COLLECTIV
E
BARGAINING
Collective Bargaining
⚫ Collective bargaining involves discussion and negotiation
between two groups as to the terms and conditions of
employment.
⚫ It is termed Collective because both the employer’s
negotiators and the employees act as a group rather than
individuals.
⚫ It is known as Bargaining because the method of reaching
an agreement involves proposals and counter-proposals,
offers and counter offers. There should be no outsiders
involved in the process of collective bargaining.
Collective Bargaining - Types
⚫ Composite Bargaining
⚫ Composite bargaining, also known as pattern bargaining,
is a type of collective bargaining where negotiations
address multiple issues simultaneously, and agreements on
one issue can set a precedent for others.
⚫ It moves beyond simply negotiating wages and includes
areas like working conditions, job security, and company
policies.
⚫ The goal is to create a comprehensive agreement that
fosters a long-lasting, positive relationship between
employers and employees.
⚫ Concessionary Bargaining
⚫ Concessionary bargaining is a type of negotiation in which
employees, often represented by a union, agree to give up
certain previously gained benefits or concessions in
exchange for something else, typically job security during
difficult economic times.
⚫ This can involve giving up things like higher wages, better
working conditions, or more generous benefits.
⚫ Distributive Bargaining
⚫ Distributive bargaining is a negotiation strategy where the
focus is on dividing a fixed amount of resources between two
or more parties, often resulting in a win-lose scenario where
one party's gain is another's loss.
⚫ This process is characterized as benefiting one party financially
at the expense of the other. This can come through
increased bonuses, salaries, or any other financial benefits.
Distributive bargaining normally favours workers over
employers.
⚫ Unions must have a higher degree of power for distributive
bargaining to work. Higher membership means more power. If
an employer refuses to accept a union’s demands, it can call a
strike.
⚫ Integrative Bargaining
⚫ Each party tries to benefit through integrative bargaining,
which is why it’s often referred to as a form of win-win
bargaining.
⚫ Each side tries to consider the other’s position and bring
issues to the table that aim to benefit both parties.
⚫ It is a collaborative approach where parties work together
to find solutions that satisfy the needs and interests of
everyone involved.
⚫ Productivity Bargaining
⚫ Productivity bargaining is a form of collective bargaining
where an agreement is reached between employers and
employees to increase productivity in exchange for
increased pay or other benefits.
⚫ It involves changes in work practices, often involving
new technologies or organizational changes, in order to
improve efficiency and output.
Objectives of Collective
Bargaining:
⚫ To maintain cordial relations between the employer and
employees.
⚫ To protect the interests of the workers through
collective action and by preventing unilateral actions from
being taken by the employer.
⚫ To ensure the participation of trade unions in industry.
⚫ To avoid the need for government intervention as
collective bargaining is a voluntary collective process.
⚫ To promote Industrial democracy.
Characteristics of Collective Bargaining:
⚫ It is a group or collective action as opposed to individual action. It is
initiated through the representatives of the employees.
⚫ It is a flexible and dynamic process where-in no party adopts a rigid
attitude.
⚫ It is a continuous process, which provides a mechanism for continuous
negotiations and discussions between management and the trade unions.
⚫ It is a voluntary process without any third-party intervention. Both
workers and management voluntarily participate in the negotiations, discuss
and arrive at a solution. That is why it is known as a bipartite process
where workers’ representatives and management get an opportunity for
clear, face-to-face communication.
⚫ It ensures industrial democracy at the workplace; it is a self-run
government in action.
⚫ It is a two-way process. It is a mutual give and take rather than a take
home all method of arriving at a solution to a dispute.
Process of Collective Bargaining
1) Preparation for Negotiation: Preparation for
negotiation in Collective Bargaining is as important as
the negotiation process itself. Upto 83% of the outcomes
are influenced by pre-negotiation process. Such
preparation is required for both management as well as
the union representatives.
2)Identifying issues for Bargaining: The second step in
bargaining process is the determination of issues which will be
taken up for negotiations. The different types of issues are:
⚫ Wage-related issues: Include wage or salary revision,
allowance for meeting increased cost of living like Dearness
Allowance (D.A), financial perks, incentives etc.
⚫ Supplementary economic benefits: These include pension
plans, gratuity plans, accident compensation, health insurance
plans, paid holidays etc.
⚫ Administrative issues: Include seniority, grievance
procedures, employee health and safety measures, job security
and job changes.
⚫ The wage and benefits issues are the ones which receive the
greatest amount of attention on the bargaining table.
⚫ Negotiation: When the first two steps are completed, both parties
engage in actual negotiation process at a time and place fixed for the
purpose. There are two types of negotiations:
⚫ Boulwarism: Boulwarism is a negotiating tactic, particularly in
labor relations, where one party (often management) presents a
single, firm offer and refuses to negotiate or make concessions. This
"take-it-or-leave-it" approach is named after Lemuel Boulware, the
former vice president of General Electric (GE) who popularized it.
⚫ Continuous Bargaining: Continuous bargaining, is an ongoing
process of negotiation between employers and employee
representatives to address various workplace issues, rather than just
during periodic contract negotiations. It is characterized by open
communication channels and discussions that continue even after a
collective bargaining agreement is reached.
⚫ Initial negotiated agreement: When two parties arrive at
a mutually acceptable agreement either in the initial stage
or through overcoming negotiation breakdown, the
agreement is recorded with a provision that the agreement
will be formalized after the ratification by the respective
organizations.
⚫ Ratification of agreement: Ratification of negotiated
agreement is required because the representatives of both
the parties may not have ultimate authority to decide
various issues referred to for collective bargaining.
⚫ The ratification of agreement may be done by the
appropriate manager authorized for the purpose in the
case of management, or trade executives in the case of
the employees. Ratification is also required by the
Industrial Disputes Act. It is important that the
agreement must be clear and precise. Any ambiguity leads
to future complications or other such problems.
⚫ Implementation of agreement: Signing the agreement is
not the end of collective bargaining, rather it is the
beginning of the process when the agreement is finalized,
it becomes operational from the date indicated in the
agreement.
⚫ The agreement must be implemented according to the
letter and spirit of the provisions made by the agreement
agreed to by both parties. The HR manager plays a crucial
role in the day-to-day administration implementation of
the agreement.
