Management of Industrial Relations

What is Collective Bargaining and Process of Collective Bargaining

What is Collective Bargaining – The phrase collective bargaining is made up of two words – Collective and bargaining – the process is ‘collective’ because issues relating to terms and conditions of service are solved by representatives of employees and employers in groups rather than as individuals. The term ‘bargaining’ refers to evolving an agreement using methods like negotiations, discussions, exchange of facts and ideas, rather than confrontation.

Collective bargaining is a source of solving the problems of employees in the work situation collectively. It 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.

Process of Collective Bargaining

(1) Preparing for Negotiation – Careful advance preparations by employers and employees are necessary because of the complexity of the issue and the broad range of topics to be discussed during negotiations. Effective bargaining means presenting an orderly and factual case to each side.

From the management side the negotiators are required to –

  • Prepare specific proposals for changes in the contract language.
  • Determine the general size of the economic package the company proposes to offer.
  • Prepare statistical displays and supportive data for use in negotiations.
  • Prepare a bargaining book for company negotiations, a compilation of information on issues that will be discussed, giving an analysis of the effect of each case, its use in other companies, and other facts.

From the employees’ side, the union should collect information in atleast three areas –

  • The financial position of the company and its ability to pay.
  • The attitude of the management towards various issues, as reflected in past negotiations or inferred from negotiations in similar companies.
  • The attitudes and desires of the employees.

The other arrangements to be made are selecting the negotiators from both sides and identifying a suitable site for negotiation.

(2) Identifying Bargaining Issues – The major issues in collective bargaining are explained below –

  • Wage Related Issues – These include topics like how basic wage rates are determined, cost-of-living adjustments, wage differentials, overtime rates, wage adjustments, etc.
  • Supplementary Economic Benefits Issues – These include issues as pension plans, paid vacations, paid holidays, health insurance plans, dismissal plans, supplementary unemployment benefits, etc.
  • Institutional Issues – These consist of rights and duties of employers, employees and unions, including union security, check-off procedures, quality of work-life programme, etc.
  • Administrative Issues – These include issues such as seniority, employee discipline and discharge procedure, employee health and safety, technological changes, work rules, job security and training, attendance, leave, etc.

While the last two categories contain important issues, the wage and benefit issues are the ones, which receive the greatest amount of attention at the bargaining table.

(3) Negotiating – The negotiating phase begins with each side presenting its initial demands. The negotiation goes on for days until the final agreement is reached. But before the agreement is reached, it is a battle of wits, playing on words, and threats of strikes and lock-outs.

It is a big relief to every body when the agreement is finally signed by the management representatives and the union. The success of negotiation depends on skills and abilities of the negotiators.

(4) Reaching and Ratifying the Agreement – After an initial agreement has been made, the two sides usually return to their respective constituencies to determine whether what they have informally agreed upon is acceptable. A particularly crucial stage is ratification. In this stage, the union-negotiating team explains and puts the agreement to the union members for a vote. If voted, this agreement is formalised into a contract. It is important that the contract must be clear and precise. Any ambiguity leads to grievances or other problems.

(5) Contract Administration – Signing the agreement is not the end of collective bargaining; rather it is the beginning of the process. The agreement must be implemented according to the letter and spirit of the provisions of the agreement. But in day-to-day stress of the work environment, strict adherence to the provisions may not always be easy. Moreover, it may be difficult to draft a flawless agreement, notwithstanding the exacting efforts of the most experienced negotiators and lawyers specialised in IR. Flaws are allowed to continue till the expiry of the agreement period. Faulty implementation or violation of any provision leads to disputes.

The HR manager plays crucial role in the day-to-day administration of the contract. He or she advises on matters of discipline and works to resolve grievances arising out of the agreement. In addition, he or she works with the line management to establish good working relationship with all employees affected by the terms and conditions of the agreement.

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