23483542 Collective Bargaining

8/8/2019 23483542 Collective Bargaining

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COLLECTIVE

BARGAINING


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CONCEPT

Collective Bargaining is the technique that has beenadopted by unions & managements to reconcile theirconflicting interests. It is called collective because the

employees, as a group, select representatives to meet &discuss differences with the employer.

Collective bargaining is that arrangement where thewages components of remuneration & conditions ofemployment of workman are settled through a bargainbetween the employer & the workmen collectively

whether represented through their union or by some ofthem on behalf of all them.


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Origin

Collective bargaining has emerged throughout

the world, particularly in democratic countries,

as a major institutional mechanism for theresolution of conflict of interests between labour

& management.

Sidney & Beatrice Webb were the first to use

the term collective bargaining in 1891.

Subsequently , Samuel Gompers, the presidentof American Federation of Labour in USA

considered, collective bargaining


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DEFINITION

Michael Jucius Collective Bargaining refersto a process by which employers on the onehand & representatives of employees on the

other, attempt to arrive at agreementsconcerning the conditions under whichemployees will contribute & be compensated fortheir services.

Richardson Collective bargaining takesplace when a number of work-people enter intonegotiation as bargaining unit with an employeror group of employers with the object ofreaching an agreement on the conditions ofemployment of work-people.


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Encyclopedia of Social Sciences Collective

Bargaining is a process of discussion &

negotiation between two parties, one or both ofwhom is a group of persons acting in concert.

The resulting bargain is an understanding as to

the terms & conditions under which a continuing

service is to be performedMore specifically ,

collective bargaining is a procedure by whichemployers & a group of employees agree upon

the conditions of work.


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Nature of Collective bargaining

It is carried out on a collective as distinct from an individual basis. Thatis, collective bargaining is bargaining by groups of people.

In the bargaining process, the main actors are employees, employers &their associations.

The object of collective bargaining is rule making. i.e reaching anagreement by specifying the rules pertaining to employmentrelationship.

The main focus of these rules is on the terms & conditions ofemployment.

It is both device & a procedure used by wage earners to safeguard theirinterests; it is an institution or instrument of an industrial organization fordiscussion & negotiation between the two parties.

It is moreover a technique by which an attempt is made to reconcile theneeds & objectives of workers & employers & is therefore, an integralpart of an industrial society.

The essence of collective bargaining lies in the readiness of the twoparties to a dispute to reach an agreement or mutually satisfyingsettlement. It is concerned about the emotions of the people involved init as well as with the logic of their interest.


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Features of Collective

Bargaining.1. It is group action as opposed to individual action & is

initiated through representatives of workers.

2. It is flexible & mobile, & not fixed or static.

3. It is a two-party process.4. It is a continuous process.

5. It is dynamic & not static.

6. It is industrial democracy at work.

7. Collective bargaining is not a competitive process but is

essentially a complementary process.8. It is an art, an advanced form of human relations


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Importance of Collective

Bargaining Improvement in the Conditions of Workers Collective

bargaining has considerably helped in securing a widevariety of economic benefits for the workers in the form ofhigher wages, liberal allowances, fringe benefits,

economic security, shorter hours of work, better terms &conditions of employment & physical working conditions.Collective Bargaining has helped workers in gettingeconomic benefits & facilities,

Check on Autocracy in Industry During early years ofindustrialization, the employers unilaterally determinedthe terms & conditions of employment of their workers.Hiring & firing of workmen was considered theirprerogative. Collective bargaining has put an effectivecheck on employers autocracy in regard to the layingdown of terms & conditions of employment.

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3) Promotion of lasting industrial peace.- It has been seen that alasting solution to the problems in an industry can be possibleonly when the parties have a say in reaching decisions.Collective bargaining provides this opportunity. The employer

and workers are in the better position to understand andappreciate the problems and difficulties of each other.Collective bargaining enables the parties to settle theirdifferences or disputes based on facts and realities of thesituation.

4) Favorable to managerial efficiency Collective bargaining hasalso contributed towards improving managerial efficiency andsolution of specific problems facing the management.

5) Development of industrial Rules. Successful conclusion ofcollective bargaining and incorporation of the terms incollective agreement lead to establishment of rules orstandards to be observed by both the parties.

6) Significant for society and economy.


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NEED FOR COLLECTIVE

BARGAINING1. Collective Bargaining provides platform for

mgmt & employees which places them at parso far as negotiations are concerned.

Therefore, any outcome of the negotiation isperceived as mutually beneficial to each other& has better acceptability among them.

2. It is a pragmatic & democrative process forregulating the terms & conditions ofemployment in which employees feel a part ofdecision making process. This feelingdevelops better understanding among them,increases trust & mutuality of interests with theorganization.


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3. Because of development of betterunderstanding between employees & mgmt,collective bargaining may be used to adopt a

more flexible approach towards employmentconditions in dynamic environment.

4. Collective bargaining provides opportunity forspeedy implementation of decisions regardingterms of employment as both parties areinvolved in decision making process. Aparticipative decision making , particularly onissues of continuous nature, provides in-builtmechanism for implementation of decisions.


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Process of Collective

BargainingIn Collective bargaining process

following steps are involved-

1. Preparation for Negotiation.

2. Issues for Bargaining.

3. Negotiation.

4. Negotiated Agreement.5. Rectification of agreement.

6. Implementation of agreement.


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1. Preparation for Negotiation

Preparation for Negotiation in a collective bargaining is as importantas the negotiation process itself. Up to 83% of the outcomes of thenegotiations are influenced by pre-negotiation process. Suchpreparation is required both by mgmt as well as union. From mgmtside, pre-negotiation preparation is required as follows-

1. Mgmt should decide when to open the negotiation; sometimes, it isadvisable to open negotiation long before the expiry of previoussettlement while, other times, fre3ash negotiation may start after theexpiry of previous settlement. The mgmt must interpret the situationappropriately & make the decision.

2. Mgmt must decide the representatives to negotiate at the negotiationtable. These representatives should posses negotiating skills like,emotional balance, communicative & listening, flexible attitudes,

empathy & knowledge of the issues involved in the bargaining.3. There should be analysis of the impact of various decisions which

may emerge out of negotiations.

4. Draft for likely decisions should be prepared in advance so that finalagreement draft can be prepared as soon as the negotiation processis over.


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2. Issues for Bargaining

The 2nd step in bargaining process is the determination of issueswhich will be taken up for negotiation. Various issues which can besorted out through collective Bargaining fall into 4 categories-

1. Wage related issues- wage related issues include wage/salaryrevision, allowances for meeting increased cost of living like dearness

allowances, overtime rates, financial incentives schemes, bonus etc.2. Supplementary Economic Benefits- These include such issues as

pension plans, gratuity plans, paid vacations, paid holidays, lay-offpay, retrenchment compensation, health insurance plan etc.

3. Institutional issues- These issues include the determination of rights &duties of employers, employees & trade union with a view that eachgroup respects & protects the rights of others & performs its dutiesaccordingly.

4. Administrative Issues- These issues include determination ofseniority, basis of promotion, employee discipline & dischargeprocedure, grievances procedure, employee health & safetymeasures, work rules, job security & job changes, training,technological changes etc.


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3. Negotiation

When the first 2 steps are completed both partiesengage in actual negotiation process at a time & placefixed for the purpose. There are 3 types of negotiationprocess-

1. Haggling bargaining- This is the oldest procedure ofnegotiation between labour & mgmt. in this method 2approaches can be adopted; piecemeal approach &total approach. In piecemeal approach an issue can betaken, deliberated 7 decided without linking it toanother. In this way, all issues are decided. In totalapproach all the issues are discussed but the item-wisedecision is not arrived at, as no issues is settledindependently. Every issue is kept open until the wholenegotiating process is ready to crystallize into a totalagreement.


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2. Boulwarism- In this method the co. itself takes aninitiative to find out through comprehensive research &survey the needs of the employees. Based on theanalysis of findings, the co designs its own packagebased on the issues of bargaining. Thereafter, a changeis incorporated only when new facts are presented bythe employees or their unions.

3. Continuous bargaining -Continuous bargaining involvesparties to explore particular difficult bargaining problems

in joint meetings over the long period of time,sometimes throughout the life of each agreement.


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4. Negotiated Agreement

When 2 parties arrive at some mutually

acceptable agreement either at the initial

process or through overcomingnegotiation breakdown, the agreement is

entered into with a provision that the

agreement will be formalized after its

rectification by the respectiveorganizations.


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5. Rectification of Agreement

Rectification of negotiated agreement is requiredbecause the representatives of both the parties may nothave ultimate authority to decide various issues referredto for collective bargaining. The rectification of agreement

may be done by the appropriate managers authorized forthe purpose in the case of mgmt, trade union executive orall the employees in the case of employees.

The agreement is in written form indicating the variousissues settled . It usually consists of a preamble, a seriesof clauses & appendices giving details of items whereverrequired. It also includes the date from which it comesinto operation & the period for which it will remain inoperation, the mechanism of sorting out the differencesover the interpretation of clauses & signatories to theagreement.


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6. Implementation of

Agreement When the agreement is finalized, it

becomes operational from the date

indicated in the agreement. Theagreement must be implemented in

terms of its letters & sprit by both the

parties.


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CAUSES FOR FAILURE OF

COLLECTIVE BARGAINING1. Attitude of management

2. Legal Problems.

3. Political Interference

4. Problem with Unions.

5. Problems from Governments


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Employee Stock Option Plans

(ESOP) A plan established by a company whereby a certain

number of shares is reserved for purchase & issuance tokey employees. Such shares usually vest over a certainperiod of time to serve as an incentive for employees tobuild long term value for the company.

Many companies use employee stock option plans tocompensate , retain, & attract employees. These plansare contracts between a company & its employees thatgive employees the right to buu a specific number of the

cos shares at a fixed price within a certain period of time. Employees who are granted stock options hope to profit

by exercising their options at a higher price than whenthey were granted.

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23483542 Collective Bargaining