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Collective bargening

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Collective bargening

  1. 1. evangelist.student@gmail.com
  2. 2. • Collective bargaining 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.• It is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation.• ILO has defined collective bargaining as, negotiation about working conditions and terms of employment between an employer and a group of employees or one or more employee, organization with a view to reaching an agreement wherein the terms serve as a code of defining the rights and obligations of each party in their employment/industrial relations with one another
  3. 3. • Collective bargaining involves discussions and negotiations between two groups as to the terms and conditions of employment.• It is called ‘collective’ because both the employer and the employee act as a group rather than as individuals.• It is known as ‘bargaining’ because the method of reaching an agreement involves proposals and counter proposals, offers and counter offers and other negotiations
  4. 4. Thus collective bargaining:• is a collective process in which representatives of both the management and employees participate.• is a continuous process which aims at establishing stable relationships between the parties involved.• not only involves the bargaining agreement, but also involves the implementation of such an agreement.• attempts in achieving discipline in the industry• is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations
  5. 5. Main Features:• Collective bargaining is a group action• Collective bargaining is an art.• Collective bargaining is a complementary and not competitive process.• It’s a continuous and logical process.• It’s a step towards industrial democracy: working together, thinking together and deciding together.• It’s a Bipartite process.
  6. 6. Scope of Collective Bargaining• The scope of collective bargaining is very wide. Any matter defining the relationship between the management and workers may form a part of it.• Broadly two type of issues/items may involved in collective bargaining.• Economic Provision: includes those provision which affects the economic, financial, and professional aspect of workers.(working conditions, rules and regulations)• Political provisions or issues: these provisions relates to the general administration such as division of authority and Responsibility, workers participation in management and power to challenge the decision taken by management.
  7. 7. Others items being a part of collective Bargaining• Allowance and leave rules• Wage and salary structure• Wage incentive scheme• Lay off and retrenchment of workers• Demotion, promotion transfer• Grievances procedure• Safety and health facilities• Scheme of bonus, profit sharing and co partnership• Maintenance of discipline• System of performance appraisal• Labour welfare schemes• Schemes of social security• Medical and compensation schemes.
  8. 8. Different aspects of collective bargaining• The concept of collective bargaining need to understood in its proper perspectives.• There is a transformation in the process• Earlier it was mainly focus on wages and working condition however in recent times the process of bargaining is extended to almost every area involving employer-employee relation i.e. incentive payment, job security, job security, staff transfer, promotion etc.• To understand collective bargaining one require following aspects1. Parties to collective bargaining2. Subject matter of collective bargaining3. Objective of collective bargaining4. Duration of collective bargaining
  9. 9. • Parties to collective bargaining; CB is a bipartite agreement which involves two parties.• Management or employer association and workers represented by trade union or worker federation on the other hand.• Both these parties directly involved in the process.• Subject Matter of Collective Bargaining:1. Setting out standards for employment: like determination of wage, fixing working hour etc.2. Regulating the employer-employee relation: provision for enforcement of collective bargaining, recognition of union, methods of settling industrial disputes, procedure of negotiations, giving the preference to union members in recruitment, an undertaking of not to resort on strike or lock out during the period. Etc.
  10. 10. • Objectives of collective bargaining: the prime objective is to maintain co-ordial relationship between management and workers and to settle dispute relating to wage and working condition.• It aims to safeguard the interest of workers through collective action• To ensure participation in trade union in industry.• To introduce effective grievance handling procedure.• Duration and issues involved in collective bargaining: it refer for which the collective bargaining agreement remain effective.• There is a general tendency , on the part of union to have agreement of short duration
  11. 11. Types of Collective Bargaining• Collective bargaining is a positive give and take between workers and employers.• Distributive Bargaining: straight art of bargaining haggling over the distribution of amount. It covers issues like wages, salary, bonus etc.• Attitudinal Bargaining : here all negotiations efforts are being done to change the thinking, approach and attitude of both management and the employee union. So here the attitude of both the parties are shaped and reshaped.• Integrative Bargaining: there may be some issue in the organization on which both management and employees are equally interested or being benefitted.• Inter-organizational Bargaining: It generally aims at resolving internal conflicts. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be
  12. 12. Function of Collective Bargaining• Collective bargaining is a process of decision making and mechanism for belonging the power between the employer and employee.• Working together, sharing together, deciding together and earning together.• It helps to promote the cooperation and mutual understanding between workers and management.• It establish uniform condition for employment• It promote stability and prosperity• It increase the economic strength of employee and management.• Provide fair rate of wages and amenities for workers.• Promote prompt redressal of grievances• It provide a solution to industrial sickness.• It provide new methods of employment regulatory condition.
  13. 13. Arthur D Butler’s classification of functions of collective Bargaining. As a process of social change: it attempt to re arrange the economic relation between employer and employee As a process of peace treaty: settlement between the two conflicting parties is basically a compromise brought out by the collective bargaining process. Compromise represent a state to which each side is prepared to descend from original strand. As a system of Industrial jurisprudence:• CB brings civil rights in to industry.It’s a rule making process that formulates terms and condition for employment.• its a executive process as the labour trade union share the collective responsibility,• its also a judicial process which provide interpretation of agreement by the court.
  14. 14. PROCESS OF COLLECTIVE BARGAINING• Collective bargaining consists of negotiations between an employer and a group of employees that determine the conditions of employment.• Often employees are represented in the bargaining by a union or other labor organization.• The result of collective bargaining procedure is called the collective bargaining agreement (CBA).• Collective agreements may be in the form of procedural agreements or substantive agreements.
  15. 15. • Procedural agreements deal with the relationship between workers and management and the procedures to be adopted for resolving individual or group disputes.• This will normally include procedures in respect of individual grievances, disputes and discipline.• Frequently, procedural agreements are put into the company rule book which provides information on the overall terms and conditions of employment and codes of behavior.• A substantive agreement deals with specific issues, such as basic pay, overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc.• In many companies, agreements have a fixed time scale and a collective bargaining process will review the procedural agreement when negotiations take place on pay and conditions of employment
  16. 16. • It’s a continuous process• The process start when the workers puts the charter of demand through their trade union to the management• Normally a fresh charter is submitted at the expiry of existing agreement which continue till a new agreement is signed and enforced.1. PREPARE FOR NEGOTIATION2. TO DECIDE THE SOURCE FOR COLLECTING INFORMATION AND DATA3. IDENTIFICATION OF ISSUE ,PROBLEM AND OBJECTIVES TO BE DISCUSSED AND DECIDED.4. IDENTIFICATION OF NEGOTIATING TEAM5. DECIDING THE NEGOTIATION PROCEDURE TO BE FOLLOWED6. ENTERING INTO LABOUR MANAGEMENT AGREEMENT7. FOLLOW UP ACTION.
  17. 17. FOLLOW UP s ve c es i o ct Pr lle ng l Co ni de ai Mo rg Ba
  18. 18.  Prepare• This phase involves composition of a negotiation team.• The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation.• In this phase both the employer’s representatives and the union examine their own situation in order to develop the issues that they believe will be most important.• The first thing to be done is to determine whether there is actually any reason to negotiate at all.• A correct understanding of the main issues to be covered and intimate knowledge of operations, working conditions, production norms and other relevant conditions is required.
  19. 19.  Discuss:• Here, the parties decide the ground rules that will guide the negotiations.• A process well begun is half done and this is no less true in case of collective bargaining.• An environment of mutual trust and understanding is also created so that the collective bargaining agreement would be reached. Propose:• This phase involves the initial opening statements and the possible options that exist to resolve them.• In a word, this phase could be described as ‘brainstorming’.• The exchange of messages takes place and opinion of both the parties is sought.
  20. 20.  Bargain:• negotiations are easy if a problem solving attitude is adopted.• This stage comprises the time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place. Settlement:• Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue.• This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.
  21. 21. Essential conditions for success of collective bargaining• Collective bargaining can succeed only when the management and trade union realize their responsibilities.• There should be willingness of give and take for both the parties.• Existence of an organized and fully recognized trade union.• CB is possible only in the an atmosphere of mutual trust and recognition.• There must be a maturity of leadership from both sides.• The negotiator must have a problem solving and positive attitude• Intelligent collective bargaining specialized training of the negotiators.
  22. 22. Theories of collective bargaining• A number of bargaining models have their roots in social psychology• Some theories or models range from descriptions of what occurs at the bargaining tables to complex theories that make extensive use of mathematical and economic models
  23. 23. • Walton and McKersie Theory• Walton and McKersie4 view collective bargaining as four sub- processes – distributive bargaining, integrative bargaining, attitudinal structuring, and intra-organisational bargaining.• Distributive bargaining applies to situations in which union and management goals are in conflict.• Integrative bargaining, on the other hand, refers to bargaining issues that are not necessarily in conflict with those of the other party.• Attitudinal structuring is the means by which bargaining parties cultivate friendliness,trust, respect, and cooperation.• The final sub-process in Walton and Mckersie’sTheory is intra- organisational bargaining wherein the focus is on interaction between the union and management.• These four sub-processes interact to help shape the final outcome of collective negotiations as well as the long-term relationship between union and management.
  24. 24. • Bargaining range theory has its roots with the late Professor A.C. Pigou. Pigou’s• bargaining range theory explains the process by which labour and management establish upper and lower wage limits within which a final settlement is made.• The Union’s upper limit represents the union’s ideal wage. Management will offer a wage that is well below that acceptable to the union.• From these two extremes, the union and management teams will normally proceed through a series of proposals and counter proposals.• The union will gradually reduce its wage demands while the employer will raise its wages offer.• Both sides, however, have established limits as to how far they are willing to concede, and in the process establish a sticking point.• According to this theory, the exact settlement point will depend on the bargaining skills and strengths of the union and management negotiators
  25. 25. • Chamberlain’s model focuses upon the determinants of bargaining power and the ways in which changes in these determinants lead to settlement in the majority of collective bargaining situations.• Chamberlain defines bargaining power as the ability to secure your opponent’s agreement to your terms.• Thus a union’s bargaining power can be defined as management’s willingness to agree to the union’s terms or demands.• But what determines the willingness (or unwillingness) of management to agree to the union’s terms? The answer, according to Chamberlain, depends upon how costly disagreeing will be relative to how costly agreeing will be. That is:• Union’s bargaining power (UBP) = management’s perceived cost of disagreeing with the union’s terms (MCD)/management’s perceived cost of agreeing with the union’s terms (MCA)
  26. 26. • If management estimates that it is more costly to agree than to disagree (that is, if the union’s bargaining power is less than one), management will choose to disagree and thereby reject the union’s terms.• If, however, management judges that it is more costly to disagree than to agree (that is, if the union’s bargaining power is greater than one), management will choose to agree.• Management’s bargaining power can be similarly defined:• bargaining power (MBP) = union’s perceived cost of disagreeing Management’s with management’s terms (UCD)/union’s perceived cost of agreeing with management’s terms (UCA)
  27. 27. • Hicks Bargaining Model: focuses on the length and costs of work stoppages. Hicks proposed that union and management negotiators balance the costs and benefits of a work stoppage when making concessions at the bargaining table.• Each side makes concessions to avoid a work stoppage. The central idea is that there is a functional relation between the wage that one or the other party will accept and the length of strike that would be necessary to establish that wage.• There is a particular wage that the employer would prefer if the union were not in the picture.• He will concede more, however, in order to avoid a strike and up to a point, his concessions will rise with the length of strike he anticipates.• A primary difference between the Hicks model and bargaining range theory is that the Hicks model pinpoints a precise wage settlement while the range theory does not.

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