collective bargaining

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Collective Bargaining


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"BARGAINING" - haggling - one-time relationships such as a one-time purchaser or a claimant to damages COLLECTIVE BARGAINING


MEANING It is a technique that has been adopted by union and management to reconcile their conflicting interests. It is called collective because the employees, as a group, select representatives to meet and discuss differences with the employer The negotiations for collective bargaining require joint sessions of the representatives of labour and management .


DEFINITION HARRINON - “is a process of accommodation between two institutions which have both common and conflicting interests.” RICHARDSON - “Collective bargaining takes place when a number of work people enter into a negotiation as a bargaining unit with an employer or group of employers with the object of reaching an agreement on the conditions of the employment of the work people.”

ILO - Right to Organize & Collective Bargaining Convention (No. 98), 1949:

ILO - Right to Organize & Collective Bargaining Convention (No. 98), 1949 "Voluntary negotiation between employers or employers' organizations and workers' organizations, with a view to the regulation of terms and conditions of employment by collective agreements."


CHARACTERISTICS 2 - way process Agreement & Mutually settling it Continuous process Group Action Flexible Fluidity & ample scope for a compromise for a mutual give & take before the final agreement is reached Dynamic & Static


Cont…. Not a Competitive process but a Complementary process An art - an advanced form of human relations. It is a device and a procedure used by wage earners to safeguard their interests. Industrial democracy at work- joint formulation of company policy on all matters which directly affects the workers


SEVERAL ESSENTIAL FEATURES CB to collective agreements bcoz collective bargaining the process or means, and collective agreements to the possible result, of bargaining. Collective bargaining may not always lead to a collective agreement. It is a method used by TU to improve the terms and conditions of employment of their members. It seeks to restore the unequal bargaining position btwn employer & employee.

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Where it leads to an agreement, it modifies, rather than replaces, the individual contract of employment, because it does not create the employer-employee relationship. The process is bipartite, but in some developing countries the State plays a role in the form of a conciliator where disagreements occur, or where collective bargaining impinges on government policy.


OBJECTIVES & SIGNIFICANCE Technique adopted by unions & management for compromising their conflicting interests. Plays a significant role in improving the labour- management relations and in ensuring industrial harmony. Helps in easing out many minor differences and there are many instances in which even some major disputes are set to be settled without any work stoppage or outside intervention. Provides a climate for smooth progress Ensures that managements do not take any unilateral decision


ADVANTAGES CB - the advantage of settlement through dialogue & consensus rather than through conflict & confrontation. Arrangements resulting from collective bargaining usually represent the choice or compromise of the parties themselves. It differs from arbitration (the solution is based on a decision of a third party). Arbitration may displease one party because it usually involves a win/lose situation, and sometimes it may even displease both parties.

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CB agreements often institutionalize settlement through dialogue. For instance, a collective agreement may provide for methods by which disputes btn the parties will be settled. In that event the parties know beforehand that if they are in disagreement there is an agreed method by which such disagreement may be resolved.

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CB is a form of participation . Both parties participate in deciding what proportion of the 'cake' is to be shared by the parties entitled to a share. It is a form of participation also bcoz it involves a sharing of rule-making power btn employers & unions in areas which in earlier times were regarded as management prerogatives, e.g. transfer, promotion, redundancy, discipline, modernisation, production norms. However, in some countries such as Singapore and Malaysia, transfers, promotions, retrenchments, lay-offs & work assignments are excluded by law from the scope of collective bargaining.

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CB agreements sometimes renounce / limit the settlement of disputes through TU action. Such agreements have the effect of guaranteeing industrial peace for the duration of the agreements, either generally or more usually on matters covered by the agreement.

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CB is an essential feature in the concept of social partnership towards which labour relations should strive. Social partnership may be described as a partnership between organised employer institutions & organised labour institutions designed to maintain non-confrontational processes in the settlement of disputes which may arise between employers and employees

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CB has valuable by-products relevant to the relationship between the two parties. For instance, a long course of successful and bona fide dealings leads to the generation of trust . It contributes towards mutual understanding by establishing a continuing relationship. The process, once the relationship of trust and understanding has been established, creates an attitude of attacking problems together rather than each other

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In societies where there is a multiplicity of unions and shifting union loyalties, CB and consequent agreements tend to stabilise union membership. For instance, where there is a collective agreement employees are less likely to change union affiliations frequently. This is of value also to employers who are faced with constant changes in union membership and consequent inter-union rivalries resulting in more disputes in the workplace than otherwise.

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Most important of all - CB usually has the effect of improving IR . This improvement can be at different levels. The continuing dialogue tends to improve relations at the workplace level btn workers and the union on the one hand and the employer on the other. It also establishes a productive relationship between the union and the employers' organization where the latter is involved in the negotiation process.


PROCESS Pre-negotiation Phase The selection of Negotiators The Strategy of Bargaining The Tactics of Bargaining, & The Contract


2 STAGES The negotiation stage & The stage of contract administration


PROCESS OF NEGOTIATION BARGAINING Preparation for Negotiation - Negotiation may commence at the instance of either party-of labour or of management. A- Some managements bids the time till trade unions put proposals for trade unions B- Positive Bargaining: Managements submit their own proposals for consideration by labour representatives


IMPORTANCE OF PRE-NEGOTIATION PHASE Highly Vital for both management and employees. Important to study the status of the labour organization (Union) Previous negotiations, back ground and personality of the particular union negotiators to be studied.


APPROVAL FROM TOP MANAGEMENT The specific proposals of the company including the objectives of the negotiations The appraisals of the cost of implementing the proposals An approval in principle of the demands over which bargaining to be made (Demands to be accepted and not to be accepted)


NEGOTIATION TECHNIQUE AND PROCEDURE Undertaken by a representative of each party or committee or by line or staff personnel. The negotiation committee may be composed of 3 to 6 members. A committee should be small, otherwise Committees become unwary; They are more difficult to assemble, more likely to disorderly; They are more inclined to concentrate on a discussion of in grievances or problems of interest to one group rather than to the union as a whole.


STRATEGY OF BARGAINING Strategy - mapping out plan and basic policies to be in the bargaining process. Tactics - particular action that are taken with bargaining table. Avoid mutual agreement clauses which would prevent mgt action. Mgt - the right to manage the firm subject to challenge by the union under the contract. Keep one’s eyes on the entire package. A work-procedure concession may eventually cost more than a substantial pay increase. Keep company personal informed of the progress of bargaining sessions.

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Develop agreements where the union leader can always maintain that they “won” union leaders have to for selection on their record and management can more frequently afford the appearance of having “lost”. Determine the point at which the company is willing for the union to go on strike. The union is fully aware of the fact that the strike is its most potent bargaining weapon.


TACTICS OF BARGAINING Arnold Campo For Union & Management- Be friendly in negotiation. Introduce everybody. Be willing to listen. There would be time enough for you to worry about things and say “no”, after you have heard all the facts. Give everyone an opportunity to state his position and point of view. Know something about the personal history of the other party’s representatives. Always bear in mind the fact that you to do what is right and fair

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Both parties should strive to maintain an objective approach to a problem or grievance. Do not attempt to guide the discussion along a straight line which goes straight to the solution of the problems. Define each issue clearly and unambiguously or detail in the contract to ensure greater flexibility. Avoid Sharp practices.

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For the management The management must, at the outset, make sure that the labour it is going negotiate with, are really the representatives of the workers. Don’t use lawyers as negotiators unless they intimate knowledge of industry relations. Don’t limit contracts with the union to controversial subjects, but consider such matters as are of common interest to both.


FOLLOW-UP ACTION The collective bargaining should be printed and circulated among the employees they can know the reality about it. What has been agreed upon between management and represent of union meetings of supervisors should be called with effectively


CONTACT MANAGEMENT When the process of a negotiation has been completed, it is the time to sign the contract, the terms and conditions, which must be observed by both the parties. Once an agreement is signed, both the management and trade unions are required to honor it in letter and sprit, Smith has rightly observed “ An agreement is merely the frame work for everybody relationships…. The bargaining is carried on daily

For Management:

For Management The management should be available for open discussion/ conferences with works representatives so that it may acquire first hand knowledge of the changing attitude and problems of its employees. Give credit to the trade union for anything work while achieved by it. The management should avoid paternalism and strive to treat the trade union representatives and its employees as equals . Many restrictive practices, and what appear to be unseasonable demands on the workers or their representatives, will disappear if the management strives give regular employment to its workers

For Trade Unions:

For Trade Unions That is the responsibility of the trade unions that their members understand terms of the agreement, it has reached with the management. The union representatives should make themselves available for a conference whenever they are required to do so by the management.


GOALS TO BE ACHIEVED BY WORKERS Economic goals: Wages, Hours of work, The working conditions, Fringe benefits Non-Economic goals: Worker’s satisfaction with his job, protection of the Union as a growing institute (right to union)


GOALS TO BE ACHIEVED BY MANAGEMENT Control of the organization, Maintaining its ability to manage with a high degree of flexibility and efficiency of operation Control of hiring, promotion, discharge, lay off Personnel techniques of management Lay down fair rates of wages and norms of working conditions.


Cont… Achieve an efficient operation of the plant Promote an efficient operation of the plant. Promote the stability and prosperity of industry. Bring social change through acceptable solutions.


PRACTICE OF COLLECTIVE BARGAINING The consultative machinery for now practices in India at almost every level i.e. At the level of undertaking : Works Committee & Joint committees At the industrial level: Wage Boards & Industrial Committees At the state level: Labour Advisory Board At the national level: Indian Labour Conference & Standing Labour Committee

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The bipartite consultative machinery The works committee and The joint management councils. Tripartite bodies The Indian labour conference Standing labour committee Committee on conventions Industrial committee


NEGOTIATION VS COLLECTIVE BARGAINING CB - specifically is an industrial relations mechanism or tool - collective interest as the negotiations are for the benefit of several employees - not for one employer but for several, collective interests become a feature for both parties to the bargaining process. NEGOTIATIONS (non-employment situations) collective interests are less, or non-existent, except when states negotiate with each other. In labour relations, negotiations involve the public interest such as where negotiations are on wages which can impact on prices

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When a party / the parties seek the support of the public, especially where negotiations have failed & work disruptions follow. Govts intervene when necessary in CB bcoz the negotiations are of interest to those beyond the parties themselves.


NATURE OF THE RELATIONSHIP Between the parties in CB distinguishes the negotiations from normal commercial negotiations (here buyer may be in a stronger position as he could take his business elsewhere). In the employment relationship the employer is( a buyer of services) & the employee (the seller), and the latter may have the more potent sanction in the form of trade union action.

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