining: In this type of bargaining, the union sacrifices some
benefits to bail out the employer during the stressed economic situation, which
benefits the employees in the long run.

Steps

 The process involves a series of steps to be taken into consideration by the parties
involved so that they come to a conclusion they mutually agree on.
 From listening to the grievances and demands to implementing the legible ones, the
employers have a great role to play. However, putting forth the improvement
suggestions in the employment conditions, compensation, and other points in a proper
way is a must for employees.

The stages of collective bargaining are as follows.

1. Negotiation: In this process, two conflicting parties or their representatives discuss

among themselves, without the involvement of a third party, to settle themselves.
However, most involved parties hire seasoned lawyers themselves to settle such
matters.
2. Mediation: In this process, a neutral third-party act as the mediator between the
conflicting parties to settle. The mediator aids communication between the two parties
and ensures that it occurs fairly, honestly, and impartial. They help identify and
clarify the underlying issues of the dispute.
3. Arbitration: In this process, the third party, known as the arbitrator, decides on the
settlement. The arbitrator listens to the arguments of the conflicting parties and then
makes an informed decision, similar to what a Judge does in the court.

Examples

Let us consider the following instances to understand what is collective bargaining and how it
all works:

Example #1
In 1968, the National Football League Players Association (NFLPA) players went on a strike
to pressure the National Football League (NFL) team owners to increase the minimum
salaries and pension benefits offered to the players. Eventually, after 11 days of strike, a
collective bargaining agreement was reached between NFLPA and NFL team owners. The
salaries of both rookies and veterans were increased along with the pension benefits.

Example #2

In 2018, a 4-year collective bargaining agreement was reached between the United
Steelworkers (USW) and United States Steel Corp (USSC). As per the agreement, each
member will be given a signing bonus of $4,000, a 14% wage hike over the next four years,
and increased pension benefits. The agreement ensured that the employees’ share in the profit
distribution increased. It resulted from the pressure created by the union after years of
stagnant pay growth as USSC suffered due to low steel prices.

Goal of collective bargaining

 The main goal of collective bargaining is to get into a collective bargaining
agreement. This collective bargaining agreement is meant to set some rules and
provisions of employment for a set time period (usually, the time period is in years).
 Further, the cost of such a representation is incurred by the Union members in the
form of union dues.
 Also, it must be noted that if the parties have trouble reaching an inference, there
could be the involvement of antagonistic labour strikes or employee lockouts.

Process of collective bargaining

 As you must be aware, the International Labour Organisation (ILO) states the process
of collective bargaining to be a fundamental right available to all workers of any
organisation, meaning all the employees working in a company are entitled to submit
their grievances to their employers and to be able to negotiate for such grievances.
Further, as per the ILO, the process of collective bargaining helps reduce inequalities
in the workplace while providing workers with labour protection.
 Generally, collective bargaining occurs between members of a company and labour
union leaders. Usually, these union leaders are elected by workers to present their
grievances and to represent them and their interests. The process of collective
bargaining is involved when an employee’s contracts are to be renewed or when
employers make any modifications to the workplace or any terms of the contract.
 These modifications include, but are not limited to:

1. Employment conditions,
2. Conditions of work,
3. Rules related to workplace,
4. Matters related to base pay, wages, and overtime pay,
5. Holidays, sick days and vacations,
6. Benefits related to issues like that of retirement and health care.
The aforementioned issues fall into three categories, let us have a look at each of them in
brief
Types of collective bargaining agreement

Bipartite (or voluntary) agreements

 Such agreements are brought out after the employer and trade unions have voluntarily
carried out negotiations and reached a settlement.
 According to Section 18 of the Industrial Disputes Act, 1947, such an agreement is
binding on both the parties.
 Further, the implementation of such an agreement is usually not that hard considering
both parties have agreed to such a settlement voluntarily.

Memorandum of settlements

 Settlements are tripartite in nature as there is an involvement of employer, trade

union and conciliation officer in settling such an agreement.
 Such agreements stem from a particular dispute which is then addressed to an officer
for the purpose of recognition.
 During the reconciliation process the officer has an instinct that the parties have
indeed decided to reconcile and leave the dispute behind, and that an agreement is
possible, he may withdraw himself.
 Further, if and when the parties finalise such an agreement after the officer has
withdrawn, the acceptance of both the parties to the agreement is reported back to the
officer within a stipulated time period and the matter is thus settled.
 A point should be noted that such an agreement has quite a limited scope in
comparison to bipartite agreements as tripartite agreements are only restricted to
specific issues that are referred to the conciliation officer.

Consent awards

 Consents awards are those agreements that are reached at when there is an ongoing
dispute pending before a compulsory adjudicatory authority.
 Even though the agreement is reached voluntarily, the agreement becomes a part of
the binding award pronounced by the authority formed for the objective.

Importance:
The importance of collective bargaining can be ascertained from the point of view of –
management, trade union, and government.

 Management: The primary objective of the management is to make maximum

utilization of the workforce and earn higher profits. It can only be achieved if the
workforce co-operates, where collective bargaining comes into play.
 Trade Union: Each labor at the individual level has poor bargaining power against
the management. Hence, the working class united to form a powerful union and
protect their interests through collective bargaining.
 Government: Typically, collective bargaining keeps the Government at bay, and they
are not required to employ force to resolve disputes.

Advantages

The provision of collective bargaining gives employees a feeling of being valued as they are
able to put forth their grievances and their requirements to the employers directly.

In addition, when they see their demands or suggestions being accepted by their employers, it
appears to be a reward of their months and years of loyalty.

For employers, it is the way in which they can retain their set of employees who have been
the pillar of their success.

Besides these, there are other benefits of collective bargaining that one must be aware of. Let
us have a look at some of them in brief:

 Both parties get to understand what to expect from each other.

 Employees are safeguarded from exploitation by employers.
 The management has to deal with a small number of people (trade union leaders).

Disadvantages

Though the number of advantages of this process are many, there are flaws in it that must be
recognized. Listed below are some of the limitations of the process:

 Only a few people decide on the settlement.

  It is costly, both in terms of money and time, as representatives have to discuss the
same thing multiple times.

Distributive Bargaining

What Is Distributive Bargaining?

Distributive bargaining is an adversely competitive negotiation where two parties strive to

divide a fixed and limited resource in their favour. Distributive bargaining tactics are
essential, especially in situations where no alternatives seem to satisfy the situation’s demand.

The key to securing a deal through this strategy is to hold information secretively and gain
knowledge that the negotiator can use against the counterpart. Negotiators use unethical
tactics and may become manipulative and deceptive to secure the deal in their favor.

 What Is Distributive Bargaining?

 Distributive bargaining is a competitive strategy through which all parties attempt to

draw maximum benefit at the cost of their counterpart’s share of gains.
 It is most appropriate when resources are limited and a decision has to be made, like
labor union negotiation or salary negotiation.
 Negotiators usually go all out in distributive bargaining, hindering future relationships
or business with their counterparts.
 A negotiator attains the upper hand in the bargain by withholding information or
using information against their counterparts.
Distributive Bargaining Strategy Explained

 Distributive bargaining or zero-sum bargaining is a strategy used to divide a limited

or fixed resource in a high and almost unhealthy manner that puts them at risk of
securing no further business in the future with the other party.
 “Sharing the pie” is a common metaphor used to describe the distributive bargaining
process as a pie is a limited source of gain, and if one party gets more, naturally, the
other one has a lesser share left.
 A Distributive bargaining situation can arise in various cases ranging from settling
insurance claims to negotiating employee vacation schedules.
 Although the negotiation process is a strategy game and a gamble, it requires a certain
degree of expertise and flair to pull off.
 In addition, the nature of business, the strength of the negotiator’s position,
personality, and cultural projection play a vital role in negotiating this nature.

The very nature of distributive bargaining is that the parties involved have mutually exclusive
goals and conceal as much information possible about them while making constant efforts to
secure more information from the other party. Subsequently, by negotiation and compromise,
they arrive at a place where both parties are satisfied with the deal.

Example #1

 Trevor had just landed his first job and wanted to buy a used car to commute to work.
He set his budget at $3,000 for the same. Since he was on a tight budget, he wanted
to ensure he gained sufficient information about the cars on sale in his area and more
details about them.
 He found that Noah, a car dealer, had been trying to sell a car for the last 45 days but
had been unable to do so. Upon reaching Noah’s garage, Trevor found the price of the
car to be $3,100.
 Trevor used his information and convinced the seller that he would not find a better
deal than $2,800 and the car might incur more maintenance costs if he held it any
further. Finally, after a round of back and forth, they settled on $2,850.
 Trevor not only purchased the car for $150 lesser than his budget but also used the
information to his advantage and gained more than Noah through this deal.

Advantages And Disadvantages

Advantages

 Maximum Benefit: In a scenario where the resources available are limited or

everyone involved cannot enjoy the benefits, this nature of bargaining ensures the best
possible deal.
 Solves Issues: Distributive bargaining tactics occur only in situations where there is
no progress or the other party is unwilling to compromise so that everyone involved
can benefit in an integrated manner.
 Freedom: Since the two parties will likely not be doing business together in the
future, they can go all out and ensure maximum benefit is derived from the present
deal.

Disadvantages
  Non-Cooperation: It contradicts business ethics, cooperation, and understanding of
the parties involved. Instead, the focus is too much on the differences between the
parties involved and their goals. The aggressive negotiation often leads to no further
business or relationship between them.
 Win-Lose Mindset: The core principle that if one party wins, the others involved
have to lose is impractical as the pie can be extended for everyone by equal
distribution through an integrative bargaining strategy where the parties can continue
to work or collaborate in the future.
 Not Future Oriented: This intense form of bargaining might lead parties to make
decisions that might tamper with their relationship. Since the focus is on their
differences and not how the parties involved can mutually settle the deal or judgment,
future transactions or communication will cease between them.

Distributive Bargaining vs Integrative Bargaining

Let us understand the difference between distributive and integrative bargaining strategies
through the table below:

Integrative
Basis Distributive Bargaining
Bargaining

A free and open flow

Information is concealed or used strategically or of information and
Information
selectively. negotiation is carried
out.

A clear emphasis is
Common The emphasis is on differences in objectives,
on shared interests,
Grounds interests, and goals.
objectives, and goals.

Even though it is still

Minimal efforts are made to understand the a negotiation, an
Scope for perspective of the other party. Instead, the attempt to understand
Understanding information is used to gain an advantage over its the other person’s
counterpart. needs and wants is
made.

Negotiators meet mid-

The negotiators in a distributive bargain search for
way where their needs
solutions beneficial to their needs. They might try to
Solutions can be catered to and
block their counterpart from getting their needs
reach a win-win
fulfilled.
situation.

Collaborative
Strategy Type Competitive strategy.
Strategy.

Relevance It is relevant when the resources available are limited. It is best used when
 the resources are
available in
abundance.

The environment is
A hostile and controlled environment is evident in a constructive and open
Environment
distributive negotiation. in an integrative
bargain.

Stages of Negotiation
LEARNING OUTCOMES

Negotiation, in simplified terms, is a five-step process.

Preparation and Planning

In the preparation and planning stage, you (as a party in the negotiation) need to determine
and clarify your own goals in the negotiation. This is a time when you take a moment to
define and truly understand the terms and conditions of the exchange and the nature of the
conflict. What do you want to walk away with?

You should also take this moment to anticipate the same for the other party. What are their
goals in this negotiation? What will they ask for? Do they have any hidden agendas that may
come as a surprise to you? What might they settle for, and how does that differ from the
outcome you’re hoping for?

This is a time to develop a strategy for the negotiation. We’ll talk more about strategies in the
next section.

Definition of Ground Rules

After the planning and strategy development stage is complete, it’s time to work with the
other party to define the ground rules and procedures for the negotiation. This is the time
when you and the other party will come to agreement on questions like

 Who will do the negotiating—will we do it personally or invite a third party?

 Where will the negotiation take place?
 Will there be time constraints placed on this negotiation process?
 Will there be any limits to the negotiation?
 If an agreement can’t be reached, will there be any specific process to handle
that?

Usually, it’s during this phase that the parties exchange their initial positions.

Clarification and Justification

 Once initial positions have been exchanged, the clarification and justification stage
can begin. Both you and the other party will explain, clarify, bolster and justify your
original position or demands.
 For you, this is an opportunity to educate the other side on your position, and gain
further understanding about the other party and how they feel about their side.
 You might each take the opportunity to explain how you arrived at your current
position, and include any supporting documentation.
 Each party might take this opportunity to review the strategy they planned for the
negotiation to determine if it’s still an appropriate approach.
 This doesn’t need to be—and should not be—confrontational, though in some
negotiations that’s hard to avoid.
 But if tempers are high moving into this portion of the negotiation process, then those
emotions will start to come to a head here.
 It’s important for you to manage those emotions so serious bargaining can begin.
Bargaining and Problem Solving

This is the essence of the negotiation process, where the give and take begins.

You and the other party will use various negotiation strategies to achieve the goals
established during the preparation and planning process. You will use all the information you
gathered during the preparation and planning process to present your argument and
strengthen your position, or even change your position if the other party’s argument is sound
and makes sense.

The communication skills of active listening and feedback serve the parties of a negotiation
well. It’s also important to stick to the issues and allow for an objective discussion to occur.
Emotions should be kept under control. Eventually, both parties should come to an
agreement.

Closure and Implementation

Once an agreement has been met, this is the stage in which procedures need to be developed
to implement and monitor the terms of the agreement. They put all of the information into a
format that’s acceptable to both parties, and they formalize it.

Formalizing the agreement can mean everything from a handshake to a written contract.

Negotiation Strategies and Plans

What are the best negotiation strategies?

Negotiation is the act of working with one or more stakeholders to find an equitable
solution to a situation. The goal of negotiation is to get the best possible advantage while
agreeing to concessions that encourage the other party to agree to the terms that have been
laid out. There’s an art to successful negotiations, and getting them done requires
engaging in good decision-making skills, the ability to listen more than you speak, and
using your perception skills to recognize when an offer is good or bad.

In this article, we’ll explore what makes up the best negotiation strategies you can
employ during the creation of an agreement of any type. Using these strategies can help
you in all facets of your life as well as help you be an effective business leader.

What is negotiation?

Negotiation is a soft skill that is used to achieve a desired outcome between two or
more parties. You have a vested interest in getting an outcome that’s favorable for you
or your business, and you need to employ negotiation tactics to convince the other
party that they should enter into an agreement with you. In the meantime, you need to
show the other party that you can be trusted, are interested in listening to their
concerns, and crafting a contract or agreement that works in favor of both parties.
Being able to negotiate terms works for everything from getting a better salary to
buying real estate and making business decisions. CEOs need to hone their negotiating
skills to get the best possible arrangements and terms for a specific goal. That can
include getting a lower price on recurring supply orders, encouraging another CEO to
partner with your company and create a new product, or negotiating a new office space
lease. Negotiation skills are also one of the traits of successful leaders because it shows
they can make good decisions on behalf of an organization.

What makes a good negotiation?

It is important to realize that good negotiating skill-building requires compromise. Both

you and the other party will have a desired outcome in mind and the ultimate result will
likely fall somewhere in between those two objectives. Strive to create a conversation
that respectful and courteous to find a resolution that can become a win-win for both.

Why are negotiation tactics important?

Knowing how to leverage negotiation tactics can help in nearly all facets of life.
Through negotiation, you’re able to handle conflicts by creating an agreement all
parties mutually agree on. As an executive, negotiation tactics are essential and can
help your organization in more ways than one. In fact, 90% of business leaders find
communication skills, such as negotiation, play a primary role in the future of their
businesses. Here are some of the reasons why negotiation tactics are important:

 Growth opportunities: Growth opportunities sometimes involve buying

another business, equipment, or supplies. Being able to negotiate a good price
helps the business expand while spending less of its capital.
 Crisis management: Negotiations during a time of crisis help a business
maintain its normal operating standards while working with other players to
find a workable resolution. It also helps those involved keep their cool and act
rationally.
 Maximizing value: A good negotiation strategy enables both parties to
maximize their value through the acquisition or integration of new sources of
revenue that they didn’t own previously.
 Achieving favorable outcomes: The overall goal of a negotiation strategy is to
get as close to what you want as possible. This is true even when both parties
can’t agree and walk away from the table.
 Enhanced operations: Engaging in negotiation helps a business smooth out
rough areas in its operation. All parties involved can use negotiations to find
resolutions to their problems through the inclusion of new processes or
eliminate ones that aren’t beneficial.

How do you prepare for a negotiation?

Preparing for a negotiation requires engaging in due diligence. That means you need to
research the other party to understand them as a whole, identify their priorities, and get
an idea of areas where they may concede. Here are the most important elements of
preparing your negotiation strategy.
 1. Conduct research and gather information: Researching the other party’s
background helps you understand how it operates, its internal culture, and what
affects them the most. This informs you of their strengths and weaknesses,
enabling you to take advantage of both aspects during your negotiations. You
can better anticipate how they’re going to respond to your proposals.
2. Understand the other party’s priorities: The other party in the negotiation
also has an interest in coming to an equitable agreement, or else they wouldn’t
have engaged in negotiations in the first place. However, their priorities may be
different from yours, which is why negotiations are important.
3. Define goals and desired outcomes: Defining or setting goals is an important
part of your negotiation preparation. Be sure and confident that your stated
goals are achievable and well-defined, and be concise. Going into a negotiation
without being absolutely sure of what you want can result in you getting less
than you’re seeking.
4. Identify potential concessions: You need to identify potential concessions
you’re willing to give, as they can help close the deal sooner rather than later.
Make sure that the concessions you offer are ones that won’t weaken your
position or give the appearance that you’re trying to play hardball. This is one
of the negotiation tips that can lead to poor results if you’re not careful.

What are effective negotiation strategies?

You can engage in a number of different negotiation strategies that are appropriate for
the situation at hand. What sits at the core of all strategies for negotiation is how you
handle yourself and your overall view of the situation. The following negotiation tips
help you use your emotional intelligence when approaching another party to enter into
negotiations.

1. Build rapport and trust

Good negotiating outcomes are a result of good relationships and relationships must be
developed over time. Because of that, good negotiators are constantly looking for
opportunities to enhance the relationship and strengthen their position. In some cases,
the result of the negotiation is determined even before the individuals meet for
discussion.

Be as polite and pleasant as you can be when reaching out to another party for
negotiations. Both of you are looking to get as much as you can from the process, but
you don’t want the other party to feel as if they’re being taken advantage of. You can
achieve your goals more easily by being polite, engaging in active listening, and
staying flexible.

2. Remain positive

It can be easy to fall into the thinking that you’re not going to get what you want and
that the negotiations are a waste of time. Avoid this type of thinking and stay positive
while the other party considers your offers. If they say no, you can make a different
offer or walk away from the table altogether.

Many negotiators underestimate themselves because they don’t perceive the power
they have inside of themselves accurately. In most negotiating situations, you have
more power than you think. You must believe that the other party needs what you
bring to the table as much as you want the negotiation to be a success. Also, be sure
that that positivity is visible during the negotiation. Be aware of the tone of your voice
and non-verbal body language while interacting with the other party.

3. Leverage your BATNA

BATNA, or the best alternative to a negotiated agreement, is your backup plan when
neither party can come to an agreement. Create your BATNA during your planning
phase and have it handy if the other party declines your offer. In some cases, the
proposed agreement may be better than your BATNA, requiring you to reconsider your
position. However, if the proposed agreement falls short of your BATNA, it may be
best to walk away. With a BATNA in place, you can make more informed decisions
about whether a deal is worth accepting.

4. Understand all outcomes

As you work on your strategies for negotiation, you need to step back and look at all
potential outcomes and what their impact would be. Engaging in this exercise helps
you counter or accept the offers made by the other party because you’ve already
evaluated their implications and effect on your business.

Don’t be upset if things don’t go your way. In these instances, it’s a good time to
reevaluate all positions and return to the table. In most cases, as long as you know the
highest and lowest expectations of each party a middle ground can usually be reached
in the overlapping areas.

5. Be articulate & build value

This is a key negotiation tactic that separates the good negotiators from the masters.
When you have a strong belief in what you’re negotiating for, you will shine. Become
a master at presenting your thoughts and ideas so that others see the value.

A tip on how to do that well:

 Be direct when presenting a situation. Be clear about what is expected.

Discuss ways to apply how it can happen.
 Don’t simply talk about what needs to happen. Discuss the consequences –
how your solution will be beneficial to the other party.

6. Plan concessions strategically

The phrase “don’t put all of your cards on the table” applies to the concessions you’re
willing to offer to the other party. In other words, only offer a concession when it’s
advantageous to you, and don’t let the other side know about the other items or areas
that you’re willing to concede on.

When a person gives something up or concedes on part of a negotiation, always make

sure to get something in return as a bargaining strategy. Otherwise, you’re
conditioning the other party to ask for more while reducing your position and
value. Maintaining a balance will establish that both parties are equal.

What are common negotiation styles?

 There are different types of negotiation styles you can employ when it comes time to
come to an agreement with another party. Below are some of the common types of
negotiation styles:

 Competitive: Competitive negotiation consists of getting the most for yourself

at the expense of the other party. It’s also known as being aggressive, defensive,
or assertive because you have a need to win.
 Collaborative: The collaborative style of negotiation involves creating a
pleasant working atmosphere with the other party and keeping each other’s
goals in mind. There’s a desire to strike a balance between the two of you and
meet each other’s needs in an equitable fashion.
 Accommodative: Accommodative negotiation intentionally puts you at a
disadvantage with the other party from the start of the process. You’re not
seeking to win so much as you’re looking to make an apology or give a
sweetheart deal for a more balanced one in the future.
 Avoidant: The purpose of an avoidant negotiation strategy is to avoid conflict
by ignoring the issue at hand. It’s also known as a passive-aggressive style and
sometimes happens when the other negotiator is competitive or aggressive.

Essentials of Successful Collective Bargaining

# 1. Favourable Political Climate:
If collective bargaining has to be fully effective a favourable political climate must exist. The
government and the public opinion must be convinced that collective bargaining is the best
method of regulating employment conditions. The government should remove all legislative
restrictions which hamper collective bargaining.

It can also confer a right to bargain collectively, lay down the form and content of collective
agreement, register these agreements and assist in their enforcement. However, the role of
government has to be minimum because collective bargaining is a two way process more
concerned with micro aspects.

Essential # 2. Strong and Stable Unions:

Collective bargaining is not possible if employees are not free to form trade unions as they
please. A strong and representative trade union is required to bargain with the employer on
equal basis. The employers can easily ignore a weak union on the plea that it hardly
represents the workers.

Trade unions must be stable and strong enough to honour the collective bargaining
agreement. It should have sufficient number of members to justify entering into collective
bargaining agreements.

Essential # 3. Recognition:
A trade union may be stable and strong, but until it is given recognition by the management,
it will hardly have any impact. Collective bargaining cannot exist or begin until union is
recognised and regarded as an integral part of industrial relations. It is in the interest of an
employer to recognise a strong union to avoid strikes and to safeguard against undercutting
labour standards.
Essential # 4. Willingness to Give and Take:
Both employers and union leaders should negotiate in a spirit of compromise and reciprocity.
If either of the party adopts an adamant attitude, bargaining will not be possible. Willingness
to give and take does not mean that concessions made by one side must be marked by equal
concession by the other side. Exaggerated demands must be toned down to reach an
agreement.

Essential # 5. Negotiator’s Authority:

The procedures must be developed to ensure that negotiators have full authority to bind their
constituents. If bargaining representatives have to refer constantly back to their respective
organisations, it makes bargaining process ridiculous and ineffective, because parties know
by experience that bargaining team is only a show piece and not the real authority.

Essential # 6. Fair Practices:

Both the employers and trade unions should avoid unfair labour practices. Collective
bargaining is possible only in an atmosphere of mutual trust and recognition.

Management must recognise and accept the workers’ right to organise and fight for justice.
Similarly, workers and their union must recognise and accept the employers’ right to manage.
In the absence of such recognition, collective bargaining is a mere trial of strength.

Essential # 7. Positive Attitude:

The negotiating teams should have a problem solving and positive attitude rather than a
fighting approach. There has to be greater emphasis on mutual accommodation rather than on
conflict or uncompromising attitude. Conflicting attitudes do not lead to amicable labour
relations rather it may foster union militancy as the union reacts by engaging in pressure
tactics.

Essential # 8. Continuous Dialogue:

A dead end must be avoided in negotiations and the talks should continue. As long as talks
continue, agreement can be possible. At times, it may be necessary to leave highly
controversial issues for the time being and narrow down the field of disagreement on other
matters.

Essential # 9. Availability of Data:

The employer must ensure that all the required records are available. Facts and figures
relating to employees and their working conditions provide a rational basis for negotiations.
But unless, the trade union believes in the data and accepts the same, collective bargaining
process may be hampered.

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