Importance of CB, Role of CB, Types of CB, Advantages & Disadvantages, History

1. COLLECTIVE BARGAINING
MS. DINNA JOHNSON
ASSISTANT PROFESSOR
DEPARTMENT OF MANAGEMENT
NIRMALA COLLEGE MUVATTUPUZHA

2. INTRODUCTION
• Collective bargaining is the process where a group of employees
‘collectively’ negotiate with the employer. This is generally to
negotiate pay, working conditions, benefits, and other factors
regarding the employees compensation package and rights.
• Collective bargaining typically refers to the negotiation,
administration and interpretation of a written agreement
between two parties that covers a specific period of time. This
agreement or contract lays-out in specific terms the conditions
of employment, puts some limits on employees and restricts
management’s authority. It is the practice in which union and
company representatives meet to negotiate a new labour
contract.

3. • The process is ‘collective’ because representatives of
employees and employers act in groups rather than as
individuals solve issues relating to terms and conditions of
employment.
• The process of collective bargaining is bipartite in nature, i.e.
the negotiations are between the employers and the
employees, without a third party’s intervention.
i. Is a collective process in which representatives of both the
management and employees participate.
ii. Is a continuous process which aims at establishing stable
relationships between the parties involved.
iii. Not only involves the bargaining agreement, but also involves the
implementation of such an agreement.
iv. Attempts in achieving discipline in the industry.
v. Is a flexible approach as the parties involved have to adopt a
flexible attitude towards negotiations.

4. The history of collective bargaining is as
old as the history of trade unions in the
country.
i. First phase (1950s-60s)—period of
substitution.
ii. Second phase (mid 1960s—79)—
period of economic stagnation and
political instability.
iii. Third phase (1980-91)—period of
uneven economic development.
iv. Fourth phase (1991 onwards)—
post-economic reforms and
structural adjustment.
Importance of C B
(i) Increase the economic strength of unions and
management;
(ii) Establish uniform conditions of employment with a
view to avoiding industrial disputes and maintaining stable
peace in the industry;
(iii) Secure a prompt and fair redressal of grievances;
(iv) Avoid interruptions in work which follow strikes, go-
slow tactics and similar coercive activities;
(v) Lay down fair rates of wages and norms of working
conditions;
(vi) Achieve an efficient operation of the plant; and
(vii) Promote the stability and prosperity of the industry;
(viii) It provides a method for the regulation of the
conditions of employment of those who are directly
concerned about them;
(ix) It provides a solution to the problem of sickness in
industry, and ensure old age pension benefits and other
fringe benefits;

5. collective bargaining plays an important role in preventing
industrial disputes, settling industrial disputes and maintaining
industrial peace by performing the following functions
• (i) Economic strength – Increase the economic strength of employees and management.
• (ii) Uniformity – Establish uniform conditions of employment.
• (iii) Fair redressal – Secure a prompt and fair redressal of grievances.
• (iv) Norms – Lay down fair rates of wages and other norms of working conditions.
• (v) Efficiency – Achieve an efficient functioning of the organization.
• (vi) Stability – Promote the stability and prosperity of the company.
• (vii) Regulation – It provides a method of the regulation of the conditions of employment of
those who are directly concerned about them.
• (viii) Solution – It provides a solution to the problem of sickness in industry, and ensures old age
pension benefits and other fringe benefits.

6. • (ix) New procedures – It creates new and varied procedures for the solution of the
problems as and when they arise problems which vex industrial relations; and its form can
be adjusted to meet new situations. Since basic standards are laid down, the employee is
assured that he will be required to work under the stipulated conditions incorporated in
the agreement; and the employer is protected from unfair competition by those who are
engaged in a similar industry.
• (x) Flexible means – It provides a flexible means for the adjustment of wages and
employment conditions to economic and technological changes in the industry, as a result
of which the changes for conflicts are reduced.
• (xi) Democratic principles – As a vehicle of industrial peace, collective bargaining is the
most important and significant aspect of labor-management relations, and extends the
democratic principle from the political to the industrial field.
• (xii) Industrial Jurisprudence – It builds up a system of industrial jurisprudence by
introducing civil rights in industry. In other words, it ensures that management is
conducted by rules rather than by arbitrary decisions.

7. TYPES OF CB
• 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 known as conjunctive bargaining.

8. • Integrative Bargaining
This involves negotiation of an issue on which both the parties may
gain, or at least neither party loses. This type of bargaining is also
known as cooperative bargaining. The integrative strategies require
that both management and the union drop combative attitudes and
adopt a genuine interest in the joint exploration of solutions to
common problems. To work effectively, integrative bargaining must
become a way of life for the two parties that include continual efforts
to improve relationships through regular discussions of problems at all
levels and willingness to attempt to settle these problems with third
party interventions.

9. • Attitudinal Restructuring:
This involves shaping and reshaping some attitudes like trust or
distrust, friendliness or hostility between labour 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.

10. • Intra-Organizational Bargaining
It generally aims at resolving internal conflicts. This is a type of
manoeuvring to achieve consensus with the workers and
management. Even within the union, there may be differences
between groups.

11. • Productivity Bargaining
• Productivity bargaining involves both parties negotiating around productivity
and pay. So unions may suggest that higher salaries would boost productivity.
However, this is unknown to the business. So target-orientated bonuses may be
suggested, or new ways of improving the process.
• Unions may suggest new ways of organising the worker force than may increase
productivity and therefore create value to the firm. In turn, employers would
look to increase employees wages as a result.
• Simply put, productivity bargaining is where the two parties look to agree to
changes that would boost productivity in return for higher wages or other
benefits.

12. • Composite Bargaining
• Composite bargaining refers to a negotiation that focuses on a number of
elements that are not related to pay. They are generally related to employee
welfare and job security. For instance, it covers factors such as working
conditions, policies, recruitment, and disciplinary processes.
• The aim is to ensure a mutually beneficial long-term relationship between the
employer and employee. It does this by highlighting issues that employees may
have, which may impact their long-term future at the company.
• Businesses want to retain talent, particularly if they spend time and money
training them up. Factors such as workload and working conditions can impact
on this long-term relationship. So it is in the best interest of both parties to
ensure that the employees are happy.

13. • Concessionary Bargaining
• Concessionary bargaining is based on unions giving back previous benefits
to the employer. For instance, trade unions may agree to lower wages in
return for job security.
• This may come during an economic decline whereby job security is more
important to the unions than higher wages. Overall, this may actually benefit
the company as they won’t have to pay for so many redundancies and can
keep workers on.
• The main aim of concessionary bargaining is to strengthen the business in
order to ensure its survival alongside its employees. So unions give back
previous benefits in order to secure the businesses’ long-term future and
therefore its members

14. collective bargaining has been viewed from
three perspectives, particularly in industrial
system
• As a process of social balance.
• As a peace treaty between conflicting parties.
• As a system of industrial jurisprudence.

15. PROCESS OF SOCIAL BALANCE
• In a society, there are so many groups with each group exercising power
over others in the social exchange process. Though society intends to
distribute power equally among different groups for smooth enacting of
social exchanges, several factors emerge which result in unequal
distribution of power.
• In order to overcome this inequality, various social groups form coalitions to
derive more power to bargain with a powerful group. Same phenomenon
takes place in an industrial system where workers unite through unions and
bargain with management about what they perceive to be their rights. This
is the real spirit behind collective bargaining. However, in a narrow sense,
this approach is treated as means for settling industrial disputes.

16. PEACE TREATY
• Treaty is a kind of agreement between two or more parties. The
concept of treaty is frequently used in political and other
systems. Peace treaty is a kind of negotiated agreement
between two or more conflicting parties to settle their
differences and maintain peace among them.
• In an industrial system, collective bargaining is used as a peace
treaty between labour and management. Like any other treaty,
agreement arrived at collective bargaining between labour and
management has a definite life period.

17. INDUSTRIAL JURISPRUDENCE
• The term jurisprudence means science of human law. Applied in the context
of industrial system, industrial jurisprudence means the application of civil
rights in the industry. Collective bargaining creates a system of industrial
jurisprudence in which it is expected that management deals with labour by
rules rather than by arbitrary decisions. Rules provide standards for actions to
be taken by organizational members.
• There are two types of rules — substantive and procedural. Substantive rules
regulate the relationships between individuals and may be of three types —
economic relationship rules which set down the terms on which existing as
well as prospective labour force will offer their labour, political relationship
rules which stipulate who may exercise power on whom and for what
purpose, and social relationship rules which provide standards of behaviours
based on shared interests, sentiments, beliefs, and values of various groups
of employees.
• Procedural rules set out the procedures that govern the behaviour of two
groups — management as representative of employer and union as

18. the main advantages of collective
bargaining are as follows
• Effective in Protecting and Promoting Interests of Workers
• Control of Management’s Autocracy
• Promotion of Durable Industrial Peace
• Conducive to the Enhancement of Managerial Efficiency
• Establishment of Industrial Rules and Creation of Labour
Standards

19. disadvantages of collective bargaining
• Strikes
• Based on Power and Conflict
• Lacks Safeguards for Public Interest