Collective bargaining is a process of negotiation between employers and employees aimed at reaching agreements that regulate working conditions. It typically involves representatives of management and unions meeting to negotiate terms covering wages, hours, and other conditions, which are then documented in a collective bargaining agreement. Successful collective bargaining requires freedom of association, stable unions recognized by employers, good faith efforts to resolve differences, mutual respect between parties, and a supportive legal system. In Bangladesh, collective bargaining is governed by the Labor Act of 2006, but faces challenges from weak and unstable unions that do not represent most employees.

1. Industrial Relations
Chapter: 6
Collective Bargaining

2. Topic:
Concept, Objectives of collective bargaining, Collective
bargaining activities, Collective bargaining process,
Bargain-able issues, Types and level of collective
bargaining, Pre-requisite for successful collective
bargaining, Tactics to be followed in collective bargaining.

3. Collective Bargaining
• Collective Bargaining
– Typically refers to the negotiation, administration, and
interpretation of a written agreement between two parties
that covers a specific period of time.
– Is a process of negotiation between employers and a group
of employees aimed at reaching agreement that regulate
working conditions.
– In short, it is a process through which representatives of
management and the union meet to negotiate a labor
agreement.
– The agreement will contain specific provisions covering
wages, working hours, and working conditions.

4. Essential Elements of Collective Bargaining
Four Essential Elements of Collective Bargaining
1. Legal • Collective bargaining is a process of
negotiating an agreement.
2. Economic • Its contents specify the terms and conditions
of employment (e.g., salary/wage increase,
benefits, etc.).
3. Political • The agreement is a product of a negotiation
between labor and management.
4. Moral • It involves a system of shared responsibility
and decision making

5. Features of Collective Bargaining
• Features of Collective Bargaining
– It is a collective process
•The representatives of both workers and management
participate in bargaining.
– It is a continuous process
•Does not commence simply with negotiations and end
with an agreement; also includes implementation and
administration of the contract.
– It is a flexible and dynamic process.
•The parties have to adopt a flexible attitude through the
process of bargaining.
– Bipartite process
•No third party intervention; between management and
trade union, face to face, across the table.

6. Objectives of Collective Bargaining
• Objectives of Collective Bargaining
– To settle disputes/conflicts relating to working conditions
and wages.
– To protect interest of workers through collective action.
– To ensure participation of Trade Unions.
– To resolve the differences between workers and
management.
– To avoid third-party intervention in matters relating to
employment
– To maintain cordial relations between management and the
workers

7. Importance of Collective Bargaining in IR
Collective bargaining is important because it promotes the
rights and ideals of labor
1. Right to life • CB is a means of improving workers’ standard
of living through just compensation and
humane working conditions.
2. Right to
work
• It guarantees security of tenure and employees
promotion on the basis of seniority.
3. Right to
equity
• It defines the right and responsibilities of labor
and management.
4. Right to
participate
• It affords participation to labor in running an
• enterprise through shared decision-making,
control, management, and ownership of the
means of production.
5. Industrial
peace
• It includes machinery for settling grievance or
labor disputes on employment –related issues.

8. Importance of CB to Employees, Employers, and Society
Importance to Employers Importance to Employees
• Promotes a sense of job security
among employees; thereby
reduce the cost of employee
turnover.
• Opens up a channel of
communication between
workers and management; thus
increase workers’ participation
in decision-making.
• Plays vital role in settling
industrial disputes.
• Increases the strength of the
workforce, thereby, increasing
their bargaining capacity as a
group
• Increases the morale and
productivity of employees
• Restricts management’s
freedom for arbitrary action
against the employees
• Helps in securing a prompt and
fair settlement of grievances
Importance to Society
• Leads to industrial peace in the country
• Helps to establish a harmonious industrial climate
• Provides a method or the regulation of the conditions of
employment.

9. Collective Bargaining Participants
1. Management
– Is represented by senior management for industrial
relations, corporate executives and company lawyers
– In small companies, the president typically represents the
company.
2. Union
– Bargaining teams include an officer of the local union,
local shop stewards and representation from the
international/national union.
3. Government
– Watches to ensure rules are followed.
4. Financial institutions
– Set limits on the cost of the contract
– Not directly involved in negotiation.

10. Principles of Collective Bargaining
Principles for Trade Unions Principles for Management
• Should have open mind on
various issues
• Should fully support
management
• Should not be any room for
confusion /misunderstanding
• Strike calls should be the last
resort
• Should give proper
recognition to trade unions
• Rules governing labour
should be periodically
examined
• All the clauses of agreements
should be accepted in true
spirit.
Principles for both Trade Unions and Management
• Both the parties should have faith on each other.
• Both the parties should have positive view of whole process
rather thinking it as formality.
• Both the parties should adhere to all laws applicable to Collective
Bargaining.

11. Bargain-able Issues
• The major issues dealt with in collective bargaining
– Wage Related Issues
• These include topics like how basic wage rates are
determined, cost–of-living adjustments (COLA), wage
differentials, overtime rates, wage adjustments etc.
– Supplementary Economic Benefits
• These include issues as pension plans, paid vacations, paid
holidays, health insurance plans, dismissal plans etc.
– Institutional Issues
• These consists of rights & duties of employers, employees &
unions, including union security, check off procedures,
quality of work-life program etc.
– Administrative Issues
• These include issues such as seniority employee discipline
& discharge procedure, employee health & safety, work
rules, job security, technological changes, attendance etc.

12. Bargain-able Issues
Example of Some Collective Bargaining Issues
Wages Hours Working
Conditions
Job Security
• Regular
compensation
• Overtime
compensation
• Incentives
• Insurance
• Pensions
• Regular
work hours
• Overtime
work hours
• Vacations
• Holidays
• Rest periods
• Grievance
procedure
• Union
membership
• Disciplinary
matters
• Technological
changes
• Due
collections
• Seniority
• Evaluation
• Promotion
• Lay-off
• Recalls

13. Collective Bargaining Process
Preparation for
Negotiation
Contract
Negotiation
Agreement
Union Ratification
Contract
Administration
Yes
No
Negotiation Breakdown
• Third party
Intervention
• Strikes/Lockout
No

14. Collective Bargaining Process
1. Preparing to Negotiate
– Fact-gathering
• Management collects internal information such as
employee performance records, overtime and external
data on what similar organizations are doing and the
economy
• Union collects information on cost of living,
productivity, minimum budget requirements,
company’s ability to pay, industry practice etc.
– Goal-setting: Management/Union decides what it can
expect from the negotiation.
– Strategy development: This includes assessing the other
side’s power and tactics.
Preparation includes researching and formulating proposals.

15. Collective Bargaining Process
1. Preparing to Negotiate
– Fact-gathering
• Management collects internal information such as
employee performance records, overtime and external
data on what similar organizations are doing and the
economy
• Union collects information on cost of living,
productivity, minimum budget requirements,
company’s ability to pay, industry practice etc.
– Goal-setting: Management/Union decides what it can
expect from the negotiation.
– Strategy development: This includes assessing the other
side’s power and tactics.
Preparation includes researching and formulating proposals.

16. Collective Bargaining Process
2. Negotiation at the Bargaining Table
– Negotiation is the actual deliberation of proposals by the
union and the management. It is composed of five stages:
a. The union submits a notice to negotiate together with its
proposals to the company.
b. The company answers the notice to negotiate after
receipt of said notice.
c. The union’s bargaining representatives and the
management hold meetings and conferences to discuss
the proposal.
d. If both parties agree on the proposal, a collective
bargaining agreement is signed
e. No agreement – Negotiation Breakdown/Deadlock

17. Collective Bargaining Process
2. Negotiation at the Bargaining Table (cont’d)
– No agreement : Negotiation Breakdown/Deadlock
• Third-party interventions (conciliators, arbitrators)
• Union’s Strategies for overcoming negotiation
breakdown;
– Strikes, Boycott, Go-slow, corporate campaign etc.
• Management’s strategies for overcoming negotiation
breakdown;
– Lock-out
– Hire replacement for strikers.

18. Collective Bargaining Process
3. Union Ratification
– The CBA is presented to the general membership for
ratification.
– Until approved by majority of members, proposed
agreement is not final.
4. Contract Administration
– Larger and perhaps more important part of collective
bargaining.
– The merit of a collective bargaining agreement lies to a
great extent of the implementation of its provision.
– How this provision is put into practice is subject to the
interpretation of labor and management, a process that
sometimes leads to a dispute.
•To accommodate the conflict, CBAs include machinery
for settling grievances or disputes.

19. Levels of Collective Bargaining
Economy-wide framework
(national)
Industry or
sectoral
bargaining
Decentralization
Range of Employee Covered
Plant
Level

20. Levels of Collective Bargaining
1. Economy-
wide
(national)
• Bargaining is a bipartite or tripartite form of
negotiation between union confederations, central
employer associations and government agencies.
• Aims at providing a floor for lower-level
bargaining on the terms of employment, often
taking into account macroeconomic goals.
2. Industrial
or Sectoral
• It aims at the standardization of the terms of
employment in one industry, includes a range of
bargaining patterns.
• Bargaining may be either broadly or narrowly
defined in terms of the industrial activities covered
and may be either split up according to territorial
subunits or conducted nationally.
3. Enterprise
or plant
• It involves the company and/or establishment.
• It emphasizes the point that bargaining levels need
not be mutually exclusive.

21. Types of Collective Bargaining
1. Distributive Bargaining
– In this One party’s gain is another party’s loss. e.g., wages
2. Integrative Bargaining
– In this both the parties may gain or at least neither party
loses e.g., better training programs.
3. Attitudinal Structuring
– When there is backlog of bitterness between both the
parties then attitudinal structuring is required to make
smooth industrial relations.
4. Intra-Organisational Bargaining
– There can be conflicting groups in both mgt.& unions,
therefore, so there is need to achieve consensus in these
groups.

22. Types of Collective Bargaining
• Distributive Bargaining and the Settlement Range

23. Types of Collective Bargaining
• Four Sub-process of Labor Negotiation

24. Trade Union’s Sources of Bargaining Power
• Power is motivational force that induces parties to compromise
goals in order to reach agreement
• Sources of Union Bargaining Power
– Employer’s Ability to Pay
• Product market characteristics that improve employer’s
ability to pay
• Increased labor costs may pass to consumers by setting
higher price.
• Industrial concentration and administered pricing
(especially if few substitutes)
• Geographic limitation (if unionized employers have little
fear of non-union employers coming into industry)
• Regulatory rate setting
• Government contracts
• Productivity

25. Trade Union’s Sources of Bargaining Power
• Sources of Union Bargaining Power (cont’d)
– Union Ability to Make Employer Pay
• Organization of relevant work-force (especially if hard to
substitute for union labor)
• Appropriate bargaining structure
• Management Ability to Take Strike
– Ability and willingness of management to take strike is major
source of bargaining power;
• Timing: employers more resistant during off-peak periods; if timing
can’t be controlled, may be offset by stockpiling.
• Technology: if highly automated, easier to operate workers/strikers,
e.g., telephone industry.
• Availability of replacements: supervisors, hired replacements –
depends on nature of labor market and skill level of strikers
• Competition: ability to take strike increases if no adequate
substitutes – note that industrial concentration both increases
employers ability to pay and ability to take strike.

26. Collective Bargaining Tactics
1. Control the Agenda
– The union must not give up the control of agenda to
employer’s representatives during the bargaining session’
– One strategy to control the agenda is using a single spoke-
person from the union in bargaining sessions.
– Focusing union power through a single point transmits the
appearance of control and power.
1. Control the Agenda 2. Setting Ground Rules
3. Documentation
4. Argumentation 5. Caucus

27. Collective Bargaining Tactics
2. Ground Rules
– Setting bargaining rules before the beginning of the
bargaining with the management often gives the union a good
advantage in bargaining.
– Some of the matters that should be addressed as a part of
ground rules are;
• Time, place, and frequency of bargaining sessions.
• Methods of communications between sessions, when the next
session is not scheduled.
• Release time and payment of wages for members of the union
bargaining committee.
• Methods for maintaining an official records of the sessions, if a joint
record is to be kept.
• Clarification of the authority of the bargaining committee.
• Procedures for the exchange of proposals
• Restrictions on or procedures concerning external communication
concerning the progress of negotiation.

28. Collective Bargaining Tactics
3. Documentation
– Union must have own mechanism to record all the
discussions in the bargaining session
– One member should be appointed to take all the notes;
however, all members except the spokesperson should take
note of all relevant issues in bargaining sessions to ensure
that the union’s documentation is complete and accurate.
– This will help union to periodically check the records to
assure that no significant errors or omissions have crept
into the record.

29. Collective Bargaining Tactics
4. Argumentation
– Union must have solid arguments prepared to explain and
justify its position on every issue introduced in negotiation.
– Techniques of argumentation and logic are useful in
negotiations for three distinct purposes;
5. Caucus
– One important tactic is CB is caucus – withdrawing
temporarily from direct negotiation with the employers.
– A caucus can be called when there is a internal disagreement
between bargaining committee regarding any issues.
– Sometimes, it is used as a means of regaining the control of
bargaining agenda and increase the pace of negotiation.
Explanation Justification Persuasion

30. Conditions for Successful Bargaining
1. Freedom of
association
• Workers and employers are free to form
their own associations to represent their
interests.
2. Stability of union • Union is able to honor the agreement.
3. Recognition of
union by employer
• Collective bargaining begins after
employer recognizes the union that
claims to represent the specific group of
workers.
4. Good faith • Both parties must be willing to resolve
differences to reach an agreement.
5. Mutual respect • Relationship affected and process
becomes tense and difficult if any party
used unfair practices such as
victimization.
6. Supportive legal
system
• Employment laws to ensure process
takes place in an orderly manner.

31. Collective Bargaining Practices in Bangladesh
• Legal Framework of Collective Bargaining (Bangladesh
Labor Act 2006)
– Requires registered trade union to become nominated as
Collective Bargaining Agent (CBA)
– If there is only one trade union in an enterprise with at
least 30 per cent of workers employed therein as its
members, it is declared as the Collective Bargaining Agent
(CBA) for that enterprise.
– If there is more than one registered trade union in any
enterprise one of the trade unions is elected as CBA by all
the workers employed in that enterprise through a secret
ballot.
– The tenure of the office of the CBA is two years.

32. Collective Bargaining Practices in Bangladesh
• Collective Bargaining Process (Bangladesh Labor Act 2006)
– A CBA is legally entitled to raise labor disputes on behalf
of the workers and to bargain collectively with the
employers on the issues of disputes
– Collective Bargaining negotiations have to be completed
within 21 days after the official demand.
– If a settlement is arrived through collective bargaining, a
memorandum of settlement is recorded in writing and
signed by both the parties and a copy thereof is forwarded
to the appropriate government authority
– If the parties fail to arrive at memorandum of settlement
through collective bargaining, any of the parties, either the
CBA or the employer, can refer the dispute to the
conciliator in writing with a request to conciliate

33. Collective Bargaining Practices in Bangladesh
• Collective Bargaining Process (cont’d)
– A plant level trade union, which is elected as CBA, can
raise a dispute in writing and place it before the
management for collective bargaining and Collective
bargaining (bipartite negotiation) starts within 15 days of
submitting a written demand from either party.
– As per the Labor Act 2006 sectoral bargaining is not
allowed; only bargaining by group of enterprises is
allowed.
– Collective Bargaining is not allowed in industries situated
in EPZs.

34. Problems of Collective Bargaining in Bangladesh
1. Due to the dominance of outsiders in trade unionism in the
country, there is multiplicity of unions which are weak and
unstable, and do not represent majority of the employees.
Moreover, there are inter-union rivalries, which further hinder
the process of collective bargaining between the labor and the
management.
2. Trade unions are having political affiliations, they continue to be
dominated by politicians, who use the unions and their
members to meet their political ends.
3. There is a lack of definite procedure to determine which union is
to be recognized to serve as a bargaining agent on behalf of the
workers
4. There has been very close association between the trade unions
and political parties. As a result, trade union movement has
leaned towards political orientations rather than collective
bargaining.