Theories of Collective Bargaining

Collective bargaining is process of joint decision making and basically represents a democratic way of life in industry. It is the process of negotiation between firm’s and workers’ representatives for the purpose of establishing mutually agreeable conditions of employment. Collective bargaining is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion and negotiation.

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

There are three important theories of collective bargaining which have been discussed as follows:

1. The Marketing Concept and the Agreement as a Contract

The marketing concept views collective bargaining as a contract for the sale of labor It is a market or exchange relationship and is justified on the ground that it gives assurance of voice on the part of the organized workers in the matter of sale. The same objective rules which apply to the construction of all commercial contracts, are invoked since the union-management relationship is concerned as a commercial one.

According to this theory, employees sell their individual labor only on terms collectively determined on the basis of contract which has been made through the process of collective bargaining. Thus, collective bargaining remains a means for employees to sell their manpower through a common agent.

The uncertainty of trade cycles, the spirit of mass production and competition for jobs make bargain a necessity. The trade union’s collective action provided strength to the individual laborer. It enabled him to resist the pressure of circumstances in which he was placed and to face an unbalanced and disadvantageous situation created by the employer. The object of trade union policy through all the maze of conflicting and obscure regulations has been to give to each individual worker something of the indispensability of labor as a whole. This is also called the union approach to collective bargaining.

It can not be said whether the workers attained a bargaining equality with employers. But, collective bargaining had given a new relationship under which it is difficult for the employer to dispense without facing the relatively bigger collective strength.

2. The Governmental Concept and the Agreement as Law

The Governmental Concept views collective bargaining as a constitutional system in industry. It is a political relationship. The union shares sovereignty with management over the workers and, as their representative, uses that power in their interests. The application of the agreement is governed by a weighing of the relation of the provisions of the agreement to the needs and ethics of the particular case.

Thus, the Governmental concept/theory establishes a political relationship admitting the contractual nature of the bargaining relationship. The contract is viewed as a constitution, written by the point conference of union and management representatives in the form of a compromise or trade agreement. The agreement lays down the machinery for making executing and interpreting the laws for the industry. The right of initiative is circumscribed within a framework of legislation. Whenever, management fails to conform with the agreement of constitutional requirements, a judicial machinery is provided by the grievance procedure and arbitration. This creates a joint Industrial Government where the unions share sovereignty with management over the workers and defend their group affairs and joint autonomy from external interference.

3. The Industrial Relations (managerial) Concept at Jointly Decided Directives

The industrial relations concept views collective bargaining a system of industrial governance. It is a functional relationship. Group Government substitutes the State Government. The union representatives get a hand in the managerial role. Discussions take place in good faith and agreements are arrived at. joins with company officials in reaching decisions on matters in which both have vital interests. Thus, union representatives and the management meet each other to arrive at a mutual agreement which they can not do alone. When the terms of agreement fail to provide the expected guidance to the parties, it is the joint objective and, not the terms, which must control. Hence, this theory recognizes the principle of mutuality, joint concern and the extension to workers of the corporate responsibilities.

To some extent, these approaches represent stages of development of the bargaining process itself. Early negotiations were a matter of simple contracting for the terms of sale of labor. Developments of the latter period led to the emergence of the Government theory.

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