There are three distinct steps in the process of collective bargaining;

  1. The creation of the trade agreement,
  2. The interpretation of the agreement, and
  3. The enforcement of the agreement.

Each of these steps has its particular character and him, and therefore, each requires a special kind of intellectual and moral activity and machinery.

  1. The Creation of the Trade Agreement:
  2. In negotiating the contract, a union and management present their demands to each other, compromise their differences, and agree on the conditions under which the workers are to be employed for the duration of the contract. The coverage of collective bargaining is very uneven; in some industries almost all the workers are under agreement, while in others only a small portion of the employees of the firms are covered by the agreement. The negotiating process is the part of collective bargaining more likely to make headline news and attract public attention; wage increases are announced, ominous predictions about price increases are reduction in employment are made. And it is in the negotiating process that strikes and threats of strikes are most liable to occur, particular strikes which shut down an entire industry.

  3. The Interpretation of the Agreement:
  4. The administrative process is the day-to-day application of the provisions of the contract to the work situation. At the time of writing the contract, it is imposible to foresee all the special problems which will arise in applying its provisions. Sometimes, it is a matter of differing interpretations of specific clause in the contract, sometimes; it is a question of whether the dispute is even covered by the contract. Nevertheless, each case must somehow be settled. The spirit of the contract should not be violated. The methods that management and the union pointy adopt for this purpose constitute the administrative process.

  5. Enforcement of the Agreement:
  6. Proper and timely enforcement of the contract is very essential for the success of collective bargaining. If a contract is enforced in such way that it reduces or nullifies the benefits expected by the parties, it will defeat basic purpose of collective bargaining. It may give rise to fresh industrial disputes. Hence, in the enforcement of the contract the spirit of the contract should not be violated. However, new contracts may be written to meet the problems involved in the previous contract. Furthermore, as day-to-day problems are solved, they set precedents for handling similar problems in future. Such precedents are almost as important as the contract in controlling the working conditions. In short, collective bargaining is not an on-and-off relationship that is kept in cold storage except when new contracts are drafted. Rather it is continuously, going relationship that takes on new dimensions each day.

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