Collective Bargaining Introduction - Industrial Relations Management

The process of negotiating the terms of employment between an employer and a group of workers. The terms of employment are likely to include items such as conditions of employment, working conditions and other workplace rules, base pay, overtime pay, work hours, shift length, work holidays, sick leave, vacation time, retirement benefits and health care benefits.

In the United States, collective bargaining takes place between labor union leaders and the management of the company that employs that union’s workers. The result of collective bargaining is called a collective bargaining agreement, and it establishes rules of employment for a set number of years. The cost of this employee representation is paid by union members in the form of dues. The collective bargaining process may involve antagonistic labor strikes or employee lockouts if the two sides are having trouble reaching an agreement.

In the United States, there are unions in both the private sector and the public sector. As of 2009, about 7.2% of private sector employees and 37% of public sector employees were unionized. Categories of workers that belong to unions include grocery store employees, airline employees, professional athletes, teachers, auto workers, postal workers, actors, farm workers, steel workers and many more.

A collective bargaining agreement is the ultimate goal of the collective bargaining process. Typically, the agreement establishes wages, hours, promotions, benefits, and other employment terms as well as procedures for handling disputes arising under it. Because the collective bargaining agreement cannot address every workplace issue that might arise in the future, unwritten customs and past practices, external law, and informal agreements are as important to the collective bargaining agreement as the written instrument itself.

Collective bargaining allows workers and employers to reach voluntary agreement on a wide range of topics. Even so, it is limited to some extent by federal and state laws. A collective bargaining agreement cannot accomplish by contract what the law prohibits. For example, a union and an employer cannot use collective bargaining to deprive employees of rights they would otherwise enjoy under laws such as the civil rights statutes. Collective bargaining also cannot be used to waive rights or obligations that laws impose on either party. For example, an employer may not use collective bargaining to reduce the level of safety standards it must follow under the occupational safety and health act. Furthermore, the collective bargaining agreement is not purely voluntary. One party's failure to reach agreement entitles the other to resort to certain legal tactics, such as strikes and lockouts, to apply economic pressure and force agreement. Moreover, unlike commercial contracts governed by state law, the collective bargaining agreement is governed almost exclusively by federal labor law, which determines the issues that require collective bargaining, the timing and method of bargaining, and the consequences of a failure to bargain properly or to adhere to a collective bargaining agreement.

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

Nature of Collective Bargaining

The ILO Right to Organize and Collective Bargaining Convention (No. 98), 1949 describes collective bargaining as:

"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."
Collective bargaining could also be defined as negotiations relating to terms of employment and conditions of work between an employer, a group of employers or an employers' organization on the one hand, and representative workers' organizations on the other, with a view to reaching agreement.

There are several essential features of collective bargaining, all of which cannot be reflected in a single definition or description of the process:

  1. It is not equivalent to collective agreements because collective bargaining refers to the process or means, and collective agreements to the possible result, of bargaining. Collective bargaining may not always lead to a collective agreement.
  2. It is a method used by trade unions to improve the terms and conditions of employment of their members.
  3. It seeks to restore the unequal bargaining position between employer and employee.
  4. 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.
  5. 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.

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