Collective Bargaining is a process in which representatives of two groups (employers and employees) meet and try to negotiate an agreement which specifies the nature of future relationship (pertaining to employment) between the two. According to Beach, “Collective Bargaining is concerned with the relations between unions representing employees and employers (or their representatives). It involves the process of union organization of employees; negotiation, administration and interpretation of collective agreements covering wages, hours of work and other conditions of employment; engaging in concerted economic action; and dispute settlement procedures.”
Subjective matter of Collective Bargaining
The subject matter of collective bargaining covers a variety of issues affecting employment relationships between the workers and the management. According to Ghosh and Nath the issues covered in the collective bargaining are recognition of union or unions, wages and allowances, hours of work, leave and festival holidays, bonus and profit sharing schemes, seniority, rationalization and the issues relating to the fixation of workloads, and standard labor force, programmes of planning and development influencing workforce, issues relating to retrenchment and lay off, victimization for trade union activities, provident fund, gratuity and other retirement benefit schemes, incentive systems, housing and transport facilities, issues relating to discipline and shop rules, grievance procedure, working conditions and issues related to safety and accident prevention, occupational diseases and protective clothing, employee benefits such as canteens, rest rooms, medical and health services and creches, administration of welfare funds, cooperative thrift and credit societies and educational, recreational and training schemes.
The Indian Institute of Personnel Management, gives the following as the subject matter of collective bargaining:
- Purpose of the agreement, its scope and the definition of important terms;
- Rights and responsibilities of the management and of the trade union;
- Wages, bonus, production norms, leave, retirement benefits and terms and conditions of service;
- Grievance redressal procedure;
- Methods and machinery for the settlement of possible future disputes; and
- Termination clause.
Importance of Collective Bargaining
Collective Bargaining not only includes negotiation, administration and enforcement of the written contracts between the employees and the employers, but also includes the process of resolving labor-management conflicts. Thus, collective bargaining is a legally and socially sanctioned way of regulating in the public interest the forces of power and influence inherent in organized labor and management groups.
1. Importance to Employees
Collective Bargaining helps the employees:
- To develop a sense of self-respect and responsibility among the employees.
- To increase the strength of the workers. Their bargaining capacity as a group increases.
- To increase the morale and productivity of employees.
- To restrict management’s freedom for arbitrary action against the employees. Unilateral actions by the management are discouraged.
- To strengthen the trade union movement.
2. Importance to Employers
- The workers feel motivated as they can talk to the employers on various matters and bargain for higher benefits. As a result, their productivity increases.
- It is easier for the management to resolve issues at the bargaining table rather than taking up complaints of employees individually.
- Collective bargaining promotes a sense of job security among the employees and thereby tends to reduce cost of labor turnover to management, employees as well as the society at large.
- Collective bargaining opens up the channels of communications between the top and bottom levels of organization which may be difficult otherwise.
3. Importance to Society
Collective Bargaining helps the society:
- To attain industrial peace in the country.
- To establish a harmonious industrial climate which supports the pace of a nation’s efforts towards economic and social development since the obstacles to such development can be largely eliminated or reduced. As a vehicle of industrial peace or harmony, collective bargaining has no equal.
- To extend the democratic principle from the political to the industrial field. It builds up a system of industrial jurisprudence by introducing civil rights in industry and ensures that management is conducted by rules rather than by arbitrary decisions.
- To check the exploitation of workers by the management.
- To distribute equitably the benefits derived from industry among all the participants including the employees, the unions, the management, the customers, the suppliers and the public.
Credit: Industrial Relations Management Notes-MGU