Employee Relations and
Labour Laws
Unit 2
Collective Bargaining
By
Prof. Sapna Yadav
KIET School of Management
Contents
• Collective Bargaining
• Features
• Objectives of Collective Bargaining
• Prerequisites of Collective Bargaining
• Collective Bargaining Process
• Issues of Collective Bargaining
• Types of Collective Bargaining
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.”
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.”
Features
• It is a Group Action
• It is a Continuous Process
• It is a Bipartite Process
• It is a Process
• It is Flexible and Mobile and not Rigid
• It is an Art
• It is Industrial Democracy at Work
• It is Dynamic
• It is a Complementary and not a Competitive
Process
Prerequisites of Collective Bargaining
• Both parties (employer and employees) should realise the need of collective
bargaining.
• Both parties should try to solve the problems through negotiations sincerely
and honestly.
• A single plant bargaining is considered better than a multiple plant
bargaining. In single plant bargaining, there is a bargain between a single
employer and single union.
• Both parties should present facts and figures on the discussion table. Their
approach should be constructive in order to resolve the problems.
• The management should pay reasonable wages and any
unfair labour practice should be avoided.
• If any agreement is reached, it must be a written document.
• Both parties should ensure that agreement reached is
respected and implemented and industrial peace is
Objectives of Collective Bargaining
• To foster and maintain cordial and harmonious relations between the
employer/management and the employees.
• To protect the interests of both the employer and the employees.
• To keep the outside, i.e., the government interventions at bay.
• To promote industrial democracy.
• Collective bargaining to be successful must cover all areas including
formulation of policies affecting workers.
• It is a two party process or method.
• Both parties have flexible attitude so that there should be mutual give and
take.
• It facilitates the speedy implementation of decisions arrived
at collective negotiation.
• Maintain Equality
Collective Bargaining Process
Preparation – Choosing a negotiation team and representatives of both the union and
employer. Both parties should be skilled in negotiation and labor laws, and both examine
available information to determine whether they have a strong standing for negotiation.
Discussion – Both parties meet to set ground rules for the collective bargaining negotiation
process.
Proposal – Both representatives make opening statements, outlining options and possible
solutions to the issue at hand.
Bargaining – Following proposals, the parties discuss potential compromises, bargaining to
create an agreement that is acceptable to both parties. This becomes a “draft” agreement,
which is not legally binding, but a stepping stone to coming to a final collective bargaining
agreement.
Final Agreement – Once an agreement is made between the parties, it must
be put in writing, signed by the parties, and put into effect.
Issues of Collective Bargaining
• Wages and working condition
• Work norms
• Incentive payments
• Job security
• Changes in technology
• Work tools, techniques and practices
• Staff transfers and promotions
• Grievances
• Disciplinary matters
• Health and safety
• Insurance and benefits
• Union recognition
• Union activities/ responsibilities
Types of Collective Bargaining
Conjunctive/Distributive Bargaining:
In this type of bargaining, the employers and employees try to maximize
their respective gains. Issues like wages, bonus etc. are negotiated under
conjunctive bargaining.
It’s identifying feature is that it operates under zero sum conditions i.e. “my
gain is your loss and your gain is my loss”. The parties want to work as little as
possible while getting as much as possible from the other party. Conjunctive
bargaining is also called distributive bargaining.
Types of Collective Bargaining
Co-operative/Integrative Bargaining:
In co-operative bargaining, both parties realise the importance of surviving in
difficult times and decides to negotiate the terms of employment with mutual
understanding.
Labour can sacrifice something and may accept wage cuts and management
may also agree to sacrifice something for the survival of the firm. Co-operative
bargaining is resorted mainly in the times of recession.
Types of Collective Bargaining
Productivity Bargaining:
It is done by the management, workers are often given the incentives and
bonus for the increased productivity. The workers get encouraged and work
very hard to the standard level of productivity to gain these benefits.
This type of bargaining beneficial for both employer and employee as both
enjoy the benefits in the form of increased production and the increased pay
respectively.
In this method, worker’s wages and benefits are linked to productivity. If they
are able to exceed the standard productivity norms, workers will get substantial
benefits. Standard productivity is finalised through negotiations.
Productivity bargaining agreements are important for raising
productivity and for survival and growth of the organisation.
Types of Collective Bargaining
Composite Bargaining: In composite bargaining method, labour bargains for
wages as usual but goes a step further demanding equity in matters relating to
work norms, employment levels, etc. In this type of collective bargaining,
along with the demand for increased wages, the workers also express their
concern over the working conditions, recruitment and training policies,
environmental issues, mergers and amalgamations with other firms, pricing
policies, etc. with the intention to safeguard their interest and protect the
dilution of their powers.
Thus, the purpose of the Collective Bargaining is to reach a
mutual agreement between the employee and the employer
with respect to the employment terms and enjoy a long term
relationship with each other.
Thank
You
