Collective

Bargaining

CONTENTS

Definitions of Collective Bargaining.

Characteristics of Collective Bargaining
Importance of Collective Bargaining
Essential Conditions for the Collective
Bargaining Functions of Collective
Bargaining
Collective Bargaining Process
Collective Bargaining in India
Recommendations of NCL

DEFINITION
The phrase Collective Bargaining is coined by Sydney and
Beatrice Webb. According to them collective bargaining is a
method by which trade unions protect and improve the
conditions of their members working lives.
According to the Encyclopedia of Social Sciences,
collective bargaining is a process of discussion and
negotiation between two parties, one or both of whom is a
group of persons acting in consent.
The resulting bargain is an understanding as to the terms
and conditions under which a continuing service is to be
performed.... More specifically, collective bargaining is a
procedure by which employers and a group of employees
agree upon the conditions of work.

Characteristics of Collective Bargaining

i) It is a group action as opposed to individual action and is initiated
through the representatives of workers: On the management side are its
delegates at the bargaining table; on the side of the workers is their trade
union, which may represent the local plant, the city membership or nationwide membership.

(ii) It is flexible and mobile, and not fixed or static: It has fluidity and scope
for compromise, for a mutual give-and-take before the final agreement is
reached or the final settlement is arrived at.
(iii) It is a two-party process: It is a mutual give-and-take rather than a take-itor-leave-it method of arriving at the settlement of a dispute. Both parties are
involved in it.

(iv) It is a continuous process: Which provides a

mechanism for continuing and organised
relationships between the management and
trade unions. The heart of collective bargaining
is the process for a continuing joint
consideration and adjustment of plant
problems. It does not end with negotiation..

(v) It is dynamic and not static: Because it

is a relatively new concept, and is
growing, expanding, and changing. In the
past, it used to be emotional, turbulent
and sentimental; but now it is scientific,
factual and systematic. Its coverage and
style have changed. In this connection,

(vi) It is industrial democracy at work: Industrial democracy is the

government of labour with the consent of the governed the workers.
The principle of arbitrary unilateralism has given way to that of selfgovernment in the industry.
Collective bargaining is not a mere signing of an agreement granting
seniority, vacations and wage increases. It is not a mere sitting around
a table, discussing grievances. Basically, it is democratic: it is a joint
formulation of company policy on all matters which directly affect the
workers in a plant. It is self-government in action. It is the projection of
a management policy which gives the workers the right to be heard, It
is the establishment of factory law based on common interest.

 (vii) Collective bargaining is not a competitive

process but it is essentially a complementary
process, i.e.: Each party needs something that the other
party has, namely, labour can make a greater productive
effort and management has the capacity to pay for that
effort and to organise and guide it for achieving its
objectives.
The behavioral scientists have made a distinction
between distributive bargaining and integrative
bargaining. The former is the process of dividing the
cake which represents the whole which has been
produced by the joint efforts of the management and
labour. In this process, if one party wins something, the
other party, to continue the metaphor of the cake, has a
relatively smaller size of it. So it is a win-lose
relationship.

 In other words, distributive bargaining deals with

issues or an issue in which two or more parties
have conflicting or adversary interests.
Integrative bargaining is a process where both
the parties can win, each contributing something
for the benefits of the other party. Such a
process develops common objectives, a better
understanding of each others needs and
capabilities, a better respect for each other, and
a greater involvement of commitment to the wellbeing and growth of the enterprise as a whole.

(viii) It is an art, an advanced form of

human relations: To substantiate this,
one need only witness the bluffing, the
oratory, dramatics and coyness mixed in
an inexplicable fashion which may
characterise a bargaining session.

Importance of Collective
Bargaining
CB plays a vital role in setting and preventing industrial
disputes. Specifically its importance is evident from the
following:
(I) Increase the economic strength of unions and
management;
(ii) Establish uniform conditions of employment with a view
to avoiding industrial disputes and maintaining stable
peace in the industry;
(iii) Secure a prompt and fair readressal of grievances;
(iv) Avoid interruptions in work which follow strikes, go-slow
tactics and similar coercive activities;

(v) Lay down fair rates of wages and norms of working

conditions;
(vi) Achieve an efficient operation of the plant; and
(vii) Promote the stability and prosperity of the industry;
(viii) It provides a method for the regulation of the
conditions of employment of those who are directly
concerned about them;
(ix) It provides a solution to the problem of sickness in the
industry, and ensure old age pension benefits and other
fringe benefits;

CONDITIONS FOR THE SUCCESS OF CB

i)

Constructive consultation between the trade union and

the management is possible only when the bargaining
power of two parties is relatively equal and is exercised
with responsibilities and discrimination.

ii) Two parties of collective bargaining accept the principle

of free consultation and free enterprise consistent
with the advancement of public interest.
iii) The willing acceptance by the management to recognise
representative union for this purpose.

(iv) Both the parties must have mutual confidence,

good faith and a desire to make collective
bargaining machinery a success.
(v) Management should not await the Union to
raise problems but should make every
reasonable effort to prevent them from arising
and to remove them promptly when they arise.
(vi) An emphasis upon a problem solving approach
with de-emphasis upon excessive legalism.

(vii) Dispose off the issues in the same meeting

and minimise pending of items.
(viii) Desire of the management to settle the issues
to the satisfaction of employees. This does not
mean that the management must relinquish its
right to direct the company or that it must
accede to all union demands.
(ix) Unions must understand the economic
implications of collective bargaining and realise
that union demands must be met from the
income and resources of the organisation.

(x) Both the parties should represent the rights and

responsibilities of each other.
(xi) The process of bargaining should be free from unfair
practices.
(xii) Unanimity among workers: Before entering into
negotiations, there must be unanimity among workers. At
least the representatives of workers should be able to
represent the opinion or demands of majority of workers.
(xiii) The attitudes of the parties (involved) should be
positive. Both the parties should reach the negotiating
table with an intention to find better solutions.

(xiv) The parties involved in collective bargaining

should be prepared to give away something in
order to gain something.
(xv) Both the parties to collective bargaining should
observe and follow the terms and conditions of
previous agreements that are reached. Collective
Bargaining, being a continuous process, can be
effective only with the successful implementation
of previous agreements. Any lapse on the part of
any party concerned shows its effect on the
present process.

(xvi) The representatives of both the par should

fully understand and be clear about the
problems and their implications.
(xvii) The workers can make effective use of
collective bargaining process to achieve
participative management and good working
conditions. They should not confine collective
bargaining for mere monetary benefits.

Functions of Collective
Bargaining
Collective bargaining plays an important role in
preventing industrial disputes, settling these disputes
and maintaining industrial peace by performing the
following functions:
(i)

Increase the economic strength of employees and

management.
(ii) Establish uniform conditions of employment.
(iii) Secure a prompt and fair readressal of grievances.
(iv) Lay down fair rates of wages and other norms of
working conditions.
(v) Achieve an efficient functioning of the organisation.

(vi) Promote the stability and prosperity of the company.

(vii) It provides a method of the regulation of the conditions of
employment of those who are directly concerned about
them.
(viii) It provides a solution to the problem of sickness in the
industry and ensures old age pension benefits and other
fringe benefits.
(ix) It creates new and varied procedures for the solution of
the problems as and when they arise problems which vex
industrial relations; and its form can be adjusted to meet
new situations. Since basic standards are laid down, the
employee is assured that he will be required to work under
the stipulated conditions incorporated in the agreement;
and the employer is protected from unfair competition by
those who are engaged in a similar industry.

 It provides a means for the adjustment of wages and

employment conditions to logical changes in the industry,
as a result of which the changes for
As a vehicle of peace, collective bargaining is the most
important and significant aspect of labour management
relations, and extends the democratic principle from the
political to industrial field.
system of industrial jurisprudence by introducing civil rights
in the industry. In other words, it ensures that the
management is conducted by rules rather than by arbitrary
decisions.

Collective Bargaining Process

1. Negotiation
(a)Identification of Problem: The nature of the problem
influences the whole process-whether the problem is
very important that is to be discussed immediately or it
can be postponed for some other convenient time,
whether the problem is minor that it can be solved with
the other partys acceptance on its presentation and
does not need to involve the long process of collective
bargaining process etc.
(b)Preparing for Negotiations: When it becomes
necessary to solve the probtem through collective
bargaining process, both the parties prepare themselves
for negotiations.

(c) Negotiations of Agreement: Usually there will

be a chief negotiator who is from the
management side. He directs and presides over
the process. The chief negotiator presents the
problem, its intensity and nature and the views
of both the parties. When a solution is reached
at, it is put on the paper, taking concerned
legislations into consideration. Both the parties
concerned sign the agreement which, in turn,
becomes a binding contract for both the parties.

2. Contract Administration
Implementation of the contract is as important as
making a contract. Management usually
distributes the printed contract, its terms and
conditions throughout the organisation. The
Union takes steps to see that all the workers
understand the contract and implement it. From
time to time depending
upon changing circumstances, both the parties
can make mutually acceptable amendments.

COLLECTIVE BARGAINING IN
INDIA

Causes for the Limited Success of Collective Bargaining in

India
Though it is argued that collective bargaining has grown in India due
to statutory provisions, voluntary measures, Industrial Truce
Resolution of 1962 and the amendments to the Industrial Disputes
Act, 1947, its success is limited. The causes for its limited success
are:
1. Problems with Unions: Collective Bargaining process mainly
depends on the strength of Unions. But still there are not many
strong unions in India. Indian Unions are marked with multiplicity,
inter and intra-union rivalry, weak financial position and nonrecognition. Weak trade unions cannot initiate strong arguments
during negotiations. There is usually no unanimous decision among
workers to be presented at the negotiating table.

 2. Problems from Government: The

Government has not been making any strong
effects for the development of Collective
Bargaining. The Government has imposed many
restrictions regarding strikes and lock-outs,
which is an obstacle for the development of
collective bargaining process.
3. Legal Problems: Now adjudication is easily
accessible. As such CB process is losing its
importance.

 4. Political Interference: Interference of political leaders

in all increased over the years. Almost all unions are
associating themselves with the political party and
other. And there are many such unions. To protect their
own unions, all the political parties interested in the
matters, creating inter union rivalries.
5. Attitude of Management: In India managements
have negative attitude tods Unions. Jy arbitrary They do
not appreciate their workers joining unions. As strong
unions are a must for collective
bargaining process this attitude of management hampers
the process.

Recommendations of the NCL for Successful

Functioning of Collective Bargaining

National Commission of Labour in 1969 made the following recommendations after considering
the problem:

(a) Government intervention in industrial relations particularly in the settlement of industrial sswhether disputes should be reduced gradually to the minimum possible extent. Compulsory
adjudisome other cation of disputes should be used only as a last resort.
(b) Trade unions should be strengthened both organisationally and financially by amending the
irocess etc. Trade Union Act of 1926 to make registration of unions compulsory, enhance the
union m through membership fee, reduce the presence of outsiders in the union executive and
among the office-bearers and increase the minimum number of members in respect of the union
applying
from the for registration.
(c) Legal provision may be made either by a separate legislation or by amending an existing put on
the enactment for:
Compulsory recognition of trade unions and certification of unions as bargaining agents.
Prohibition and penalisation of unfair labour practices.
Bargaining in good faith by both employers and unions.
Conferring legal validity and legitimacy on collective agreements.

end