Collective Bargaining

Collective Bargaining

Concept: The process is “collective "because issues

relating to terms and conditions of employment are solved by representative of employees and employers in groups than as individual

“ Bargaining” refers to evolving an agreement using methods like negotiations,discussions,exchange of facts &ideas

Process of collective bargaining is bipartite in nature.

Ex: The negotiations are between the employers and the employees, without third party’s intervention.

“Collective Bargaining” a concept first identified by Sidney and Beatrice web in Britain.

Collective bargaining has been defined in the Encyclopedia of Social Sciences, as “a

process of discussion and negotiation between two parties, one or both of whom is a

group of persons acting in concert

The resulting bargain is an understanding as to the terms and conditions under which a continuing service is to be performed.…More

specifically, collective bargaining is a procedure by which employers and a group of

employees agree upon the conditions of work.”

Purpose of collective Bargaining: It provides a means of determining the

wages and conditions of work applying to the group of workers covered by the ensuing agreement through free and voluntary negotiations between the two independent parties concerned.

It also enables employers and workers to define by agreement the rules governing their relationship.

Features of Collective Bargaining: It is a group process. Both employers and

representing employees sit together to negotiate terms of employment

It is a process in the sense that it consists of a number of steps from charter of demands and the last stage is the reaching of an agreement

There is considerable scope for discussion, compromise rather then confrontation

It is a bipartite process

In 1977 development of CB in Indian industries has been quite phenomenal

The government was unwilling to allow industry and labor to adopt this democratic process determine either their relationships

The inherent weakness of conciliation and compulsory arbitration brought about a change in the attitude.

Historical Background

The Piecemeal approach

The Wholistic approach

Basket approach or Package Bargaining or Lump approach

The “take it” or “Leave it "approach

Bargaining approaches

The basic objective of all negotiations is to reach a mutually satisfying agreement.

The questions linked to this are: what determines the likelihood of reaching

such an agreement? what determines the speed at which an

agreement will be reached? Under what circumstances will one party

do substantially better than the other

Strategies of bargaining

Under what circumstances will the parties be able to find and adopt integrative solutions that benefit both?

According to the behavioral scientist, a negotiator may employ any of the following 4 strategies in his task of securing a mutually satisfying contract.

1.Break of negotiations 2. Make a new proposal that is more worthless to the

proposing team than the prior one 3. The speaker indicates that he will not or cannot

move further than his current offer 4. Seek coordinated movement towards a mutually

satisfactory outcome, which may take the form of a compromise

Capitalizing on the general economic and political situations

Timing of negotiations

A planned course of progressive action

Strategy of selectivity

Advance strike vote

There are two stages in CB:

A) Negotiation stage

B) The stage of contract administration

C) Follow up action

PROCESS OF NEGOTIATION DURING BARGAINING

Negotiation stage: At this stage, certain proposals are put

forward which explore the possibilities of their acceptance and pave the way to mutually agreed terms after careful deliberation and consideration

This stage itself involves 3 steps:

1. Preparation for negotiation: 2. Negotiation technique or procedure

The Indian Scenario: In India, trade unions gained prominence much later – only after 1900.

In 1918 Gandhi - as the leader of the Ahmadabad textile workers – advocated the resolution of conflict through CB agreements.

The Government of that time took steps like setting up of machinery for negotiations, conciliation and arbitration.

CB IN INDIA

The trade union movement and also CB agreements became popular after Indian independence.

Moving from agreements at the plant level, such agreements spread to industries such as chemicals, petroleum, tea, coal, oil and aluminum, port & Dock, Banking and Insurance

Assessment of Collective Bargaining in India: Other than in Ahmadabad and Mumbai, so far, collective agreements have not made much headway in India.

Reasons:

Lack of statutory recognition of unions by the country as a whole.

Lack of provisions requiring employers and workers to bargain in ‘good faith’.

The historical problem of ‘lack of trust’ between the parties Have all stood in the way of collective agreements contributing towards industrial harmony.

Proper conditions have to be created for the success of CB for promoting industrial peace. Encouragement to strong and powerful trade unions.

Satisfactory arrangements for union recognition by statute.

Creation of conditions in which collective agreements have a chance to succeed

Causes of limited success of CB in India: Problems with unions:

CB mainly depends on the strength of unions. Weak trade unions cannot initiate strong arguments during negotiations. Not many strong unions in India. Indian unions are bogged down by the problems of: multiplicity, inter and intra-union rivalry, weak financial position and non-recognition. So, unanimous decision is unlikely to be presented at the negotiating table.

Problems from Government: The Government has not been making any strong efforts for the development of CB. Imposition of many restrictions regarding strikes and lockouts has removed the `edge` of the CB process. Political interference: Interference of political leaders in all aspects of union matters has increased over the years. Almost all unions are associating themselves with some political party or the other.

Legal problems:

Now that adjudication is easily accessible, the CB process is losing its importance.

Management attitude: In India, managements have a negative attitude towards unions.

They do not appreciate their workers joining unions.

Suggestions for better functioning of CB:

Pre-requisites of successful bargaining:

Employer’s recognition of the trade union.

Employers’ and employees’ attitude calls for a change:

The workers and the employers should be quite clear that they are not looking for third party intervention in the form of litigation and adjudication.

They want to sort out their differences in a peaceful way.

Top priority to plant level bargaining:o The representatives of the employees must have a firm resolution to have an agreed solution to their individual matters.

In India, Dearness allowance (D.A.) is part of a person's salary. D.A. is calculated as a percent of the basic salary.

This amount is then added to the basic salary along with house rent allowance to get the total salary.

Rates vary as per rural/urban areas etc.

Dearness allowance

Pensioners and the family pensioners are granted D.A. against the price rise.

During the reemployment under Central or State Government, Government undertaking, Autonomous body or Local Body, they are not eligible to draw D.A., in which case D.A. is allowed in addition to fixed pay or time scale.

In other cases of reemployment D.A. is allowed subject to the limit of emoluments last drawn.

D.A. is not allowed while the pensioner stays abroad and also in case of employees absorbed in public undertaking or bodies.

If the pensioner stayed abroad without reemployment, he shall be eligible to draw D.A. on pension.

Prior to 1972, there was no element of D.A. on pensions.

From 01.04.1972 there was a flat rate of D.A. to all the pensioners

Latest DA Rate for Central Government Employees:

With effect from 1.1.2006, Dearness allowance is granted to compensate price increase above to which the revised pay scales relate.

This will be sanctioned twice a year, payable from 1st January and 1st July.

The following table shows the rates of Dearness Allowance (as on August 2010)

Date From Which Payable Rate (in Percentage) 1-1-2007 6

1-7-2007 9 1-1-2008 12 1-7-2008 16 1-1-2009 22 1-7-2009 27 1-1-2010 35 1-7-2010 45 (Expected) Source:Latest

DA Rate imyideas.com