COLLECTIVE BARGAINING - Industrial Relations Management

Nature and Content of Collective Bargaining

Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firm’s and workers’ representatives for the purpose of establishing mutually agreeable conditions of employment.

Collective Bargaining Issues and Strategies

Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment. It is called ‘collective’ because both the employer and the employee act as a group rather than as individuals. It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals,offers and counter offers and other negotiations.

Thus collective bargaining:

  • Is a collective process in which representatives of both the management and employees participate.
  • Is a continuous process which aims at establishing stable relationships between the parties involved.
  • Not only involves the bargaining agreement, but also involves the implementation of such an agreement.
  • attempts in achieving discipline in the industry.
  • is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.

Forms of Collective Bargaining

A collective bargaining process generally consists of four types of activities- distributive bargaining, integrative bargaining, attitudinal restructuring and intra-organizational bargaining. Distributive bargaining: It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss. This is most commonly explained in terms of a pie.

Disputants can work together to make the pie bigger, so there is enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to get as much as they can for themselves. In general, distributive bargaining tends to be more competitive. This type of bargaining is also called conjunctive bargaining.

Integrative bargaining:

This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. For example, representatives of employer and employee sides may bargain over the better training programme or a better job evaluation method. Here, both the parties are trying to make more of something. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperative bargaining.

Attitudinal restructuring:

This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. When there is a backlog of bitterness between both the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops a bargaining environment and creates trust and cooperation among the parties.

Intra-organizational bargaining:

It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be differences. Trade unions maneuver to achieve consensus among the conflicting groups.

Collective Bargaining Process

Collective bargaining generally includes negotiations between the two parties (employees’ representatives and employer’s representatives). Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment. Often employees are represented in the bargaining by a union or other labor organization.The result of collective bargaining procedure is called the collective bargaining agreement. Collective agreements may be in the form of procedural agreements or substantive agreements. Procedural agreements deal with the relationship between workers and management and the procedures to be adopted for resolving individual or group disputes.

This will normally include procedures in respect of individual grievances, disputes and discipline. Frequently, procedural agreements are put into the company rule book which provides information on the overall terms and conditions of employment and codes of behavior. A substantive agreement deals with specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc. In many companies, agreements have a fixed time scale and a collective bargaining process will review the procedural agreement when negotiations take place on pay and conditions of employment.

The collective bargaining process comprises of five core steps:

  1. Prepare: This phase involves composition of a negotiation team. The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. In this phase both the employer’s representatives and the union examine their own situation in order to develop the issues that hey believe will be most important. The first thing to be done is to determine whether there is actually any reason to negotiate at all. A correct understanding of the main issues to be covered and intimate knowledge of operations, working conditions, production norms and other relevant conditions is required.
  2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process well begun is half done and this is no less true in case of collective bargaining. An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached.
  3. Propose: This phase involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of messages takes place and opinion of both the parties is sought.
  4. Bargain: 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: Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.

Collective Bargaining as a Method of Settlement of Disputes

Till now, collective bargaining has been taken as a means of arriving at an agreement. It establishes rules which the management is bound to implement. Specifically, collective bargaining is:

  • A rule-making or legislative process, in the sense that it formulates the terms and conditions under which labour and management will cooperate and work together over a certain stated period.
  • An executive process; both management (foreman and supervisory officials) and trade union officials share the responsibility of enforcing the rules.
  • A judicial process, for in every collective agreement there is a grievance procedure to settle any dispute concerning the application of the agreement. Where the agreement does not specifically cover the disputes, it may be settled according to the unwritten norms of shop practices. The decisions in these cases act as precedents in a manner similar to the common laws and interpretation of the legislation by the court. After a dispute has erupted, collective bargaining acts as a peace treaty between the two warring groups. The treaty is invariably a compromise, but helps resolve the conflict nevertheless.

Tactics or Strategies in Collective Bargaining

The tactics or strategies to be adopted in any collective bargainingsituation vary depending upon the culture of the organization and different environmental factors, particularly the type of union operating in an industrial establishment.But the following are some of the common strategies to make collective bargaining exercise more meaningful:

  • The management has to anticipate the demands and also understand the main directions in which the demands are going to be placed. Generally speaking, negotiations are best done if both the parties do their home work well. The representatives must come to the bargaining table equipped with the necessary information and supportive data regarding the company’s economic status and prospects, the prevailing rates of pay and conditions of employment in comparable industries in the local areas. The management team should take into consideration the financial liability involved, the past agreements, and the impact of present negotiations in future years.
  • It is essential that a real team spirit is maintained throughout the negotiations. For this purpose, it is necessary that the roles to be played by each member of the team are properly pre-assigned, and each member knows when to take over the discussions. The team must have the confidence of facing any eventuality which may come up during negotiations. The team must have the power of taking decisions. The team must consist of people who have confidence of the workforce and unions. It is good to have a rehearsal among the team members on such points which can be anticipated to be made forcefully by the opposite team.
  • Any collective bargaining strategy should firstly separate the personalities from the problems for arriving at a workable and desirable agreement and secondly,explore the possibilities for harmony and compatibility.
  • Collective bargaining is two way traffic. The management as well as the union must gain out of collective bargaining. Hence, the management team should also present their counter proposals. For instance, the union pressure for a wage-hike may be matched by a counter demand for an increase in production, reduction in absenteeism, avoidance of wasteful/restrictive practices, industrial peace, and so on.
  • There is a greater necessity on the part of the management representatives to give a patient hearing to the demands of the union and not to react even if there is a threat of strike or work-stoppage. A rational well reasoned approach can achieve better results than an emotionally charged loud-mouthed approach.
  • It is also a bad strategy to depute persons of low rank without authority to commit the management on the negotiating table. Such a step may give an impression to the union that the management does not take the bargaining process with all the seriousness that it deserves.
  • It is a good practice always to classify the various demands raised by labor representatives distinguishing the real from the unreal. A thorough analysis and understanding of different items in the charter of demands will enable negotiators to arrive at a proper judgment.
  • It is a good tactic to total the cost of all the union proposals and to take up the non-cost items first or items on which it is easy to come to an agreement so that a suitable collective bargaining atmosphere is created for negotiating on more serious items which have financial implications.
  • Sometimes, the management instead of announcing its concessions at the bargaining table announces them before the conciliation officer as the starting point for further negotiations. This is not bargaining in good faith.

Anycollective bargaining strategymust result in a good agreement or settlement, the characteristics of which are:

  1. It must strike a proper balance between the various factors that go into its making in order to ensure its workability;
  2. it must be viewed as a whole and the interrelation of its parts must be balanced one against the other;
  3. it must be based upon experience, logic and principles rather than on coercive tactics, propaganda and force;
  4. it must be fair and reasonable to the workers as regards their emoluments and service conditions; to the management in terms of improved production and productivity; and to consumer in respect of better quality goods and services; and
  5. it must be complete and coherent in all respects without any ambiguity. In any event, it is enforcement that is the crucial test of a contract’s workability.

As a measure of follow up:

  1. evaluate prevailing environmental changes and cultivate a healthy pragmatic approach;
  2. train and develop rank and file of working group to inculcate in them individual effectiveness and professionalism in collective bargaining; and
  3. develop specific action-plans for collective bargaining based on prevailing situation.

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