Collective Bargaining – Definition, Features and Process

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.

Collective Bargaining

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.

The main characteristics of collective bargaining are:

  • Collective Process: The representatives of both the management and the employees participate in it. Employer is represented by its delegates and on the other side employees are represented by their trade union. Both the groups sit together at the negotiating table and reach at some agreement acceptable to both.
  • Continuous Process: It is a continuous process. It does not commence with negotiations and end with an agreement. It establishes regular and stable relationship between the parties involved. It involves not only the negotiation of the contract, but also the administration or application of the contract also.It is a process that goes on for 365 days of the year.
  • Flexible and Mobile: It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for compromise. A spirit of give-and-take works unless final agreement acceptable to both the parties is reached.
  • Bipartite Process:Collective bargaining is a two party process. Both the parties—employers and employees—collectively take some action. There is no intervention of any third party. It is mutual give – and –take rather than a take-it-or-leave it method of arriving at the settlement of a dispute.
  • Dynamic: Collective bargaining is a dynamic process because the way agreements are arrived at, the way they are implemented, the mental make-up of parties involved keeps changing. As a result, the concept itself changes, grows and expands overtime. It is scientific, factual and systematic.
  • Industrial Democracy: It is based on the principle of industrial democracy where the labor union represents the workers in negotiations with the employer or employers. It is a joint formulation of company policy on all matters affecting the labor.
  • Complementary Process: Collective bargaining is essentially a complementary process, i.e., each party needs something which the other party has, namely, labor can put greater productive effort and management has the capacity to pay for that effort and to organize  and guide it for achieving the organizational objectives.
  • It is an Art: Collective bargaining is an art , an advanced form of human relations.
  • Discipline in Industry: Collective bargaining is an attempt in achieving and maintaining discipline in the industry.
  • Industrial Juris prudence: It is an effective step in promoting industrial jurisprudence.

Steps in the Collective Bargaining Process

There are three distinct steps in the process of collective bargaining ; (1) the creation of the trade agreement, (2) the interpretation of the agreement, and (3) the enforcement of the agreement. Each of these steps has its particular character and him, and therefore, each requires a special kind of intellectual and moral activity and machinery.

1. The Creation of the Trade Agreement

In negotiating the contract, trade unions representatives and management present their demands to each other, compromise their differences, and agree on the conditions under which the workers are to be employed for the duration of the contract. The coverage of collective bargaining is very uneven; in some industries almost all the workers are under agreement, while in others only a small portion of the employees of the firms are covered by the agreement.

The negotiating process is the part of collective bargaining more likely to make headline news and attract public attention; wage increases are announced, ominous predictions about price increases are reduction in employment are made. And it is in the negotiating process that strikes and threats of strikes are most liable to occur, particular strikes which shut down an entire industry.

2. The Interpretation of the Agreement

The administrative process is the day-to-day application of the provisions of the contract to the work situation. At the time of writing the contract, it is impossible to foresee all the special problems which will arise in applying its provisions. Sometimes, it is a matter of differing interpretations of specific clause in the contract, sometimes, it is a question of whether the dispute is even covered by the contract. Nevertheless, each case must somehow be settled. The spirit of the contract should not be violated. The methods that management and the union pointly adopt for this purpose constitute the administrative process.

3. Enforcement of the Agreement

Proper and timely enforcement of the contract is very essential for the success of collective bargaining. If a contract is enforced in such way that it reduces or nullifies the benefits expected by the parties, it will defeat basic purpose of collective bargaining. It may give rise to fresh industrial disputes. Hence, in the enforcement of the contract the spirit of the contract should not be violated.

However, new contracts may be written to meet the problems involved in the previous contract. Furthermore, as day-to-day problems are solved, they set precedents for handling similar problems in future. Such precedents are almost as important as the contract in controlling the working conditions. In short, collective bargaining is not an on-and-off relationship that is kept in cold storage except when new contracts are drafted. Rather it is continuously, going relationship that takes on new dimensions each day.

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