The company R.K. Brewery Limited implemented a new performance-based salary scheme in 2008 that increased productivity by 30% but also caused salaries to increase for only 80% of employees. The trade union membership declined to 45% by 2009 due to salary differences among employees. In 2010, as the collective agreement was set to expire, the trade union requested a collective bargaining meeting with management to address salary differentials causing social issues among employees. The HR manager discussed the issue with senior management and decided to negotiate salaries, benefits and other issues individually with employees rather than through collective bargaining as before.

1. COLLECTIVE BARGAINING ;
CASE STUDY

2. 2nd Group
• Sainudeen S
• Shintu M Mathew
• Shakkeel S Rahman
• Sreejith
• Jincy George
• Swathi
• Archana Premnadh
• Liji Alex
• Sheeja Mamachan
• Muhammed Sajid N

3. Summary
• R.K.Brewery limited produces four varieties of beer as well as
mineral water.
• The company entered a collective agreement with the trade
union in 2005 which would be in force for five years up to the
end of 2010.
• There was a collective agreement with a fixed salary for a
group of employees performing the same job.
• Mr.Vinod Michael joined R.K.Brewary as chief HR manager in
2007.
• He analysed the agreement and felt that to enhance the
productivity beyond the current level, performance based
salaries with a base line should be adopted.

4. Cont….
• The CEO accepted the idea reluctantly as the trade union may
create problems.
• Mr.Vinod implemented the scheme in 2008.
• The scheme worked beyond expectation,as the productivity
increased by 30% in addition to improvement in quality and
delivery schedule.The salaries of 80% employees increased by 20%
to 30% and surprisingly the membership of trade union declined to
around 45% by 2009.
• In the view of expiry of collective agreement ,on 31st dec 2010 trade
union requested management to arrange a collective bargaining
meeting as they were worried for salary differential causing social
problem among employees and their family members.

5. Cont…
• Mr.Vinod discussed the issue with the ceo and senior level
managers in a meeting.There were mixed arguments and
responses in the meeting.
• Finally Mr.Vinod took a decision of implementing bargaining
or negotiations with individual employees regarding
salaries,benefits,working conditions and all other issues of
HR.

6. Theorotical framework
Collective bargaining
Collective bargaining is a process of
negotiation between employees and a group of
employers aimed at agreements to regulate working
salaries.The interest of the employees are commonly
presented by repreentatives of a trade union to
which the employees belong.The collective
agreements reached by these negotiations usually
set out wage scales ,working hours,training,health
and safety,overtime,grievence mechanisms and
rights to participate in workplace or company affairs.

7. The union may negotiate with a single employer or
may negotiate with a group of
busineses,depending on the country,to reach an
indutry wide agreement.A collective agreement
functions as a labour contract between an
employer and one or more unions.Collective
bargaining conisis of the process of negotiation
between repreentatives of a union and
employers in respect of the terms and conditions
of employment of employees, such as
wages,hours of work,working conditions etc…

8. Statement of the problem
• Sudden change in the policies of the company.
• Encounter from trade union.
• Keeping trade union away may cause issue in
the future.

9. Solutions
1.Its better to keep a friendly treaty
with the trade union so as to remove
a future encounter from there part.

10. SWOT
• STRENGTH
1.A support from the trade unions will build up a
political as well as legal strength within the
society.
2.Unexpected strikes and protest from the
employees won’t be there.

11. Cont…
• WEAKNESS
Overinfluence of trade union can cause negetive
impacts to the business and company policies.

12. Cont…
• Opportunity
A good relationship among the trade union may
result in the betterment of the employees ,
there by increasing salary and job
opportunities.

13. Cont…
• THREAT
Trade union may over command there demands
and make the company force to accept it at
any circumstances.

14. 1.Why did Mr.Vinod take such a
decision deviating from the
established practice of collective
bargaining and collective
agreements?

15. • Vinod analysed the collective agreement with a fixed salary of
group of employees performing the same job.He felt that it
would be difficult to enhance the productivity beyond the
current level,though competition demands increase in
productivity atleast 25%, in addition to improvement in a
quality and delivery scheduled.
• Vinod also felt that there is no need for collective bargaining
meeting as well as collective agreement as the salaries and
benefits are based on individuals performance of employees.

16. 2. What would be the
possible reaction and
response from the trade
union?

17. • Monetary motivation for any worker Is very important,if it
is in his favor.But here salaries of only 80% employees were
increased by 20% to 30% and surpriingly the membership
of trade union declined to around 45% by 2009.
• Thus trade union were worried about increase in salary of
remaining 20% employees and majority of its
members.Also it caused social problems among the
employees and their family members.They requested the
management to make an arrangement for collective
bargaining meeting and arrive at new agreement during the
2nd week of January 2009,in the view of expiry of collective
agreement by 31st december 2010.

18. THANK YOU………