Collective Bargaining: Meaning Objectives and Importance

Meaning:

Collective bargaining is a process of negotiating between management and workers represented by their representatives for determining mutually agreed terms and conditions of work which protect the interest of both workers and the management. According to Dale Yoder’, “Collective bargaining is essentially a process in which employees act as a group in seeking to shape conditions and relation­ships in their employment”.

Michael J. Jucious has defined collective bargaining as “a process by which employers, on the one hand, and representatives of employees, on the other, attempt to arrive at agreements covering the conditions under which employees will contribute and be compensated for their services”

Thus, collective bargaining can simplify be defined as an agreement collectively arrived at by the representatives of the employees and the employers. By collective bargaining we mean the ‘good faith bargaining’. It means that proposals are matched with counter proposals and that both parties make every reasonable effort to arrive at an agreement’ It does not mean either party is compelled to agree to a proposal. Nor does it require that either party make any specific concessions.

Why is it called collective bargaining? It is called “collective” because both the employer and the employee act collectively and not individually in arriving at an agreement. It is known as ‘bargaining’ because the process of reaching an agreement involves proposals and counter proposals, offers and counter offers.

Objectives:

The basic objective of collective bargaining is to arrive at an agreement between the management and the employees determining mutually beneficial terms and conditions of employment.

This major objective of collective bargaining can be divided into the following sub-objectives:

1. To foster and maintain cordial and harmonious relations between the employer/management and the employees.

2. To protect the interests of both the employer and the employees. government interventions at bay.

4. To promote industrial democracy.

3. To keep the outside, i.e., the

Importance:

The need for and importance of collective bargaining is felt due to the advantages it offers to an organisation.

The chief ones are as follows:

1. Collective bargaining develops better understanding between the employer and the employ­ees:

It provides a platform to the management and the employees to be at par on negotiation table. As such, while the management gains a better and deep insight into the problems and the aspirations of die employees, on the one hand, die employees do also become better informed about the organisational problems and limitations, on the other. This, in turn, develops better understanding between the two parties.

2. It promotes industrial democracy:

Both the employer and the employees who best know their problems, participate in the negotiation process. Such participation breeds the democratic process in the organisation.

3. It benefits the both-employer and employees:

The negotiation arrived at is acceptable to both parties—the employer and the employees.

4. It is adjustable to the changing conditions:

A dynamic environment leads to changes in employment conditions. This requires changes in organisational processes to match with the changed conditions. Among other alternatives available, collective bargaining is found as a better approach to bring changes more amicably.

5. It facilitates the speedy implementation of decisions arrived at collective negotiation:

The direct participation of both parties—the employer and the employees—in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.

FUNCTIONS OF COLLECTIVE BARGAINING

Collective bargaining is a technique of social change, some-times performing its function smoothly and at other times threatening to blow up. The performance of its function can be viewed under the following three headings.

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

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.

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.

TYPES OF COLLECTIVE BARGAINING

Distributivebargaining: 
It involves haggling over the distribution of surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In distributive bargaining, one party’s gain is another party’s loss. This is most commonly explained in terms of a pie. Disputants can work together to make the pie bigger, so there is enough for both of them to have as much as they want, or they can focus on cutting the pie up, trying to get as much as they can for themselves. In general, distributive bargaining tends to be more competitive. This type of bargaining is also known as conjunctivebargaining. 

Integrativebargaining: 
This involves negotiation of an issue on which both the parties may gain, or at least neither party loses. For example, representatives of employer and employee sides may bargain over the better training programme or a better job evaluation method. Here, both the parties are trying to make more of something. In general, it tends to be more cooperative than distributive bargaining. This type of bargaining is also known as cooperativebargaining. 
Attitudinalrestructuring: 
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or hostility between labor and management. When there is a backlog of bitterness between both the parties, attitudinal restructuring is required to maintain smooth and harmonious industrial relations. It develops a bargaining environment and creates trust and cooperation among the parties. 
Intra-organizationalbargaining: 
It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve consensus with the workers and management. Even within the union, there may be differences between groups. For example, skilled workers may feel that they are neglected or women workers may feel that their interests are not looked after properly. Within the management also, there may be differences. Trade unions maneuver to achieve consensus among the conflicting groups. 

THEORIES OF COLLECTIVE BARGAINING

There are three important concepts on collective bargaining which have been discussed as follows:

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 cannot 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.

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.

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 cannot 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.