Meaning:
Collective Bargaining is an arrangement whereby the employees and employers voluntarily discuss together and settle the disputes related to the Employment such as; working conditions, working hours, wages and salaries etc.
In the process of bargaining, the terms which are finalized by the employees are done together with mutual consent and hence it’s called “Collective Bargaining”
Forms of Collective Bargaining:
During the process of Collective Bargaining, the agreement can take one or the other form.
There are namely 4 forms of Collective Bargaining:
1.Negotiation– The process in which the representatives of employers and the employees sit face to face and negotiate about certain terms and condition.
2.Mediation: This process involves a 3rd party. In case when the settlement couldn’t take place by the way of negotiation, then a 3rd party’s help can be taken. The main motive of the 3rd party is to assist the parties to reach an agreement.
3.Voluntary Arbitration– An act of settling labour disputes through a medium of neutral third party. The Parties to a dispute can themselves agree to submit for the settlement by a third party and abide by his award. In this case, the selection of arbitrator entirely rests with the parties to dispute.
4.Compulsory Arbitration: In this case, the dispute might be submitted to the arbitrator under the provision of the statute. The award is binding on the parties and is also enforceable in the courts.
Essential Conditions for Collective Bargaining:-
1.Right to organise -The success of collective bargaining in any country depends upon the right of the workers to organise themselves and bargain. This means that the workers must have the Right to Freedom of Association and Protection of Right to Organise Conventions, 1948 and Right to Organise and Collective Bargaining, 1949 was a condition sine qua non for collective bargaining.
2.Stable and strong trade unions: The second crucial and significant factor is that the trade unions must be stable and strong the more the organisations or unions of workers are strong the more significant role they will be able to play at the bargaining table. The more industrialised a Country is, the stronger will be the trade union.
3.Recognition of trade unions– For successful collective bargaining recognition of Trade unions is most essential. Unless the trade union is recognised by employers, the union will face lf problems before going to the negotiating table with the employer. If the employer declines to recognise the trade union of workers, collective bargaining will almost be impossible.
4.Attitude of employer and trade unions. In addition to the above factor on which the success of collective bargaining depends it also greatly depends on the attitude of the parties, the trade union and the employer. If they are rigid and non -compromising it may create a problem for collective bargaining. On the contrary, if parties are compromising and are ready to give and take, they may achieve at least something by collective bargaining. If the parties talk on the table with an open mind and show a willingness to understand and appreciate each other’s viewpoint may result in some achievement for both the parties.
5.Suitable framework– Collective bargaining can work smoothly only if there are established bodies and cures for bargaining and other supporting measures such as official labour management relations advisory service etc. In most of the developing countries either there are no such bodies or they are rudimentary. In the absence of the above, the problems to be discussed are so numerous that collective bargaining almost fails.
Statutory and non-statutory bargaining:-
Collective bargaining within countries is regulated by legislation while in some others it is depending on the initiative of the parties. Thus it is of two kinds.
Collective Bargaining which is regulated by statute that is called statutory and it is non-statutory where it depends on the initiative of parties. In those countries where parties are required to negotiate under law, it is called statutory bargaining.
In non-statutory collective bargaining, there may be three types of feasible circumstances.
- Parties may mutually approve to pursue collective bargaining for settling their differences.
- The government may stipulate a code or other similar device requiring parties to resolve their difference by mutual negotiation. This is voluntary in nature.
- A consensus might have emerged to follow collective bargaining in the tripartite bodies at the national level.
Objectives of collective bargaining:-
Collective bargaining serves two objectives:
1. As a means of regulating wages and conditions of employment; and
2. As a means of regulating labour management relations.
Bargaining bodies:-
Bargaining bodies are those organizations within which parties concerned meet to examine and negotiate terms and conditions of employment. The nature, structure and operation of bargaining bodies widely alter in different countries of the world.
In some countries, these bodies are constituted obeying the provisions of law and in others their constitution is voluntary. There is another difference also. In some countries, the bodies are bipartite and in some tripartite.
In bipartite the representatives of the employer, and the employees and in tripartite in addition to the above two, some person from the Government is also included.
There can be another classification also of these bargaining bodies from the point of view of the level of operation.
- Those operating at the national level.
- Those operating at the industrial level
- Those operating at unit /enterprise level. At the national level, they discuss the questions of the nation.
Types of Collective Bargaining:-
1. Distributive Bargaining:
In distributive bargaining, one party’s gain is another party’s loss. In general, distributive bargaining tends to be more competitive. This usually refers to the redistribution of income in the form of higher wages, higher bonuses, or higher financial benefits. Simply put; anything related to the transfer of money. This type of bargaining is also known as conjunctive bargaining.
2. Integrative Bargaining:
This involves the negotiation of an issue on which both the parties may gain, or at least neither party loses. Integrative bargaining is whereby both sides aim to benefit in what is seen as ‘win-win’ bargaining. For example, representatives of employer and employee sides may bargain over the better training programme or a better job evaluation method. In general, it tends to be more cooperative than distributive bargaining.
This type of bargaining is also known as cooperative bargaining.
3. Productivity Bargaining:
This type of bargaining is done by the management, where the workers are given the incentives or the bonus for the increased productivity. Productivity bargaining involves both parties negotiating around productivity and pay. So unions may suggest that higher salaries would boost productivity. Through this form of collective bargaining, both the employer and the employee enjoy the benefits in the form of increased production and the increased pay respectively.
4. Composite Bargaining:
In this type of collective bargaining, along with the demand for increased wages, the workers also express their concern over the working conditions, recruitment and training policies, environmental issues, mergers and amalgamations with other firms, pricing policies, etc. intending to safeguard their interest and protect the dilution of their powers.
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.
The procedure of Collective Bargaining:-
1. Preparation: At the very first step, both the representatives of each party prepares the negotiations to be carried out during the meeting. This may cover several areas that its members are most concerned with. It may include a survey of members or several focus groups.
Simply put, the trade union and negotiators look to find out the key points by which they are to negotiate on.
On the other hand, the union must gather adequate information regarding the financial position of the business along with its ability to pay and prepare a detailed report on the issues and the desires of the workers.
2. Discuss the terms and Conditions:-Both the parties decide the ground rules that will guide the negotiations and the prime negotiator is from the management team who will lead the discussion. Also, the issues for which the meeting is held, are identified at this stage.
3. Propose: Once a list of key items is highlighted by the union’s members, it compiles them down into an official document which is then passed onto the relevant party/parties. These are also known as ‘key demands’. At this stage, the chief negotiator begins the conversation with an opening statement and then both the parties put forth their initial demands.
4. Bargain: There maybe sit down meetings, emails, or phone calls whereby the details of a deal are discussed. The negotiation begins at this stage, where each party tries to win over the other. The negotiation can go for days until a final agreement is reached. Sometimes, both the parties reach an amicable solution soon, but at times to settle down the dispute the third party intervenes into the negotiation in the form of arbitration or adjudication.
5. Settlement: This is the final stage of the collective bargaining process, where both the parties agree on a common solution to the problem discussed so far. Hence, a mutual agreement is formed between the employee and the employer which is to be signed by each party to give the decision a universal acceptance.
Reference:
Labour and Industrial Laws by S.N. Misra
About the author –
This article is authored by Ushmeet Kaur Monga, 3rd year B.Com LL.B (H) student from Shri Ramswaroop Memorial University, Lucknow.
