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HRM 610: Industrial Relations

Atikur Rahman,
MBA (HRM), BBA (Mgts), RU
Senior Lecturer of Business Administration
Faculty of Business Studies, PCIU
Email: atikur.rahman@portcity.edu.bd

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 Definition of Collective Bargaining
‘Collective Bargaining is a process in which the representatives of a labor
organization and representatives of the business organization meet and attempt
to negotiate a contract or an agreement which specifies the nature of the
employee-employer-union relationship’ …..…Edwin B Flippo.

Section 2(52) of the BLA 2006 defines CBA as a ‘Collective Bargaining Agent’
in relation to an establishment or group of establishments, means the trade
union or federation of trade unions which, under Chapter 13 of BLA 2006, is the
agent of worker in the establishment or, as the case may be, in the group of
establishments in matter 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
bargaining process undertaken by representatives of a group of workers on the
one hand and of one or more employers on the other.”
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 History of Collective Bargaining
The term Collective Bargaining (CB) was first introduced in 1891 by ‘Beatrice
Webb’ a founder of the field of industrial relations in Britain. It was introduced
as a basic human right. In the United States, the National Labor Relations Act of
1935 made it illegal for any employer to deny union rights of an employee. The
issue of unionizing was more controversial until the 1950s. In 1952 President
John F. Kennedy issued an executive order granting federal employees the right
to unionize. In the subcontinent collective bargaining was introduced in the
20th century. Collective Bargaining (CB) was first introduced in Bangladesh
under the framework of Industrial Relations Ordinance, 1969.

The legal framework on collective bargaining is governed by the provisions of

the Labor Act 2006. According to section 209 and 210 of the act collective
bargaining is the first step in the industrial dispute settlement mechanism.
Bangladesh has ratified ILO Conventions 87 and 98 on freedom of association
and collective bargaining and thus is required to protect the rights contained
therein. 1–4
 Objectives of Collective Bargaining
 Settle disputes/conflicts relating to wages and working conditions;
 Protect the interest of workers through collective actions;
 Resolve differences over knotty issues.
 Carry out negotiations voluntarily, without interference from a third party.
 Arrive at an amicable agreement through a process of give and take.
 To have peaceful co-existence for the mutual benefits and progress.
 To maintain employee-employer relation bilaterally.

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 Features of Collective Bargaining
Collective bargaining is a two way group process where the employers representative
and employees representatives sit together to negotiate terms of employment.
Strength: Both the parties in collective bargaining are strong and equal.
Voluntary: Both parties come to the negotiation table voluntarily in order to go in
particular negotiation. It is based on discussion, mutual trust and understanding.
Improvement: It is a method to improve the employer-employees relation in
organization and resolve management and employees conflicts.
Representation: Collective bargaining is between the representatives of employees
and management. The management does not directly deal with employees. It carries
negotiations with the representatives/executives of unions and association.
Flexible: It is a flexible and continuous process and not fixed or static.
Dynamic: Collective bargaining is dynamic, that go on changing over a period and
grows and expand the way of agreement, the way of implementation and way of
discussion.
Bipartite Process: Because the employee and employers representatives negotiate
directly face to face across the table. 1–6
 Importance of Collective Bargaining
Importance to employees:

Collective bargaining develops a sense of self respect and responsibility among the
employees.
It increases the strength of the workforce, thereby, increasing their bargaining
capacity as a group.
Collective bargaining increases the morale and productivity of employees.
It restricts management’s freedom for arbitrary action against the employees.
Moreover, unilateral actions by the employer are also discouraged.
Effective collective bargaining machinery strengthens the trade unions movement.
The workers feel motivated as they can approach the management on various
matters and bargain for higher benefits. It helps in securing a prompt and fair
settlement of grievances.
It provides a flexible means for the adjustment of wages and employment conditions
to economic and technological changes in the industry, as a result of which the
chances for conflicts are reduced. 1–7
 Importance of Collective Bargaining
Importance to employers:

It becomes easier for the management to resolve issues at the bargaining
level rather than taking up complaints of individual workers.
Collective bargaining tends to promote a sense of job security among
employees and thereby tends to reduce the cost of labor turnover to
management.
Collective bargaining opens up the channel of communication between the
workers and the management and increases worker participation in decision
making.
Collective bargaining plays a vital role in settling and preventing industrial
disputes.

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 Importance of Collective Bargaining
Importance to society:

Collective bargaining leads to industrial peace in the country

It results in establishment of a harmonious industrial climate which supports
which helps the pace of a nation’s efforts towards economic and social
development since the obstacles to such a development can be reduced
considerably.
The discrimination and exploitation of workers is constantly being checked.
It provides a method or the regulation of the conditions of employment of
those who are directly concerned about them.

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 Importance of Collective Bargaining
Importance to society:

Collective bargaining leads to industrial peace in the country

It results in establishment of a harmonious industrial climate which supports
which helps the pace of a nation’s efforts towards economic and social
development since the obstacles to such a development can be reduced
considerably.
The discrimination and exploitation of workers is constantly being checked.
It provides a method or the regulation of the conditions of employment of
those who are directly concerned about them.

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 Collective Bargaining Process
Collective Bargaining involves the following steps:

1. Preparation: This phase involves composition of a negotiation team.

2. Discussion: Both parties decide the rules that will guide the negotiations.
3. Proposal: It involves the initial opening statements and the possible options
that exist to resolve them.
4. Bargaining: Negotiations are easy if a problem solving attitude is adopted.
This stage comprises the time when ‘what ifs’ and ‘supposals’ are set forth
and the drafting of agreements take place.
5. Settlement: This stage is described as consisting Of effective joint
implementation of the agreement through shared visions, strategic
planning and negotiated change.

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 Determination of Collective Bargaining Agent
Section 202 of BLA 2006 stipulates the 2 ways to determine or election of a CBA
which are as follows:
Determination by operation of law: according to section 202(1) of BLA 2006,
where there is only one registered TU in an establishment that TU shall be
deemed to be the CBA for such establishment.
Determination through Election ( secret ballot): Section 202 (2) of the labor
act lays down that where there are more TU than one in an establishment, the
following procedure has to be followed:
a. the existing TUs upon selecting election commissioner from and among
them, shall arrange election for CBA. or
b.Any such TU/ employer can make application to DGL
c. The DGL shall hold a secret ballot to determine as to which one of such TUs
shall be CBA for the establishment or group of establishments.

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 Determination of Collective Bargaining Agent
Receipt of Application & Contestant in the Secret Ballot: Section 202(3) of
the BLA 2006 lays down that upon receipt of an application under Section
202(2), the DGL shall, by notice in writing, call upon every registered TU in the
establishment to which the application relates to indicate, within the time
specified in the notice, which shall not be more than 15 days, whether it
desires to be contestant in the secret ballot to be held.

If no TU informs the DGL anything within the time specified, the TU applying
under Section 202(2), shall be declared to be the CBA for the establishment,
provided it has its members not less than one-third of the total number of
workers employed in the establishment.

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 Determination of Collective Bargaining Agent
Listing: According to Section 202(6) of the BLA 2006, every employer shall, on
being so required by the DGL, send to the DGL a list of all workers employed in
the establishment, excluding those whose period of employment is less than 3
months or who are casual or badli workers.

Objection against the Listing: According to Section 202(9) of the BLA 2006, the
objection if any, received by the DGL within the specified time shall be
disposed of by him after such enquiry as he deems necessary.

The DGL shall make such amendments or alterations in the list of workers
submitted by the employer as may be required by any decision given by him
under sub-section (9).

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 Determination of Collective Bargaining Agent
After amendment of alterations, if any, the DGL shall prepare a list of workers
& send copies thereof, after, certifying, properly, to the employer & each of
the contesting TUs at least 7 days prior to the date fixed for the poll

Voter List: Section 202(12) of the BLA 2006 enunciates that the list of the
workers prepared & certified under sub –section (11) shall be deemed to be the
list of voters, and every worker who appears in the list shall be entitled to vote
in the poll to determine the CBA.

Provide all necessary facilities for the conduct of the poll. Section 202(13) of
the BLA 2006 lays down that every employer shall, on being so required by the
DGL, provide all necessary facilities for the conduct of the poll but shall not
interfere with or in anyway, influence the voting.
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 Determination of Collective Bargaining Agent
Election Management: According to Section 202(15) of the BLA 2006, the DGL
shall take all necessary measures to conduct the election for the determination
of CBA such as fixation of date for the poll, use of ballot boxes, counting the
ballots, & declaration of CBA.

No TU shall be declared to be the CBA for an establishment unless the number

of votes received by it is not less than one-third of the total number of workers
employed in such establishment.

Duration of Elected CBA: According to Section 202(16) of the BLA 2006, where
a TU is declared as CBA under sub-section (15)(e), it shall be the CBA for the
establishment for 2 years from the date of such declaration. In case of group of
establishments the period of CBA shall be 3 years.

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 Determination of Collective Bargaining Agent
Powers or Jurisdictions of CBA: According to Section 202(24) of the BLA 2006, the CBA
of an establishment shall be entitled to:
a) Undertake collective bargaining with the employer on matters connected with
non-employment, the terms of employment or the conditions of work
b) Represent all or any of the workers in the proceeding
c) Give notice of, and declare, a strike in accordance with the provisions of the
Chapter 13, BLA 2006
d) Nominate representatives of workers on any welfare establishment or provident
fund and on the Board of Trustees of Participation Fund established under Chapter
15 of BLA 2006
e) Conduct cases on behalf of any individual or group workers ( subject to his/their
consent)
f) Every owner shall allot office room for elected CBA at his own establishment.

The owner or CBA may, if thinks necessary, take assistance from expert person in case
of collective bargaining process. (Section 202 A). 1–17
 Do’s & Don’ts of Collective Bargaining Agent
Do’s:

Investigate each case

Talk with the employee
Must identify specific provisions
Comply with the time limits
Visit the work area
Were there any witnesses?
Examine personnel records
Prior grievance records
Private grievance discussions
Fully inform own supervisor Do’s
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 Do’s & Don’ts of Collective Bargaining Agent
Don’ts:

Discuss the case publicly

Meet with individual employee alone
Hold back the remedy
Admit to past practices Don’ts
Settle grievances based on what is “fair” for you
Bargain over items not covered
Give long written answers
Deny grievances because “your hands have been tied by management”

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 Bargainable Issues in Collective Bargaining
1. Wages and working conditions
2. Work norms
3. Incentive payments
4. Job security
5. Work tools, techniques and practices
6. Staff transfers and promotions
7. Grievances
8. Disciplinary matters
9. Health and safety
10. Insurance and benefits
11. Union recognition
12. Management rights
13. Union activities/responsibilities
14. Changes in technology 1–20
 Types of Collective Bargaining
1. Distributive or Conjunctive bargaining involves zero-sum negotiations, in
other words, one side wins and the other loses. e.g. wages, benefits,
bonus, etc.

2. In Cooperative or Integrative bargaining both the parties may gain or at

least neither party loses. e.g. better training programs.

3. In Productivity bargaining worker’s wages and benefits are negotiated

against their productivity. That means, the more they productive, the
better wages and benefit they will get.

4. In Composite bargaining, worker’s bargain usually for wages comparing

with their work level, employment level and environmental hazards etc.
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 Activities of Collective Bargaining
Major activities in collective bargaining are:-

(1) To undertake collective bargaining with the employer or employee on

matters connected with employment, non-employment, terms of employment
or the conditions of work.
(2) To represent all or any of the workmen in any proceedings
(3) To declare the strike or may issue the notice of strike under the provision of
law.
(4) To nominate the representative of workmen on the workers participation
fund, or on the Board of Trustee or provident fund.

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 Levels of Collective Bargaining

1. Plant level: It is the basic or micro level unit. Bargaining conducted

between the management and CBA of the same plant.

2. Industry level: Several units in same industry form an association/unions

and bargain for common cause.

3. National level: Here the bargaining is between federation(s) of unions and

an employer’s association.

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 Pre-requisites for success in Collective Bargaining
 There must be a change in the attitude of employers and employees.
 The employers and employees should enter upon negotiations on points of
difference or on demands with a view to reaching an agreement.
 Unfair labor practices should be avoided and abandoned by both sides.
 The terms of the contract should be put down in writing and embodied in a
document.
 Collective bargaining should be based on facts and figures.
 Once an agreement is reached, it must be honored and fairly implemented.
 A provision for arbitration should be incorporated in the agreements

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 Tactics to be followed in Collective Bargaining
1. Counter proposal
2. Trade-off
3. Recess
4. Wait and see
5. Getting public support
6. Use of mediator

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 Reasons for Failure in Collective Bargaining
 Unfair or corrupt labor practices.
 Non availability of factual data.
 Failure on the part of management to recognize the trade union.
 Politicization of issues.
 Multiplicity of trade unions.
 Unequal strength of parties participating in the collective bargaining process.
 Lack of objectivity in addressing and handling a grievance.

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 Collective Bargaining System in Bangladesh
Collective Bargaining system in Bangladesh is very much weak. Several factors
are responsible for it. So far, collective bargaining system has not made in
remarkable progress in Bangladesh for the following reasons:-

Unions are not organized enough to bargain collectively

Many trade union leaders are not educated enough to comprehend problems
of workers and employers in a broad prospective.
A good number of trade union leaders are either self-interested or politically
motivated persons.
Ethical positions of most of the unions are not strong enough.
Due to lack of education and intransigent attitude of some employers,
workers have more faith in acts of violence than the process of collective
bargaining to realize their demand.
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 Collective Bargaining System in Bangladesh
 Very often lack of good faith in each other hinders the progress and success
of collective bargaining.
 Management often failure to have direct communication with workers.
 Inefficient conciliation role of government resulting in poor collective
bargaining.

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 Assignment
Suresh, a workman in the Fire and Safety Department of a manufacturing unit of a factory is addicted to
alcohol. He has been warned many times for coming on duty in an inebriated state. He has been served
charge-sheet and awarded punishment. Still there was no improvement in his chronic absenteeism. He is
also deeply in debt and hardly takes a couple of hundred taka as his take home salary. Instead of resorting
to progressive punishment, the management, with the help of a social worker, counselled him and also
made house visits and contacted his family members.

Finally, he was sent to a hospital which specialized in deaddiction. His three months of treatment in the
hospital was considered as special leave with wages which were paid to the family members. The
company bore the entire hospital expenses. After discharge from hospital, Suresh resumed his work. There
are no more complaints about him. His performance is satisfactory. During her regular visits, the social
worker received satisfactory reports about Suresh from his family members. In fact they were grateful to
the company for saving their family from certain destitution.

Questions:
1. In these fast-paced times, is it possible for any management to stretch that far to reform a person?
2. Is it obligatory on the part of the management to take care of a workman beyond his working hours?
What did the management achieve by his action?
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