Functions of Collective Bargaining

Good relations between the employer and employees are essential for the success of an industry. In order to maintain good industrial relations, it is necessary that industrial disputes are settled quickly and amicably. One of the efficient means of resolving industrial disputes and deciding the employment conditions is collective bargaining. It is a process in which the representatives of the employer and of the employees meet and attempt to negotiate a contract governing the employer-employee union relationship.

Collective bargaining is a technique of social change, some-times performing its function smoothly and at other times threatening to blow up. Arthur D Butler’s classification of functions of collective bargaining can be viewed under the following three headings.

  1. Collective bargaining acts as a technique of long-run social change, bringing rearrangements in power hierarchy of competing groups.
  2. Collective bargaining serves as peace treaty between two parties in continual conflict.
  3. Collective bargaining establishes a system of industrial jurisprudence, defining the rights and duties of the conflicting parties.

1. Long Term Social Change 

Collective bargaining, in its broader aspects, is not confined solely to economic relations between employers and employees. Selig Perlman has defined it as a “technique whereby an inferior social class or group carries on a never slacking pressure for a bigger share in social sovereignty as well as for more welfare, security, and liberty for its individual member. Collective bargaining manifests itself equally in politics, legislation, court litigation, government administration, religion education and propaganda. When viewed as a process of social change, collective bargaining encompasses more than the direct clash between employers and trade unions. It refers to the rise in political and social power achieved by workers and their organization.

Thus collective bargaining is not an abstract class struggle in a Marxian sense, but it is rather pragmatic and concrete. The inferior class does not attempt to abolish the old ruling class, but merely to become equal with it. It aims to acquire a large measure of economic and political control over crucial decisions in the area of its most immediate interest and to be recognized in other areas of decision making.

Collective bargaining has no final form. It adapt- itself to the changing social, legal and economic environment. It has varied considerably from plant to plant and industry to industry, and also between and within unions. For example, a number of industrial unions have successfully bargained for higher bonus and Provident Fund benefit, why many unions in the construction industry have ignored these goals. Bargaining in some plants is characterized by comparatively frequent strikes, whereas in other plants there are long records of uninterrupted industrial peace.

Wage corners have enhanced their social and economic position in absolute terms and in relation to other groups and at same time, management has retained a large measure of power and dignity. These gains were not registered in one great revolutionary change, but rather step by step, with each clash between the apposing parties settled with a new compromise somewhat different from the previous settlement. In short, collective bargaining accomplishes long-run stability on the basis of day-to-day adjustments in relation between labor and management.

2. Temporary Truce 

Collective bargaining may be viewed as a struggle between two opposing forces with the outcome depending on their relative strength. The inherent strength of each side is its ability to withstand a strike. This is partly an economic matter: To what extent can the union provide financial aid to the strikers? Can the workers find temporary jobs? How much will the employers sales be reduced? Will his position in the product market be permanently impaired? These are the economic factors on which the ability to withstand a strike depends. The ability to withstand a strike also depends on such non-economic factors as the loyalty of the workers to the union, their willingness to make personnel sacrifice to support its goals. The degree of loyalty, of course, is affected by the presence of factionalism within the union. For either the employer or the union, a belief that some basic principle is at stake, e.g. management right or union security, stiffens the will power of the antagonists. The compromise, then, is a temporary truce with neither side being completely satisfied with the results. Each would like to modify it at the earliest opportunity. Since the contract is always of limited duration, each begins immediately to prepare a new list of demands, including previously unsatisfied demands, and to build up its bargaining strength in anticipation of the next power skirmish.

3. Industrial Jurisprudence 

Collective bargaining creates a system of industrial jurisprudence. It is a method of introducing civil rights into industry, that is of requiring that management be conducted by rule rather than by arbitrary decisions. It establishes rules which define and restrict the traditional authority exercised by employers over their employees, placing part of the authority under joint control by union and management. Finally collective bargaining must never stagnate if it is to serve its role of adapting labor and management institutions, and their relative power positions, to the changing socioeconomic environment.

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]

2 Comments

  1. How can workers solve their grievances in industrial workplace?

    • Effective dispute resolution can help employers to maintain good relationships with their employees by dealing with workplace issues at an early stage. Employees need to know that their grievances will be taken seriously by an employer. There are now a range of methods for resolving disputes concerning the terms and conditions of employment agreements. These include grievance procedures, mediation, negotiation, conciliation and arbitration.

      Grievances may be solved at the workplace; negotiation can be effective when third parties such as unions and the employment advocate are involved during collective or individual bargaining. In recent times, grievances have been resolved internally, with an increase in human resource departments, staff trained in recruitment, training and paying staff, as well as experts in conflict resolution. When grievances can’t be resolved in the workplace, mediation – where a neutral third party helps employers and employees reach agreement – can resolve issues.

      Disputes over wages and conditions were resolved or prevented by a system of conciliation and arbitration. This system involved an independent arbitrator that used the law to try to find a satisfactory compromise or outcome for the parties to a dispute that usually involved unions in disagreement with employers.

      The consistent reminder to all involved in conflict resolution should be — ‘be resolution focused’. There is the danger that an attempt to resolve conflict can be used as a means to create more conflict. The parties must be called to order and their motives and motivations consistently scrutinized.

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