Let’s break down the word ‘collective bargaining’, wherein the term ‘collective’ is owing to the involvement of two parties [employer and employees], who take positions as ‘groups’ as opposed to individuals, while ‘bargaining’ involves negotiations prior to reaching an agreement and shall involve proposals and counter-proposals when striking an offer or counter-offer.
How Collective Bargaining Works?
When management people and employees communicate with each other for reaching an agreement it can be said as an outcome of collective bargaining. Most people think of collective bargaining in industrial relations is the process in which union members of the employees talk with employers for getting benefits. However collective bargaining is the process through which a conclusion is reached regarding wages of employees, working hours of employees, and working conditions at the company.
Trade Unions have been regularly criticized for creating strife within the workplace environment fighting workmen compensation as the concept of Collective Bargaining has been termed as a continuous strategic process in determining terms and conditions of employment where management and employees participate at a workplace to oversee establishing stable relationships and was primarily developed as an alternative to ad-hoc on the basis of an agreement with the employees related to managing discipline and employee claims.
Collective Bargaining Steps
The process of collective bargaining in industrial relations involves several steps, such as negotiation and agreement, underscoring the significance of collective bargaining in promoting fair labor practices and protecting workers’ rights.
Preparation:
In the preparation stage, a bargaining committee is formed by employees and they will collect the list of issues which need to be addressed. Then, the employee committee will discuss the bargaining strategies.
Negotiation:
The negotiation stage begins with a meeting between representatives of both parties. The member of the employee union presents their demands to the employer representatives and they may present counter proposals.
Conciliation:
Sometimes a mediator or a conciliator may be required to resolve disagreements between two parties. In such a case, a third party can get involved in the discussion and help both parties reach an agreement.
Tentative Agreement:
When a tentative agreement is reached between the parties, each group reviews it and seeks opinions from their members.
Ratification:
In the next stage, the union members are asked to cast their votes by a secret ballot and the majority vote determines whether the agreement is accepted or rejected.
Forming the agreement: The last step is formation of Collective Bargaining Agreement (CBA) specifying all the agreed terms and conditions. Then the contract is implemented.
Types of Collective Bargaining
There are mainly four types of collective bargaining, each playing a crucial role in promoting worker rights and highlighting the significance of collective bargaining in achieving fair labor agreements.
1. Distributive Bargaining
In this type of bargaining, one party’s gain will be another party’s loss. It uses a competitive bargaining strategy.
For example, a used bike sale involves two different parties, one is a buyer and the other is a seller. In this case, each person has different interests and thoughts. while the seller wants to sell the bike at a profitable cost, but the buyer seeks to pay the least amount of money possible.
2. Integrative Bargaining
Integrative Bargaining is also called interest-based bargaining, a negotiation strategy for finding a win-win solution to their dispute. Here both the parties may gain or at least neither party loses. It can boost the professional relationship
eg. Better training programs
3. Attitudinal Structuring
When there is a backlog of bitterness between both parties, then attitudinal structuring is required to make smooth industrial relations. It can shape/reshape attitudes to positive and cooperative manner
eg: Shaping the attitude from non-cooperative to cooperative/un-trust to trust
4. Intra-Organisational Bargaining
This bargaining refers to the internal negotiation that occurs within respective organizations. It takes place away from the bargaining table. There can be conflicting groups in both management & union. So there is a need to achieve consensus in these groups
Importance of Collective Bargaining in Industrial Relations
Now let’s learn about the importance of collective bargaining in industrial relations. Collective bargaining fosters collaboration and ensures workplace harmony. It helps to reduce conflicts and contributes to overall success of an industry/organization.
Industrial relations is an essential component of labor administration and involves procedures, attitudes, and behavior which underpins how employers, unions, employees interact with each other at the workplace to affect the eventual outcome.
Therefore, industrial relations remain a critical driver of organizational success. Numerous published research studies argue that ‘good industrial relations,’ including the importance of collective bargaining, translate into robust organizational performance, reduced absenteeism, increased efficiency, higher productivity, and an innovative environment that fosters employee loyalty and trust.
While in the event of an industrial conflict between employers and employees, shall demand collective consultation, negotiation, and a framework that creates mutual respect and understanding in dealing with industrial issues such as strikes and lockouts. It is fair to state that a legal process would stimulate collective bargaining to bring harmony, peace, discipline as stable industrial relations are the key to the economic growth and social development of nations.
Globally managing human resources involves fostering understanding and addressing disagreements through dialogue and interactions. The significance of collective bargaining lies in its ability to build bridges and resolve differences, minimizing the need for outside influence or intervention.
Westford University College offers an MBA in Human Resource Management and Organizational Psychology. That will give you a better understanding of managing human resources and industrial relational structure. This program will help to increase your global ability and managerial skills.
FAQ
What are the advantages of collective bargaining?
Some of the advantages of collective bargaining include higher power of negotiation for employee wages and other benefits, fair work policies, better work environment, improved job security, etc
What are the disadvantages of collective bargaining?
Some of the potential disadvantages of collective bargaining include possibility of conflicts, strikes, increased costs, reduced productivity, mistrust, etc.
What are the main objectives of collective bargaining?
The main objectives of collective bargaining involve ensuring good working conditions, job security, fair wages & benefits, resolving conflicts, etc.
Is collective bargaining illegal?
No, collective bargaining is not illegal as it helps to protect employee rights through negotiations for better wages, working conditions and other employment benefits.
What is the scope of collective bargaining?
The scope of collective bargaining encompasses negotiation for better working conditions, job security, wages & benefits, employee rights & grievances, etc.
What is the goal of collective bargaining?
The major goal of collective bargaining is to arrive at a mutually acceptable agreement between employees and employers ensuring fair pay, good working conditions & supportive work environment.
